Content bill for Facebook, Google might top $1bn, says News Corp Australasia boss Michael Miller

News Corp Australasia boss Michael Miller backs Peter Costello’s demand that Google and Facebook pay for news content.

Mr Miller said it was “important to remember” the new agreement was about more than a revenue sharing agreement. Picture: Mark Stewart

News Corp Australasia boss Michael Miller has welcomed Nine Entertainment Chairman Peter Costello’s demand that Google and Facebook pay $600m to media companies for news content – but has said real estimates could be as high as $1bn.

Following comments from the Nine chairman on Thursday, Mr Miller also said the new code of conduct needed to be about more than just money, needing to address crucial issues such as algorithms and data sharing.

Mr Costello told Nine newspapers that by his estimates, Facebook and Google should pay Australian media companies 10 per cent of the $6bn a year the tech platforms make in online ad revenue, based on what the platforms gain from news content and searches.

Picture: AFP

“We think that Google and Facebook are driving advertising revenue of about $6bn in Australia, and roughly 10 per cent of that is as a result of news content,” Mr Costello said.

“So, if you apply those figures, Google and Facebook are taking about $600m of advertising revenue out … which otherwise could have, or should have, been going to media.”

Last month, Treasurer Josh Frydenberg instructed the ACCC to force tech companies to draw up a compulsory code of conduct that, in a world first, would govern revenue sharing with media companies as well as algorithms, data sharing, and fair use of valuable content.

It came after News Corp Australasia Executive Chairman Michael Miller publicly stated his lack of confidence in the tech companies’ ability to negotiate a voluntary agreement in good faith.

Mr Miller said on Thursday he is “aligned with Mr Costello’s strong call that tech companies must pay for the news content they take and profit from”.

However, Mr Miller said Mr Costello’s calls for a $600m payment might have underestimated how much the tech companies should pay.

Lack of confidence

“While Mr Costello estimates that the platforms should pay Australian media companies around $600m per annum there are different approaches to negotiating with them.

Peter Costello. Picture: AAP

“Our modelling suggests the figure is much higher than $600m and former senator Nick Xenophon, whose advocacy sparked the ACCC inquiry into the platforms, has nominated $1bn,” Mr Miller said.

Mr Miller said it was “important to remember” the new agreement was about more than a revenue sharing agreement.

“The platforms’ unfair and monopolistic behaviours extend beyond simple loss of revenue and the mandatory code the ACCC will put in place will include, among other things, fair arrangements for access to data, understanding of algorithms, direct access, customers and fair treatment of news organisations’ unique and valuable content.

“The purpose of the mandatory code is to address the large imbalance in bargaining power between individual news content publishers and the digital platforms, to facilitate a fair negotiation between them about the news content that the platforms take. Getting the code itself right is the first order of business.”

News Corp has put forward its own submissions to the ACCC in drawing up the new code as well as to a new inquiry into, what Mr Miller described as “the monopolistic and opaque ad tech industry which again is dominated by the tech giants”.

The ACCC is hoping to have a draft code of conduct ready to release for public consultation by July.