Code ‘not about propping up media companies’, says ACCC’s rod Sims

ACCC chair Rod Sims has moved to dispel myths and misinformation about the upcoming mandatory media bargaining code.

Australian Competition and Consumer Commission (ACCC) chairman Rod Sims Picture: AAP

Australian Competition & Consumer Commission chairman Rod Sims has moved to dispel myths and misinformation about the upcoming mandatory media bargaining code, responding to claims from Atlassian co-CEO Mike Cannon-Brookes and others that the legislation was merely an attempt by the media industry to stymie innovation.

Speaking to The Australia Institute’s chief economist, Richard Denniss, and its deputy director, Ebony Bennett, on Thursday, Mr Sims said the upcoming world-first code, which would force Google and Facebook to negotiate with media publications and pay them for their journalism, was not about propping up media companies.

Mr Cannon-Brookes, a software billionaire, described the proposed legislation as “legalised theft”, while others in the tech industry compared news publications’ current plight with Netflix taking revenue that previously would go to pay-TV companies.

Mr Sims hit back at the analogy, pointing out that Google and Facebook do not produce news, and that the code therefore was “not about subsidy, and is just about addressing a market power imbalance — one that really matters to the future of our society.”

“The media industry may be an old industry, but Google and Facebook are not replacing it. That’s the misunderstanding,” Mr Sims said.

“I think people like Mike Cannon-Brookes say ‘where’s the journalism going to come from? Where’s the media going to come from?’ That’s what we’re trying to help here. Yes, Google, Facebook, have come up with a fantastic, really clever business model; you get free services, they get your data, and advertise to you and away you go. But they’re not providing media. They’re not providing news, and they don’t employ journalists.

“They’re not replacing the news media businesses, and we’ve just got to make sure that in this new world, we don’t lose something that’s really important to us. And that is critical media coverage. That helps our democracy function.

“I am the first to accept that you need a whole range of media out there to make that happen. I for one in my job, it’s my job to read a whole range of media. So yes, I do read The Australian each day, I read the Melbourne Age or The Financial Review, and I read The Guardian … I’m getting a diverse range of views. And yes, it’s fascinating how I can read the same story in The Age and The Australian, and they’ve got a completely different perspective on them. But to me, that’s healthy.”

Mr Sims also confirmed the code would change from its current draft form, following consultation from the tech giants, media publications, politicians and others. Google, in an open letter this week, called for a “workable code”, suggesting what it described “reasonable changes” around data security and the negotiation process.

Mr Sims left the door open for changes including that the government add the ABC and SBS, which are currently excluded, to the code.

The government has said it would pass the legislation sometime this year.

“We’re sifting our way through that, and there will be changes, but the core of the code can’t change,” Mr Sims said. “That is, you need an arbitration mechanism, you need a non-discrimination clause. They’re the bits of glue that holds the code together that make it workable. The core elements of arbitration and non-discrimination won’t change, the way a range of things are described will, and whether that’s a watering down will depend on your perspective. There will be changes some like and some don’t.

“But that core element that addresses the market imbalance won’t change. We will do our best to get something we think is sensible to the government by early October, and then we’ll see where it goes.”