Digital inquiry: Voluntary nature of code draws a warning

Digital platforms initially will draw up a voluntary code of conduct with news organisations with the aid of the ACCC.

Australian Competition and Consumer Commission chairman Rod Sims in Sydney on Thursday. Picture: AAP

Digital platforms initially will not be forced to hand over revenue or inform media companies of algorithm changes, but instead will draw up a voluntary code of conduct with news organisations with the aid of the ACCC.

As part of its response to the Australian Competition & Consumer Commission’s digital platforms report, the government has tasked the ACCC with developing a voluntary code of conduct between digital giants Facebook and Google and media companies that could see revenue given to the creators of original journalism.

Despite the voluntary nature of the code, the government said it “may” introduce a compulsory code if tech companies did not comply by November 2020.

News Corp Australasia (publisher of The Australian) executive chairman Michael Miller welcomed the action taken by the government, but questioned why the code would be voluntary, given global experience in the platforms ignoring voluntary schemes.

“We are encouraged the government is taking action on a number of fronts to deal with the power imbalances the digital platforms hold over media businesses.

“However, the government’s approach of a voluntary code of conduct to oversee commercial ­arrangements as a first step ­appears out of kilter with leaders of other jurisdictions who have advocated firmer action,” he said.

ACCC chairman Rod Sims told The Australian there had already been concessions from the digital platforms, with Facebook recently signing a news content deal with News Corp, and they needed time to work through a deal.

“That’s what we recommended. Our view was have a period of negotiations first,” he said. “The platforms have already offered things to media companies that they would not have offered otherwise. The pressure has ­already brought change.”

After the release of the final report, Mr Sims said he was amazed by the digital platforms’ constant pledges to “trust us” on the issue, rather than face hard regulation or revenue-sharing agreements.

He denied he was giving the digital platforms carte blanche on regulation by making the code voluntary. “I don’t think it can be characterised that way. We’ve recommended and government has said there is threat of a mandatory code at the end.”

Mr Sims said he did not want to “pre-empt” exactly how the code would be drawn up but he had flagged the importance of revenue sharing and algorithm prioritis­ation as issues to be addressed.

He said they had talked about issues around data sharing, priority of news, monetisation opportunities and revenue sharing. “We want the parties to talk about that because they have their own trade-offs and priorities that we can’t really substitute for.”

The ACCC will be in charge of the new code rather than the Australian Communications and Media Authority.

Changes to algorithms had ­serious impacts on the way original journalism was presented by Facebook and Google, with The Australian’s managing director, Nicholas Gray, saying original journalism needed to be rewarded by the tech titans. “The Australian has argued for a long time that when a news outlet breaks an exclusive story, they should achieve a prominent place in the tech ­titans’ algorithmically organised rankings for that story,” he said.

Other media outlets gave the government’s response a lukewarm reception, with Seven’s James Warburton saying further compulsory change was needed.