Facebook, Google to do bulk deals with mini-publishers: Sims

The competition regulator expects both Google and Facebook to do more deals under the media code with smaller publishers.

ACCC Chair Rod Sims. Picture: Zak Simmonds

The competition regulator expects both Google and Facebook to negotiate bulk content deals with mini-publishers, or face the prospect of intrusive regulation under the proposed media bargaining code.

In an appearance before the House economics committee on Wednesday, competition tsar Rod Sims said there was a “much stronger chance that designation will occur” under the code unless deals were done with all eligible parties.

Ultimately, however, it was a decision for the Treasurer.

“I hadn’t envisaged a situation where not everybody gets a deal but there’s no designation,” Mr Sims, chairman of the Australian Competition and Consumer Commission, said.

“But my expectation, informed by what I understand and hear, is that both Google and Facebook will do an across-the-board deal.

“It’s not in their interests to negotiate with about 80 members of Country Press Australia; they’d rather deal with Country Press Australia members and other smaller players across-the-board.

“It’s a question for Facebook and Google but I don’t see how there’s any way those organisations can be left out.”

Mr Sims was asked by Labor MP Andrew Leigh if it concerned him that the deals negotiated by Google so far were primarily with the large media groups.

News Corporation, Mr Leigh said, had got $50m, Nine Entertainment $30m, Seven Network $30m, the ABC $25m, but only $5m had gone to other publishers.

The ACCC chief said it should not be a concern that 96 per cent of the money raised so far was going to the big players.

First, there were more deals to be done, notably the blanket offers from both platforms to the smaller media company.

“And the second point I’d make is: ‘Where are the journalists?’ ” Mr Sims said.

“The bulk of them work for the ABC, News, Nine, and then possibly in descending order Seven and Ten, the radio companies, the Guardian and so on.”

Mr Sims said he found Facebook’s removal of Australian news content from its platform last week as “surprising and unusual”.

The day before, he believed “all was well”.

But now that Facebook had reversed its decision, the ACCC boss took the opportunity to laud the new code’s “100 per cent success”, with content deals negotiated before the code became law.

Pressed on whether the same outcome could have been achieved without Facebook going dark, he said it was unlikely.

“No deals were going to be done before the code was extremely close to reality,” he said.

On the level of concentration in the Australian media industry, Mr Sims said it was an issue he had watched for “a long time”.

“Yes, the media is too concentrated in the sense that we have two newspaper groups in Nine and News,” he said.

“But the advent of digital has changed things.”

The ABC’s previous focus on radio and television had expanded with the introduction of an online news feed, the Guardian had arrived as a “serious player”, and the industry boasted a lot of “digital natives”.

Mr Sims said he also read the Financial Times, and his wife read the New York Times.

“So I think we are more diversified than we were before, but I’m not saying it’s not a problem,” he said.

As to the market power of the digital platforms, the ACCC chief said they had started out with “fantastic innovation” but had more recently consolidated that power through a string of acquisitions.

The ACCC chief said the Big Five tech companies – Google, Amazon, Facebook, Microsoft and Apple – had made about 400 acquisitions in the last five years, mostly offshore and none of which had been blocked by regulators.

“The law does need to be looked at; it’s a big problem,” he said.

“I don’t think it will be too long before there’s legislative change in one or two countries and that will promote change all around the world.”