Something remarkable is happening with local news in Australia, and the U.S. Congress should take note.
Three months after Australia passed a groundbreaking policy, forcing Google and Facebook to compensate news outlets for content, it appears to be a resounding success.
This should result in agreements helping sustain “effectively 100%” of core news outlets in Australia, Rod Sims, Australian Competition & Consumer Commission chair, told me last week.
“We will absolutely get there, and we’re making great progress with the large, medium and small players,” Sims said.
This is not forcing charity. It’s “all about a bargaining imbalance between Google and Facebook on one hand and media on the other,” Sims said. “And it was clear that the media companies could not have a commercial negotiation with the platforms, it was just take it or leave it, one sided.”
Regulators in Europe, Asia and the United States are also starting to address platforms’ unfair competition and dominance. Some are particularly concerned about the distorted marketplace suffocating news organizations necessary to sustain their democracies.
There’s a U.S. proposal similar to Australia’s, the Journalism Competition and Preservation Act, with bipartisan support in Congress. It calls for a temporary antitrust exemption allowing news organizations to collectively bargain with platforms, giving publishers and broadcasters more heft.
But so far, the JCPA lacks the teeth making Australia’s policy work especially well.
Crucially, Australia requires platforms and media companies to enter arbitration if they can’t reach an agreement.
“The real power is the ability to go to arbitration, the threat of arbitration — you don’t actually have to do it,” Sims said.
Arbitration hasn’t yet been required to advance negotiations. Three of the four largest media companies now have deals with Facebook and Google, and the fourth is in negotiations, Sims said. Among mid-size media companies, “probably half of those have deals and half don’t, but there are good signs that they will.”
Many small outlets “got in quite early and got deals, so it was always wrong in fact when people said the small players are going to get left out,” he said.
A major outstanding entity is Country Press Australia, representing about 160 small publications. It’s now negotiating a content-compensation agreement.
“There’s no question that the government’s action to legislate the code has ramped this up,” Bruce Ellen, association president, told me. “There’s no way we’d be speaking with them every week about negotiations if this wasn’t hanging over their head.”
Ellen, whose family publishes five papers and is adding eight more, said the association is “getting very good engagement from Google and Facebook at the moment.”
Other hammers loom over the platforms. They’ve avoided them so far by negotiating and because of concessions won from Australian policymakers.
Tech giants can now avoid being designated as dominant platforms subject to the bargaining code, which includes requirements such as providing advance notice of major algorithm changes, as long as negotiations progress.
That pulled a few teeth from the policy. But it also adds more incentive for platforms to make deals, so they can avoid more than just arbitration.
There were partisan objections to Australia’s policy because it was sought by Rupert Murdoch’s News Corp. It did help News Corp secure a three-year contract making Facebook pay for news content in Australia, and a global agreement with Google to pay for content. The Google deal was done right before the policy was enacted, and the Facebook deal shortly afterward.
But the policy helps the whole industry, according to Sims and Ellen. Should firefighters not save an apartment building because some dislike a penthouse tenant?
The policy could be a lifesaver for small publishers.
“We believe it will certainly help in sustaining some of our independent members,” Ellen said.
The association is targeting a level of compensation Sims has publicly floated, that Google and Facebook should together be looking at paying between 25% and 30% of journalism wages. So an outlet with four journalists might receive the equivalent of one journalist’s salary. That’s a higher percentage than larger outlets may receive because they have economies of scale, Ellen added.
“It’s not a panacea for local newspapers, but it’s an assistance,” Ellen said. “We’re big boys, we need to stand on our own feet and run our own business model.”
Indeed. To survive, news outlets must get paid for their work, especially by wildly profitable tech giants using the content.
“At the end of the day the platforms do use our content, they make a fortune out of it, so they do deserve to recompense us for our content,” Ellen said, when asked for advice. “Don’t let them threaten.”
Platforms “don’t want to lose news off their platforms because they know it’s the only trustworthy material on there, it’s provided by our news sources,” Ellen continued.
“They need us because they are being absolutely slammed across the world because of how they operate businesses, they need us to give them some integrity in the worldwide market,” he said, “so stick to your guns.”
Pay heed, press supporters and platform skeptics in Congress.
And invite these Aussies to testify at the next JCPA hearing.