Facebook says it will pay news industry $1B over 3 years
The Australian Competition and Consumer Commission recommended that something be done in relation to the concentration of digital market power, and the impacts to Australia&#x27;s news media:<p>&quot;The 2019 University of Canberra Digital News Report found that that 33 per cent of Australian consumers report accessing news through social media, with 25 per cent using search engines to search for news brands and 20 per cent using search engines to search for particular news stories.<p>Google is a critical source of internet traffic (and therefore audiences) for news media businesses. A news media business risks losing a significant source of revenue if it prevents Google from providing links to its websites in search results. While Facebook contributes a significantly lower proportion of traffic to news media businesses, it remains a vital distribution channel for a number of media businesses, particularly those seeking to target a particular demographic group.<p>The content produced by news media businesses is also important to digital platforms. For example, between 8 and 14 per cent of Google search results trigger a “Top Stories” result, which typically includes reports from news media websites including niche publications or blogs.<p>While the digital platforms clearly value the news media content that they are able to display to their users, Google and Facebook each appear to be more important to the major news media businesses than any one news media business is to Google or Facebook. As set out above, this provides each of Google and Facebook with substantial bargaining power in relation to many news media businesses.<p>The reliance by news media businesses on traffic from Google and, to a lesser extent, on traffic from Facebook also means the digital platforms and their business models have a significant effect on news media businesses. Particular concerns raised during the course of the Inquiry include:<p>* the lack of warning provided by digital platforms to news media businesses of changes to key algorithms relating to the display of news content or news referral links<p>* the implementation of policies and formats that may have a significant and adverse impact on the ability of news media businesses to monetise their content and&#x2F;or to build or sustain a brand and therefore an audience<p>* the impact of such policies on the incentives for news and journalistic content creation, particularly where significant effort is expended to research and produce original content.<p>A key concern relates to Google’s use of news media businesses’ content in snippets, the short summaries or extracts of text that accompany links to a news story and are displayed when a consumer searches for a news story. A similar concern exists in relation to the posts of news stories that appear in a user’s Facebook News Feed.<p>The ACCC recognises that news media businesses, digital platforms, and importantly, consumers benefit from the reproduction of news content in snippets.<p>Media businesses benefit because a snippet provides context and an indication to the user of the value of that content, increasing the likelihood of consumers clicking through than if no snippet were provided (although this may depend on the length of the snippet). Consumers value snippets for a related reason, as the context enables them to make an informed choice of which article to click on. While Google does not generally sell advertising opportunities next to search queries that are considered by Google as having a ‘news intent’, Google benefits because the inclusion of news stories and snippets in search results increases the attractiveness of the Google search engine.<p>This in turn increases the likelihood that consumers will use the search engine for other queries, which can be directly monetised. Facebook benefits because news stories appearing on a user’s news feed retain the user’s attention, enabling more advertisements to be displayed. However, the inability of news media businesses to individually negotiate terms over the use of their content by digital platforms is likely indicative of the imbalance in bargaining power. Individual news media businesses require Google and Facebook referrals more than each platform requires an individual media business’s content.&quot;<p>The ACCC recommended:<p>&quot;Given the imbalance in the relationships between the leading digital platforms and Australian news media businesses, the ACCC recommends that designated digital platforms should each separately be required to provide a code of conduct to the Australian Communications and Media Authority (the ACMA) to govern their commercial relationships with news media businesses. The ACMA would be responsible for designating which digital platforms should be required to implement a code. The development of each code should be informed by a consultation process with news media businesses and contain a strong enforcement mechanism. The ACMA would closely consult with the ACCC in performing its role under this recommendation.<p>Breaches of the code would be dealt with by the ACMA, which should be vested with appropriate investigative and information gathering powers and the capacity to impose sufficiently large sanctions for breaches to act as an effective deterrent.<p>The ACCC considers that if a digital platform is unable to submit an acceptable code to the ACMA within nine months of designation, the ACMA should create a mandatory standard to apply to the designated digital platform&quot;<p>As I understand it, none of the tech giants played ball, so the Government drafted legislation to force the issue.<p>From <a href="https:&#x2F;&#x2F;www.accc.gov.au&#x2F;system&#x2F;files&#x2F;Digital platforms inquiry - final report -executive summary.pdf" rel="nofollow">https:&#x2F;&#x2F;www.accc.gov.au&#x2F;system&#x2F;files&#x2F;Digital platforms i...</a>