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Digital giants continue to cast a shadow over the tech news landscape
As more and more people get news and information from social media, one key issue has emerged in the international arena: bargaining power between news outlets and social media giants for fair remuneration.
Key Takeaways
- The imbalance in bargaining power between digital platforms and news producers has led to the need for laws that ensure fair remuneration and protect the quality of news.
- Australia and Canada have implemented laws that require tech giants to negotiate with news producers for fair compensation, although there are still concerns about transparency and eligibility for smaller news producers.
- While these laws may initially lead to platforms limiting access to news content, the experience in Australia shows that eventually deals can be struck, and other countries are considering similar regulations.
Some countries have enacted laws requiring major social media platforms to pay for news. A glaring example was when Australia in 2021 introduced the News Media and Digital Platforms Mandatory Bargaining Code (News Media Bargaining Code) which requires arbitration to take place in case two parties cannot reach an agreement. Late last year, the Canadian parliament passed the Online News Act that enables news producers to negotiate with digital giants for fair payment.
The main reason for such a crucial law is imbalanced bargaining power between digital platforms and news producers, given the fact that consumers tend to turn to digital platforms like Google and Facebook for news and information. While traditional media such as television or print have seen decreased viewership, they are forced to rely on these platforms to increase their visibility, or “eyeballs”.
However, this reliance on platforms means news producers do not receive appropriate compensation, while platforms enjoy increased advertising revenue. This has raised concerns that it could lead to a decline in the quality of news.
Furthermore, the superior technical capabilities of these tech giants, particularly their advanced recommendation system algorithms, allow them the power to control and prioritise the content displayed on their platforms. This gives them a significant advantage and creates a considerable imbalance in bargaining power between them and news producers. Recognising this, many governments are now considering the implementation of legal mechanisms to rectify this imbalance and ensure a more equitable playing field.
Australia, the Pioneer
Australia is also among the first countries to issue a “News Media Bargaining Code” of its own, which authorises news producers to bargain with tech giants for remuneration. Under the law, news producers that register with the Australian Communications and Media Authority (ACMA) have the right to seek arbitration in disputes and negotiate for fair payments for news content appearing on digital platforms. Those violating the code will face a fine of 10 million Australian dollars maximum or 226.9 million baht.
The law was initially met with resistance from social media giants. Facebook notably blocked Australian outlets, preventing Australians from receiving news on the platform for approximately three months.
Google initially announced plans to remove its search tool but later launched the News Showcase, a new platform designed to allow news producers and news organisations to partner in presenting news on the platform. Google compensates participating businesses in the form of “news content publication fees” instead of compensation from viewing links in the search tool.
Currently, Google and Meta negotiate with both large and small news producers, reaching approximately 30 agreements at both the municipal and regional levels. It’s estimated that since the legislation came into force, Google and Facebook have paid more than A$200 million to news producers while more than 100 jobs have been created. Moreover, ABC News claimed that the legislation has generated over 50 regional job positions.
However, A year after the implementation of the law, a review revealed significant gaps, particularly a lack of transparency in the agreements, as terms and remuneration amounts are kept confidential. Therefore, it’s not certain that news producers really get fair remuneration. Besides, small-scale new producers, those with lower income, less than A$150,0000 per year, are not eligible for registration with ACMA, and that means they are not protected under the code. With this, some critics still think the code remains unfair.
Case of Canada
The Online News Act of Canada has a similar objective to the Australian version. Its goal is to rectify imbalances in the digital media market by mandating that large platforms negotiate fair and transparent compensation with news producers. However, there are notable differences between this and Australia’s News Media Bargaining Code. Under the Australian code, the Treasury Department is authorised to decide which platforms are considered “designated platforms”, which must comply with bargaining rules, while the Canadian legislation has clear rules regarding platform sizes, strategic advantages, and market dominance.
In addition, the two versions set up an arbitration system when parties cannot settle their disputes. But the Canadian version has what is known as “final offer arbitration”, which allows each side to propose the numbers that suit them best, and the arbitration panel will choose one. This can encourage both parties to propose fair deals from the beginning.
Before the Online News Media Act came into place, there had been concerns that the law is tantamount to market intervention and even state intervention in editorial or business operations. Besides, some were worried that the law may intensify struggling media outlets’ dependency on tech giants and the state to the point that it affects public trust in journalistic freedom. Interestingly, Canada’s independent budgetary watchdog estimated that news outlets may collectively receive up to C$329 million or 8.77 billion baht per year from tech giants.
After the law was implemented in June this year, tech giants like Google and Meta, parent of Facebook, vowed to limit Canadian users’ access to news content.
Yet, some observers are of the view that without such a law, it’s unlikely that tech giants like Facebook or Google would negotiate with news organisations. The legislation is thus a significant tool to rebalance bargaining power so that news outlets get the fair compensation they deserve and are encouraged to create constructive content that tech giants cannot.
One must also be made aware that the enactment of these laws may lead platforms to choose not to offer their services in countries implementing them, or to block news originating from them, as has been the case in Canada and Australia. This could result in citizens having less access to news, thereby reducing the societal benefits of news. However, the experience in Australia demonstrates that platforms may initially react this way but eventually end up striking deals with news and content producers.
Globally, many countries are following in the footsteps of Australia and Canada, which have already announced the adoption of such regulations. For example, the United States is in the process of formulating the Journalism Competition and Preservation Act, and the United Kingdom is drafting the Special Market Status legislation.
As those involved are weighing up the pros of cons of this kind of law, and it will take some time before they come to a conclusion. Thailand has to wait and monitor the effectiveness of the legislation and eventually adopt one that suits the country’s context to make sure it will be of great benefit to society.
Writer : Saliltorn Thongmeensuk, PhD, is a research fellow. Nopphasin Camapaso and Chattrika Napatanapong are researchers at the Thailand Development and Research Institute. Policy analyses from the TDRI
First Publish: Bangkok Post On 2 August 2023
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