Who gets to decide which media companies are deserving: Facebook or the ACMA?

With SBS and The Conversation denied by Facebook, we're seeing the realities of the News Media Bargaining Code playing out. The little guys have been left in the cold

Welcome to Unmade, written on a beautiful Wednesday afternoon at Sisters Beach, Tasmania.

Did I check the Melbourne earthquake wasn’t sending a tsunami in my direction? Well, I did gaze anxiously at the horizon from the deck for a minute or two, then forgot about it and went back down to my (not even ten metres above sea level) office.

Happy Restless Legs Syndrome Awareness Day.

Today’s writing soundtrack: Original Pirate Material from The Streets.

Our numbers have crept up again, to 1,267 of us. Nice to see some creative agency folk sign up yesterday on the strength of my piece about storytelling in ads. Thanks for joining us, and please do encourage colleagues to do the same.

The gravy train derails

Remember the shenanigans around the News Media Bargaining Code at the start of the year?

There were those few mad few days in February when Australia woke up to the removal of all of its news sources from Facebook, before a cobbled compromise saw the government negotiate a deal on behalf of its favourite media players.

The key question was whether the smaller outlets would also be taken care of. We’re starting to find out.

To recap, the code came out of the Australian Competition and Consumer Commission’s Digital Platforms Inquiry which kicked off at the end of 2017.

The ACCC recommended that digital behemoths - in reality Google and Facebook - should pay for the privilege of linking to news providers. And it recommended a negotiation framework to reach a price.

The threat of breaking search as it works across the web was what led to Facebook’s strong arm move to temporarily cut Australian news out of the News Feed. Rather that, than acquiesce and create a global precedent, Facebook seemed to conclude at the time.

Even as the code was being turned into legislation, Google and Facebook were looking for routes out of the mire. Once it became law, if they could avoid being designated under the code, they could avoid setting that precedent.

So they threw money at the problem without admitting what they were doing.

Google went first, doing deals with publishers to feature their content on the non existent Google Showcase product. This way they could say they were paying for content, not paying for the right to link.

Facebook left it later, instituting the News Feed ban before pulling back as the move began to get global headlines.

Behind the scenes Facebook founder Mark Zuckerberg negotiated with Treasurer Josh Frydenberg. There would be extra steps in the mandatory negotiations. And, more importantly, if the big two convinced the government they had given media owners sufficient money, then they could avoid being designated under the code.

A grubby shakedown perhaps, but it was nonetheless fantastic for the big end of town, with the major media players agreeing payouts of tens of millions of dollars from Google and Facebook. We’ll see that flow through for them in this financial year.

But the big question remained - what would happen to the smaller players? If they didn’t happen to have a 6pm news bulletin viewed by millions of people, would the government come into bat for them too?

Yesterday, we got closer to finding out. Facebook has decided it’s done enough for the big boys and no longer needs to negotiate with the likes of SBS and The Conversation.

The SMH reported that Facebook told them: “We had to draw a line somewhere.” And the SMH reminded readers that the likes of Broadsheet Media, The Urban List and Concrete Playground have previously complained of having their conversations shut down.

One of those organisations mentioned above is particularly interesting.

You see, Broadsheet Media is among the first companies to have been been accepted onto the Australian Communications & Media Authority’s Register of Eligible News Businesses which only recently went live.

This register is the list of companies that Facebook and Google would have been forced to negotiate with, if they were designated under the legislation.

To be eligible, news companies have to prove their revenue exceeded $150,000 in their annual accounts, and that they’re governed by professional standards such as the Australian Press Council.

The list of the 22 registered news businesses is a pretty random one so far. None of the big players have yet bothered to register - they don’t need to; they’ve already squeezed money out of Google and Facebook anyway. It’s organisations like theFassifern Guardian & Tribune, The Australian Jewish News and Sydney Star Observer on the list.

And, as I say, one of those organisations among the 22 is Broadsheet Media, who say they have already been turned down by Facebook.

Which is where the whole thing gets messy. Without Google and Facebook being designated and forced to negotiate under the code, what happens to the media outlets who have jumped through all the hoops to end up on ACMA’s register, but Facebook has decided not to talk to?

Does Facebook, and down the track Google, get to please themselves which media they want to do a deal with?

They’re certainly powerful enough to do that, without a code to balance the playing field. Which was the point of the legislation in the first place.

So perhaps it will come down to the appetite of the government to have another fight with Facebook and Google. It can still choose to designate them under the code. But now the major media stakeholders are already happy, there’s far less to motivate it to do so.

There’s also the question of an election coming up at some point. Shadow communications minister Michelle Rowland may end up being the one to make the call.

Helpfully, her office issued me with the following comment on her behalf last night: “The Government accepted Labor’s argument that the ABC and SBS should be part of the deals under News Media Bargaining Code to ensure Australian taxpayers get a return on their investment in quality news and content. What’s the Treasurer going to do about Facebook’s apparent refusal to engage with SBS? Why doesn’t the Treasurer pick up the phone and ask Mark Zuckerberg why Facebook won’t do a deal with one of Australia’s most trusted news platforms, particularly for ethnically diverse communities?”

SBS’s case will be even stronger once it gets its act together and gets onto the register. It was foolish not to have done so already.

Meanwhile, last night Facebook also supplied me with a statement attributed to its head of news partnerships, the affable Andrew Hunter: ““Commercial deals are just one of the ways that Facebook provides support to publishers, and we’ve been having ongoing discussions with publishers about the types of news content that can best deliver value for publishers and for Facebook. Our commercial deals are based on a range of factors including, the type of content developed, and reach and engagement. We’re continuing to engage with publishers to support them with how they can benefit from free referral traffic, monetisation products, and other initiatives and investments. We will continue to make investments in programs such as the Facebook Australian News Fund and offer support to help newsrooms innovate their content for online audiences.”

In other words, Facebook will choose which news publishers it works with. In a sane market economy, that’s capitalism at its finest. But it’s not what the government claimed to have in mind when it set the ACCC on its course.

So far, the outcome has benefitted the big players, and not the small ones. So much for levelling the playing field.

The compromise has come back to haunt the government as it was always going to. Now it has to decide whether the ACMA register actually means anything. If it does, then the bargaining code could yet come back into play.

Leave a comment

As ever, I’d love to know what you think. I’m particularly keen to hear from publishers who have been trying to talk to Facebook and Google. Do drop me a line to letters@unmade.media, or via the comment button above.

Have a great day.

Toodlepip…

Tim Burrowes

Proprietor - Unmade