Australia's plan to make big tech companies pay for Australian news on their platforms | 7.30

Key Concepts

• News Bargaining Incentive Plan: The Australian government's initiative to encourage tech companies to pay Australian news businesses for their content.
• Mandatory Bargaining Code: Previous legislation that aimed to force tech companies to pay for news content.
• Australian Revenue Threshold: Tech companies with Australian revenue exceeding $250 million are subject to a charge under the new plan.
• Funding Deals: Tech companies can reduce or avoid charges by entering into voluntary funding agreements with Australian news businesses.
• Public Interest Journalism: Journalism that serves the public good and is crucial for a healthy democracy.
• Revenue Impact: The financial effect of tech companies using news content without payment on media outlets.
• AI Scraping: The practice of artificial intelligence systems harvesting news content without compensation.
• Misinformation: The spread of false or inaccurate information.

The Greek Herald's Financial Pressures and Google's Deal Termination

The Greek Herald, a publication serving the Greek Australian community for nearly 100 years, has faced significant financial challenges due to a declining advertising market. Three years prior, it received funding from Google as part of a Morrison government initiative to compel tech companies to pay for Australian news content used on their platforms. This arrangement was unexpectedly terminated by Google in July, two years ahead of schedule. This event served as a stark reminder to the Greek Herald that large tech corporations can withdraw from agreements, even when formalized.

The Albanese Government's News Bargaining Incentive Plan

The current Albanese government is attempting to rectify the situation with its new "news bargaining incentive plan." This plan is seen as a crucial step forward, demonstrating the government's understanding of the vital role journalism, particularly public interest journalism, plays in a healthy democracy.

Mechanics of the Incentive Plan

Under this plan, technology companies with Australian revenue exceeding $250 million will incur a charge calculated as a percentage of their revenue. However, this charge can be reduced or entirely avoided if these companies enter into funding agreements with Australian news businesses. The structure of the incentive is designed to strongly encourage tech companies to negotiate and finalize such deals.

Industry Reception to the New Plan

The government's initiative to ensure tech giants compensate Australian publishers is broadly welcomed across the media landscape, from small outlets to large corporations. Nine Entertainment CEO Matt Stanton highlighted that the free use of Nine's news stories by tech companies has had a "material effect on the company's bottom line," leading to a reduction in revenues. He stated that while tech companies profit from this content, media companies do not receive the corresponding revenue.

Historical Challenges with Tech Giants and News Payment

Previous attempts to make tech giants pay for news have proven difficult. The Morrison government's initial effort four years ago led to Facebook briefly removing all local news content from its platform before agreeing to pay. However, these relationships proved short-lived, with Facebook terminating its local news funding deals early last year. This resulted in significant job losses, with "circa 50 to 100 journalists" being cut from businesses as they "rebased their cost base." This situation hinders investment in journalism.

Facebook and its parent company Meta have a history of aggressive responses to such regulations. In 2023, when Canada introduced a similar news funding plan, Facebook removed news content from its website, a ban that persists. Rod Sims, former head of the Australian Competition and Consumer Commission (ACCC), who was involved in drafting the initial news funding deal, described Facebook as the "West Coast in AFL terms of the companies we've dealt with," placing them at the "bottom of the ladder." Sims believes that without the news media bargaining code or incentive, media companies would not be rewarded for their journalistic efforts, and the future of media in Australia would be in jeopardy.

Both Facebook and Google declined interview requests. A Facebook spokesperson indicated they would review the proposal and participate in the consultation process. Google stated it is the only tech company that has maintained relationships with Australian publishers since 2020.

International Context and US Influence

The text also touches upon potential international influences. Former US President Donald Trump hosted tech CEOs, including Mark Zuckerberg and Sundar Pichai, at the White House and previously warned countries against imposing tariffs on American tech companies. The Albanese government, however, views its initiative as distinct from US revenue-raising efforts.

Emerging Challenge: Artificial Intelligence and News Content

Beyond traditional social media platforms, Australian media companies are facing a new digital challenge: artificial intelligence (AI) operators harvesting local news stories for their large language models without payment. While News Corp has secured a funding deal with OpenAI, other companies like Nine have not. Matt Stanton noted that Nine's newspaper websites, such as the Australian Financial Review, are being "scraped by AI 8 to 10 times a second." He likened this to "literally walking into a shop, picking a t-shirt up and walking out with it without paying for it."

Conclusion: The Heart of Democracy

Local news leaders emphasize that the new plan to make tech giants pay is crucial not only for improving their financial viability but also for ensuring the survival of trusted news sources in an era of pervasive misinformation. They argue that access to reliable journalism is "absolutely the heart of our democracy" and that without it, society risks being "fed through stuff which is absolutely wrong." The imperative to fix this issue is presented as paramount.