The competition watchdog’s plan to force Google and Facebook to enter revenue sharing deals with news companies risked turning into a “bailout” for the likes of News Corp Australia, according to Labor MP Ed Husic.
The Australian Competition and Consumer Commission (ACCC) is currently consulting on its code of conduct aimed at addressing the bargaining imbalances between digital platforms and media companies.
The code would require Google and Facebook to enter into forced arbitration with media companies to determine a revenue sharing deal for the use of news content, and would also see them being legally required to provide advance notice of relevant algorithm changes and information on the data it collects on readers.
Google launched a public offensive against the draft law last week, with an open letter to Australians and continual pop-up messages to users on Google Search and YouTube, warning that those services are “at risk”. The ACCC quickly hit back at Google, accusing it of spreading “misinformation” over the code.
The ACCC must be “very careful” with its plan or it risk its effort to address the market power of Google by helping to cement the market power of large media companies, Mr Husic said.
“I’m conscious that the beneficiaries of this process, particularly News Corp, have benefited from some of the most concentrated media markets on the planet. We need to walk into this [with] eyes wide open,” Mr Husic said on Sky News, which is owned by News Corp, on Monday.
“I was surprised at the level of reaction that people had to Google putting its side of the story forward. The anti-regulation News Corp has bear hugged the ACCC and got the ACCC to come out and express its views it has in the last few weeks,” he said.
“I’m very concerned this is shaping up to be a News Corp bailout rather than a genuine attempt to level the playing field.”
Mr Husic said he became “suspicious” of the plan when the government announced earlier this year that it was bringing to a halt the negotiations over a voluntary code of conduct to begin work on the legally binding plan.
Google began a public offensive against the proposed code of conduct, which would see it and Facebook to enter into forced arbitration over revenue-sharing deals or face significant fines, last week and quickly entered into a war of words with the Australian Competition and Consumer Commission.
“I’d be very interested in whether or not the ACCC had expressed to all the parties involved in the negotiations whether or not they were actually dissatisfied with the way Google and the others were responding to the ACCC leading into the actual negotiations,” he said.
“News Corp has railed against regulation in times past and is now shaping up the negotiating tables in its favour through these negotiations.
“News Corp has made a series of business decisions over the years that have turned out bad and now they’re trying in effect to get the ACCC and a compliant Coalition to act on their behalf.”
But the government does need to take action to address the overwhelming market power of Google, Mr Husic said.
“I’ve previously said the ACCC’s work has been really solid. But it’s one thing to do the report, it’s another thing to execute it. When these negotiations were prematurely ended by the government in April, I started to get very suspicious about this,” he said.
Mr Husic’s comments were in contrast to his colleague, shadow assistant minister for treasury Andrew Leigh, who said the proposed scheme asked Google to “negotiate fair payment for Australian news content”.
“In response, the trillion-dollar search engine launched a misleading scare campaign. Google claims that having to give news organisations advanced notion of demotion would give others an unfair advantage. It wouldn’t,” Mr Leigh said in Parliament on Monday.
“It says that sharing data would lead to data breaches. In fact, Google won’t be required to share any additional user data with media outlets unless it chooses to do so,” he said.
“Google makes hundreds of billions of dollars every year. It can afford to share a small slice of that with the news media that is fundamental to Australian democracy.”
Google continued this “scare campaign” on Monday, published a blog post on “13 things you need to know” about the code.
In the post, Google labelled the code “unworkable” and that the sharing of information on algorithm changes would “provide an unfair advantage to large news businesses and help them feature more prominently in organic search results at the expense of other businesses, creators and website owners”.
The global tech company also said that the proposed “unfair arbitration process…ignores the real-world value Google provides to news publishers and opens up to enormous and unreasonable demands”.
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