Executive Summary:
Submission by Free TV Australia
Review of the News Media and Digital Platforms Mandatory Bargaining Code
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Free TV welcomes this review of the News Media Bargaining Code and strongly supports the maintenance of the existing framework with its key pillars of:
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A designation power for the Treasurer
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A framework for genuine commercial negotiation to achieve a fair value for the news content made available by the digital platform services of Google and Meta
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Final Offer Arbitration (FOA) to operate as a deadlock breaking mechanism in the event that the two parties cannot come to a commercial agreement.
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While no designation has yet occurred, the evidence from 12 months of operation of the Code demonstrates that the incentives from these key pillars have broadly been successful in driving commercial negotiations. The ACCC has indicated that the commercial arrangements have led to the payment of over $200 million by the digital platforms to news media companies.
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The Code has addressed the fundamental bargaining power imbalance that led to the previous refusal of digital platforms to pay a fair price for news content despite the value it creates on their services. It is critical that the legislation be maintained, as without the bargaining Code framework the commercial arrangements that have been struck to-date would not have been possible.
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The ACCCâs original findings on the market power held by Google and Meta have been confirmed in recent ACCC analysis (February 2022) that highlighted that these platforms continue to hold a dominant position in the supply of search and social services respectively. As such, the policy analysis that underpinned the creation of the media bargaining Code remains valid.
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This bargaining code framework, including FOA, has become the model for other countries looking to address the fundamental competitive imbalance between digital platforms and news media businesses, for example the recently introduced C-18 Bill in Canada and the UK Governmentâs response to the consultation on a new pro-competition regime for digital markets.
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However, Free TV submits that improvements can be made to the framework to ensure that all eligible news media businesses are fairly remunerated for their news media content, including as existing commercial arrangements come up for renewal. Critically, this must include video news content on social video platforms such as YouTube.
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Accordingly, to maintain incentives on digital platforms to seek commercial arrangements, the Government should:
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issue a statement of expectations on digital platforms that establishes an intention to designate (following the required process in the legislation) Facebook, Google Search and YouTube (and their subservices) if commercial arrangements are not entered and maintained with all relevant news media companies
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Remove the âsignificant contributionâ test in the designation criteria to reinforce that all eligible news media businesses can seek agreements under the Code if the Treasurer determines to designate a digital platform service
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Commit to biennial reviews of the operation of the Code to ensure that it continues to foster genuine commercial relationships and to maintain an effective check and balance on the market power of the digital platforms.
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Free TV has also highlighted areas where future reviews should focus, including in relation to the balance of the factors an arbitration panel must consider, the definitions of core and covered news content and the potential for streamlining the ACMA registration process.