Big Tech to pay annual charge to publishers

Tech giants Google and Facebook will have to pay an agreed annual lump sum to publishers for their news content as part of changes to the mandatory media bargaining code.

Communications Minister Paul Fletcher. Picture: Gary Ramage

Tech giants Google and Facebook will have to pay an agreed annual lump sum to publishers for their news content, rather than per click or snippet, as part of a handful of minor changes to the government’s mandatory media bargaining code.

The government will also simplify the requirements for Google and Facebook to give notice of algorithm changes, which had been a key sticking point of the tech giants over the code.

As Google continues crunch talks with a raft of publishers, Treasurer Josh Frydenberg and Communications Minister Paul Fletcher said the government would this week introduce five “technical” amendments to the landmark code.

The amendments will also clarify the information which the competition regulator, ACCC, can provide in the arbitration process, in a bid to give parties greater confidence.

In a joint statement on Tuesday evening, Mr Frydenberg and Mr Fletcher said the code changes would “enhance the way it operates and strengthen its ability to foster more sustainable public interest journalism in Australia”.

It will also tweak the anti-avoidance provisions so they take effect from the commencement of the code and ensure the government’s policy intent of not interfering with existing contractual rights under the code is achieved.

Peter Lewis, director of the Australia Institute’s Centre for Responsible Technology, said “on face value, the amendments keep the integrity of the media code intact”.

“What is critical is that the code provides a systemic response to the monopoly power of Google and Facebook by recognising the value of public interest news journalism,” he said.

The code, which has been designed to ensure media companies are paid for their original content carried on search engines and social media platforms, will be reviewed by Treasury within one year of its commencement.

As the government pushes ahead to pass the code into law by the end of the month, Google is hoping to lure other local publishers to its Showcase product after reaching a deal with the Kerry Stokes-controlled Seven West Media on Monday, the first major media group to sign a content deal.

A Google spokesman would only say they are in talks with “publishers large and small”. Talks are understood to be underway with The Guardian Australia, News Corp Australia (publisher of The Australian), Nine Entertainment, and public broadcasters, ABC and SBS.

The Guardian’s Australian managing director Dan Stinton said “negotiations are progressing well, but there are still some fundamentally unresolved issues that we need to work through”.

The Australian understands that the issues are around funding, but it is hoped a deal will be secured by the end of the week. Seven has refused to disclose the value of its Showcase deal, which is understood to be significantly more than $30m-a-year as reported by some other media outlets.

Investment bank JPMorgan estimates that Seven could receive between $39.5m to $69.2m from its content deal with Google, based on its analysis of France’s Showcase showdown. It is understood the deal will run over more than five years.

“Reminiscent of Bob Barker’s ‘Showcase Showdown’, both SWM and NEC have been given a chance to spin Google’s Showcase wheel, and SMW is happy with the first spin — signing a contract to get paid for content appearing within the platform (NEC much less-so),” JPMorgan said in a research note.

“This comes at an opportune time with the media bargaining code legislation.”

A Nine spokesman said it continues to have “constructive discussions with the digital platforms”.

An ABC spokesman said discussions were ongoing, while NewsCorp and SBS declined to comment. The Australian understands Google is also talking to pop-culture and news site Junkee, which is owned by outdoor advertising group oOh!media, about boosting Junkee’s investment in public interest journalism.