The standoff between the Australian Government and the global digital platforms has been a fascinating insight into the power the platforms, particularly Facebook, now hold.

Australia’s News Media and Digital Platforms Mandatory Bargaining Code, just passed by the Australian Senate in the last 24 hours, allows the Australian Treasurer to designate global platforms who then must start negotiating with news businesses about how much to pay them for content through mediation, or if that fails, arbitration.

None of the platforms were happy with the thought of having to pay for something they have been getting for free up until now. And nor did they care that the advantage they had was driving news publishers out of business. However, the big stick of proposed legislation forced Google to reach deals with some major Australian news media outlets. It’s highly likely though that this would never have come about if Bill Gates and Microsoft hadn’t stepped into the breach with the threat of its search engine Bing replacing Google—sufficient enough a concern for Google to cave in.

Facebook however is a different matter. It’s such an all-pervasive platform with no real competition that Mark Zuckerberg felt emboldened enough to cut Australian news feeds from Facebook rather than pay up. An unintended consequence of this was to remove from Facebook Australian-originated information that was considered vital, such as that from health services providing Covid information, charities, food banks, and other important sources. Additionally, the removal of trusted news sources also reignited criticism of Facebook as a promoter of conspiracy theories and fake news.

Facebook’s bullying tactics were lambasted by UK and European Governments, but they did in fact force the Australian Treasurer, Josh Frydenberg, to amend the proposed bill. Rather than all platforms being designated from Day 1, the Treasurer is required to give 30-day’s notice before a platform goes on the list. And Facebook gets to avoid going on the list at this point.

There has been considerable criticism of the Australian Government’s bill from a variety of sources, ranging from that it’s an incredibly blunt instrument to it being favourable towards the major Australian media players while doing nothing for small publishers. There’s more to come on this David vs Goliath battle but Round One seems to have gone to Facebook.

Meanwhile, at the Australian screen producers conference Screen Forever, Australian producers decried the Australian Government’s deregulation of Australia’s commercial networks while failing to regulate Subscription Video On Demand providers like Netflix. Deregulation means the screen industry there has lost the stringent quotas for local content that used to be required of the networks. At the same time, the Producer Offset—the Australian equivalent of the New Zealand Production Grant–for feature film was also lowered from 40% to 30%. These two hits created significant uncertainty about the ability of many Australian production companies to survive. Although there is a mooted requirement from the Aussie Government that SVODs and AVODs invest a percentage of their revenue on Australian content in the form of commissions, co-productions and acquisitions, it’s only in its early consultation phase with nothing concrete expected should it come to pass for some time. While a figure of five percent of revenue has been flagged by Government there as a level streamers would be required to invest in Australian content, amongst the production community 20 per cent is being touted as much more realistic.

This side of the Tasman it’s far too easy to say that the New Zealand Government is being gutless by avoiding to talk about any kind of regulation of global platforms or SVODs. I’m hoping that doesn’t prove to be true.

Tui Ruwhiu
Executive Director