History

ACCC on the advice of the Government of Australia developed a compulsory/binding code/law to sort out differences in bargaining between News Media businesses and digital technology companies like Google and Facebook for using content.

ACCC shared the draft copy of the new code on 31st of July, 2020 and also put forward a survey with a number of questions on the new proposed code.

Following consultation and review of the survey, recommendations were made to the Government. The bill was introduced in the parliament last December after reviewing the recommendations.

What is this Code?

The Code tries to establish a negotiation network allowing both parties to bargain in good faith and reach conclusive agreements:

1. The proposed new law makes it mandatory for digital platforms to strike a deal with News Media businesses for use of nes content,

2. Groups of media houses can bargain too.

3. The proposed code tries to ensure that both the parties mutually agree to a remuneration amount. In case the discussions fail to arrive at a conclusion, an independent arbiter will review and finalise a fair remuneration amount after consideration of a number of factors.

The new proposed law provides for an arbiter to calculate the remuneration that needs to be paid to the news media business in a fair manner in case the parties are not able to arrive at a mutually agreed amount.

1. The code gives scope to calculate the value that media organisations gain from traffic which have been referred by Google and Facebook. This will ultimately decide on the amount these two tech giants need to pay to access the news content.

2. Benefits News media businesses derive from digital platforms would be considered before deciding on the remuneration amount. Neither the content would be free as well as publicity on Google and Facebook.

The proposed new law makes it mandatory for digital platforms to give a 14 days advance notice algorithm changes which may impact the content of media houses:

1. Google and Facebook will also have to inform news media businesses 14 days prior to making any changes to their algorithms that specify how news is placed on their platforms.

Fallout of the CODE

The new proposed law encourages mutually accepted remuneration amounts. In case the talks fail both the parties will be asked to submit their best offers. Benefits of both the sides, Google and Facebook for using the content and as well as benefits for News media businesses when their content is accessed from these platforms will be taken into account to arrive at a final remuneration amount. However no payments will be made by the news media businesses only the digital platforms need to pay as decided or determined.

News media businesses can team up with other media houses and discuss with one another on the amount of remuneration as well as bargaining as a team.

If the bargaining between the news media houses and digital media platforms stretches for more than three months with no agreement between parties, it may lead to compulsory arbitration if the new business/businesses opt for it.

What does it mean for Google and Facebook?

The code for the time being is concerned with Facebook and Google only and other services are not part of it yet.

Services besides Google and Facebook can be added under the scope of the code if it is seen that digital content is/has been used without providing remuneration or remuneration not at par with standards.

Digital Television services like ABC and SBS also come under the preview of the new code and will look forward to a greater revenue generation due to the code.

Code is Unworkable for Google and Facebook:

Paying news sites for snippets and links:

By designating Search alongside a very broad and imprecise definition of reports, the Code effectively forces Google and Facebook to pay to point out links in an intervention that might essentially break how search engines work.

Links we have to pay for are so broadly defined in the Code:

The code is not detailed in nature. There are no instances of any website or search engine paying to connect people to sites through links.

An unfair and unprecedented arbitration process:

The Code’s one-sided arbitration model, that solely takes into thought publishers’ demands and tries to discount the profit publishers receive from Google or Facebook, in conjunction with baseball arbitration — may lead to publishers asking for huge payments and unreasonable demands.

Giving 14 days algorithm notification:

The Code requires Google and Facebook to administer news publishers special treatment—14 days’ notice of certain algorithms changes and ‘internal practices’. This special treatment might delay important updates for other users and may impact other website owners too.

What does it mean for Australian local businesses if they rely on Google and facebook for lead generation?

Covid-19 has impacted economies all over the world. Each and every country including Australia are taking small steps toward recovery. The proposed new bargaining code may hamper a number of businesses and also how we work digitally.

Small companies rely on leads generated by Google and Facebook and also to be found on the internet. The new code/law can hurt these small businesses immensely if services provided by Google and Facebook are restricted or stopped in totality.

The new code does not create a level playing field and gives more priority and prominence to News Media business at the expense of other website owners and creators.

Majority of Australians prefer to search on the Google platform. A restricted or weakened search by Google or Facebook may have a huge impact on businesses and how they are placed in the search results.

Both Google and Facebook are looking for a work around to the new code and may tie up with local businesses which in turn will create huge opportunities for individual content providers, websites and other forms of content creators.

Why is it still important to keep doing SEO?

More than Ninety percent of Australians use Google to search on a day to day basis.

Google search engines are used by businesses for leads, to be found , for reviews and to connect to a huge ever expanding market. Free services provided by Facebook and Google connect many new customers to businesses all over the world. Google and Facebook being highly user oriented makes them more popular.

This code is highly favourable for news and media houses and provides them an unfair advantage to rank and feature over other sites in a search. Once the code is operational news articles will rank higher than others which might be more relevant to the search.

However there is a different side of a coin too, considerable weakening or non performance of Google search engine and Facebook may create huge opportunities for other search engines like Bing, Yahoo, AOL, Ask.com etc. as businesses will need to continue generating leads and be found on the web.

Hence, it is more important than ever to practise and keep doing SEO.