Australia's latest idea to make Big Tech pay for journalism

The Aussies build on the policy that started it all: an update to the News Media Bargaining Code.

A gigantic Australian flag. (Parliament of Australia)

Greetings new readers! Thanks to everyone who subscribed after my interview on today’s Verge “Decoder” podcast, where editor in chief Nilay Patel and I talked about tech’s role in destroying how we fund and distribute high-quality journalism. You can catch the episode on the web, Apple podcasts, Spotify, or right here:

In the show, I mentioned that my union, Media Guild of the West, has supported regulations that would make advertising-driven Big Tech companies help pay for journalism. Australia just introduced a new version of how this would work that would force Google, Meta, TikTok and possibly other tech companies to pony up, which is what I’ll look at today.

Why you should know about Australia’s News Media Bargaining Code

What happened to journalism around the world is that a lot of it used to be funded by advertising, and then it wasn’t anymore. Newsrooms worldwide found they were hurt more by the loss of ad revenue to Google and Meta than what they gained in new digital readerships via subscriptions and so forth.

In 2021, Australia became one of the first countries around the world to develop a successful regulation to claw back some of these advertising dollars. It was called the News Media Bargaining Code.

The concept is pretty weedsy. Basically, it argues the platforms *should* pay news outlets for profiting from their journalism, but aren’t, because of the platforms’ monopolistic bargaining power.

To create bargaining power for the publishers, the Bargaining Code created a hammer the government could drop on Google and Meta — the threat of binding, third-party arbitration — if it didn’t seem like the American monopolies were playing nice and striking deals.

The mere threat of that Australian governmental hammer worked. It’s believed Google and Meta have since invested more than $200 million AUD (~$127 million US) across 30 deals with Australian news outlets representing about 90% of Australia’s journalists.

The Australian Broadcasting Corporation hired 60 more journalists and opened 10 new bureaus; the Guardian’s Australian branch hired more 40 news journalists. Struggling local newsrooms staved off closures.

“There is no doubt that there would be fewer regional and local papers in Australia without the code,” said Andrew Schreyer of Country Press Australia, which represents regional and rural publishers. “The revenue that's provided from the agreements to those under the agreements is absolutely vital.”

But for antitrust-minded journalism do-gooders like yours truly, Australia’s foray is a paradoxical example. The Bargaining Code is both the most successful Big Tech journalism accountability legislation in the world to date. It’s also arguably the most conceptually flawed.

Most of the deals the legislation created were with legacy media outlets, notable in a country where legacy media ownership is dominated by Rupert Murdoch. Small outlets, particularly digital startups, were passed over for negotiation, particularly by Meta. The amounts received by larger news companies were secretive. The deals sometimes didn’t reflect the work journalists were already doing, but new kinds of work more in “alignment with Google or Meta's priorities for news and information on the platform.”

Nor was the incoming funding tied to employing journalists or producing public-interest journalism, which — if we’re being honest — are the only things that justify why publishers should get help and not other digital businesses also getting exploited.

“Yes, there has been money for media companies, but there has been little accountability and little transparency,” said my friends at Australia’s journalism union, the Media, Entertainment and Arts Alliance. “We have no idea how much money has been directed to newsrooms rather than boardrooms.”

Recently, as the first wave of deals’ terms started coming up, Meta — which has been withdrawing from featuring news globally — announced it wouldn’t strike any more pacts. After Canada passed a similar law as Australia’s, Meta banned journalism from its services entirely to evade a payment requirement. The nationwide platform censorship up north remains in effect.

Although thuggish, platform blackout threats are the logical endgame of monopoly bargaining power. When you run the whole marketplace, any given segment of producers needs you way more than you need those producers. You can just starve them out to win, and the news industry is already in a famine state.

Something else would be needed.

Australia escalates the stakes

Rather than throw out the Bargaining Code entirely in response to Meta’s escalation, lawmakers have proposed an expansion to fortify the existing market framework. It would also take some of the teeth out of Meta and Google’s threats to ban journalism in countries trying to force the platforms to pay.

The proposed “News Bargaining Incentive” creates a new form a threatened leverage against Google, Meta and, newly, TikTok and other potential tech companies: a new tax penalty (“charge”) on platforms earning above $250 million AUD that haven’t negotiated deals with Australian media on par with the deals struck in 2021, regardless of whether those platforms carry news.

“We think some of the stuff that you guys produce should be on social media platforms to ensure that there is fact‑checked information available to people,” said a sponsor, MP Stephen Jones.

The proposed penalty is tilted toward striking deals: Every $1 spent on a media deal would erase more than $1 of the platform’s proposed bargaining tax burden. In other words, it’d be cheaper for the platforms to fund journalism directly than pay the government — and in fact, the government doesn’t want to see the platforms’ money.

“We hope not to raise any revenue,” said Jones. “The aim of the incentive is not to raise funds, but to encourage commercial deals,” said cosponsor MP Michelle Rowland.

The interesting thing about this proposal is that it raises the stakes for platforms: Meta couldn’t evade payment like it has in Canada by simply censoring journalism. Meta would probably have to exit the country entirely, which presents a far greater economic hit by tying the fate of Australian news outlets to the fate of all the country’s users.

If there’s retaliation, Jones said, “We’re determined to defend our sovereignty and our right as a government to incentivise and defend the institutions in Australia which we think are critical to our democracy. And that’s a strong robust journalism and a strong robust news media sector.”