Lack of media deals with small firms ‘concerning’: Sims

Denham Sadler
Senior Reporter

Smaller media companies should team up to secure commercial deals with Google and Facebook, which have so far avoided designation under the government’s big tech bargaining code yet, competition tsar Rod Sims says. 

The news media bargaining code, which forces companies designated under it to enter into final offer arbitration to determine revenue sharing deals, was passed by Parliament in late February with bipartisan support. 

During sustained debate around the legislation, Google and Facebook signed a series of term sheets with large Australian publishers, including News Corp and Nine, and both tech giants have so far avoided being designated under the code.

While some smaller publishers like Private Media and Schwartz Media have also secured deals, many other small media companies are struggling to negotiate with the big tech firms without the backing of the bargaining code.

Rod Sims: Small media companies should unite to deal with big tech

The bargaining code was designed by the Australian Competition and Consumer Commission (ACCC), and its chair Rod Sims said the presence of the code has helped with negotiations but he is concerned that smaller firms are yet to secure agreements.

“I am concerned. Those deals certainly need to get done,” Mr Sims told InnovationAus.

“I’m hoping that those small companies can come to us for collective bargaining and that will put them into the position to get the deals.”

Liberal Senator Andrew Bragg has written to Google and Facebook raising concerns that the companies are yet to struck many deals with smaller media companies, saying that it’s “important that we see the colour of their money”.

The bargaining code included a provision that smaller companies can work together to secure a deal with Facebook or Google, but this hasn’t been utilised as no company has been designated under the code.

But Mr Sims said that companies can already apply to the ACCC to take part in collective bargaining. He urged smaller media companies to do this, with only one application having been received so far.

“If you’ve got a collective bargaining authorised through us, then that enables you to jointly bargain with them and it sends a signal to Google and Facebook that you need to be dealt with. It benefits both sides of the equation,” he said.

“I expected a few more companies to collectively bargain. But it doesn’t matter if it’s individual or not – they can do it on their own but I’m keen to make sure everyone can collectively bargain.

“A lack of designation doesn’t trigger the automatic ability to collectively bargain but it really doesn’t matter. The message I want to get out there is we can, in general, without legislation, authorise collective bargaining. It’s extremely quick, it’s pretty much the equivalent.”

The Coalition made a number of last minute amendments to the bargaining code legislation after Facebook briefly pulled all news content for Australian users. These changes were viewed by critics as a watering down of the code and as the government giving in to the demands of the big tech firms.

But Mr Sims said changes to the code were “inevitable”, and that its fundamental elements remained intact.

“In any negotiation you have to work out what matters to you and what matters to them, and the changes were things that mattered to the digital platforms for whatever reasons but didn’t matter as much to us. They weren’t worth dying in a ditch over,” Mr Sims said.

“We still got the code legislated and so far we’ve got Google and Facebook doing a lot of deals, but we hope to see even more deals done. You can’t be absolutist about these things. The fundamental bits have survived, and otherwise it’s just wording changes that don’t much matter.

“Obviously getting designated matters a lot to Google and Facebook, and there’s a chance to avoid that by doing deals. It’s in their hands if they get designated or not. If they choose to do deals and avoid that then that’s the outcome we were after. The legislation sits there anyway.”

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