Do bargaining codes have a future?

By Fiona Martin, Associate Professor in Online Media, University of Sydney

When Australia introduced its ‘world first’ ‘News Media Bargaining Code’ (NMBC)in March 2021, it looked like a funding lifeline for public interest journalism providers including the Australian Broadcasting Corporation (ABC), the country’s national broadcaster.

The Code required tech companies Facebook and Google to negotiate voluntarily with media companies over the value of hosting news on those platforms. The deals struck provided roughly $70 million a year to support local journalism, and the ABC used its payments to create 60 new regional news jobs.

The Australian federal government estimates that from around 40 deals over three years, the Code extracted around A$200 million from big tech, making it a model for competition law policy transfer. It inspired Canada’s 2024 Online News Act, the UK’s Digital Markets, Competition & Consumer Bill and New Zealand’s Fair Digital News Bargaining Bill. Brazil and South Africa are contemplating similar laws as part of platform power inquiries.

Read more: Australia & NZ confront big tech as media crisis grows

The aims of such mechanisms are to mitigate the significant imbalance between the advertising revenue acquisition power of global platforms and local information providers, and to reverse the decline in domestic news revenue that is leading to outlet closures and reducing media diversity. So far large European actors like France and Germany have favoured copyright law and news licensing deals over competition regulation, but there are indications that they may also move towards ‘state sanctioned bargaining’.

However, Meta’s reluctance to negotiate with some Australian publishers and its attempts to fight off regulation signals the inability of competition law to achieve equitable outcomes for all market players.

In the Australian context, Meta, unlike Google, refused to negotiate a deal with two public media outlets: the country’s public service multicultural broadcaster, the Special Broadcasting Service (SBS) and the University-supported The Conversation. Facebook provided no reason for not negotiating with the SBS, or most of the radio industry players that sought to bargain via the NMBC.

The Australian experience suggests the real winners from the NMBC are Rupert Murdoch’s News Corp and Nine Entertainment, the country’s two largest media companies. Smaller players have been more likely to lose out as they have less access to legal advice in negotiations and are unaware of the amounts other players have secured. Some have had to strike collective deals where those were possible.

Smaller players also have fewer alternative sources of revenue if platforms pull out of these arrangements. Even ABC Managing Director David Anderson noted that Meta abandoning the next round of bargaining would generate a financial challenge for the whole company, forcing it to reconsider the future of its 60 new NMBC funded regional positions.

There is significant concern about the lack of transparency of the commercial deals being struck using the NMBC. As the Australian government discovered in a one year review of the Code, there is limited publicly available information about whether the funds obtained were actually spent on journalism. The bargaining process has also generated little understanding of the value of news commercially, or its benefits to the wider community.

Recent research suggests the Canadian Act, by way of contrast, has far more transparency provisions including an annual report detailing the total market value of the agreements, how that value is distributed and how it affects spending on journalism. Under the terms of the Google funding deal, however,CBC/Radio-Canada’s portion of the $100m is capped at $7m.

Read more: The news funding model is broken – but this would fix it

The Canadian Act is also more closely aligned with public interest objectives. It explicitly includes small players like community and college radio and requires the regulator to attend to the media diversity of deals negotiated and the degree to which independent media might benefit.  Even so, it has yet to be tested in practice.

Job losses and economic upheavals in the tech sector also suggest the need for governments to find other means of funding public interest news in an era of digital competition.

Some lobbyists argue a more effective, accountable alternative to arbitration approaches would be the imposition of a levy on the platform companies’ total revenues or digital advertising.

The question however is not just how best to distribute such funds for public interest outcomes but whether this will, in the longer term, address the dangers to democracy of unaccountable global tech companies and their growing influence over public opinion.