Media bargaining laws must apply to Facebook


Former competition boss Rod Sims is urging the incoming government to ‘designate’ Facebook under the federal media bargaining code, a move that could expose the social media giant to substantial fines if it fails to strike deals with Australian news publishers, including SBS and The Conversation.

But Sims conceded the threat of making the new laws apply to Google and Facebook allowed commercial deals to be struck faster with media companies than the original plan – arbitration – may have. The comments were made following the release of a report on the news media bargaining code, which Sims intends to give to international regulators considering similar legislation.

Former ACCC chairman Rod Sims wants Facebook designated.Credit:Alex Ellinghausen

The media bargaining code was legislated last year in an effort to force Google and Facebook to pay eligible large and small news publishers to display articles in the search engine and “newsfeed”.

But following outcry from the tech giants’ most senior executives and a shutdown of news from Facebook’s newsfeed, the government introduced a loophole – the new laws don’t actually apply to either Google or Meta because they are not “designated”. Being designated under the code means Google or Meta would be legally required to enter negotiations with eligible publishers or risk fines of up to 10 per cent of Australian revenue. Sims conceded this was not initially the plan.

“We’re there faster than we would have got through designation than arbitration. People would still be talking now…whereas within six months, we had a vast number of deals done. The objective was having deals done with fairly equal bargaining power,” he said.

“We thought, when this all started, that the threat would be arbitration. It became apparent through discussions with the platforms that what they were really concerned about was being designated. So, we thought okay, if that’s the better way to even up bargaining power, that’s fine by us.”

However, he said that Facebook had not done enough to avoid designation. Facebook has signed deals with a range of publishers including Nine Entertainment Co (owner of this masthead), Seven West Media and News Corp Australia, publisher of The Australian and The Herald Sun. But it did not strike deals other news organisations such as SBS and The Conversation. Sims previously expressed concern about the absence of these two deals, but never explicitly said the platform should be designated.

“My own view is that Facebook need to do a deal with SBS and The Conversation otherwise, they should be designated. That’s an issue for Treasury to advise the treasurer once the review is done. But I think it’s not in the spirit of what is going on here for organisations like this not to get a deal,” he said.

Sims’ comments were made following a release of a report which addressed the main criticisms of the code, including the absence of designation and lack of transparency on the terms of the commercial deals. Sims refutes most of the criticisms on grounds that these things were not objectives of create the code.

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