Making tech giants pay for news was a success the first time around. It can be done again |
With the release this week of the government’s News Bargaining Incentive, it’s worth reconsidering the origins and achievements of its predecessor, the News Media Bargaining Code.
Both have the same aim: to gain payment from the search and social media companies that profit from the use of media content, but do not effectively pay for this necessary input to their business.
So what did we learn from the first laws, and how can that be applied to this new attempt to make tech companies pay for news?
A case of market failure
The bargaining code had its origins in the Australian Competition and Consumer Commission’s (ACCC’s) Digital Platform Inquiry from December 2017 to June 2019. The inquiry was tasked with examining competition, consumer, advertising and news issues.
There were 23 recommendations, one of which was for a news media bargaining code.
The logic for the code was that search and social media companies needed news, but they could choose any media outlet. But the media had no choice but to align with the major platforms.
There was thus a market power imbalance, a classic market failure. While not all market failures need a response, this one did, given the critical role that news media plays in our democracy.
The logic for the design of the code came from access regimes which the ACCC regulated in other areas. For example, many companies export their produce, but only having one port from which to do so........