Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Act 2021

Second reading speech, Josh Frydenberg, Wednesday 9 December 2020 (from House Hansard page 11013)

That this bill be now read a second time.

This bill establishes a mandatory code to address the bargaining power imbalances that exist between digital platforms and Australian news media businesses. It represents a major reform—an historic reform—a world first, where the eyes of the world will be on what is occurring here in Australia.

Public interest journalism plays an important role in our society. It is critical to the functioning of our democracy. This role can only be fulfilled by a strong, diverse and sustainable Australian news media sector.

This bill responds to the key findings of the Australian Competition and Consumer Commission's (ACCC) digital platforms inquiry.

The ACCC conducted a detailed world-leading inquiry over almost 18 months and set out a series of recommendations in response to the substantial market power that has arisen through the growth of digital platforms, their impact on competition in media and advertising markets and their implications for news media businesses, advertisers and consumers.

The ACCC found that digital platforms have become unavoidable trading partners of news media businesses, providing them with substantial bargaining power.

The problem is not unique to Australia, and we recognise that similar findings are emerging overseas.

Since commissioning the ACCC review in December 2017, the Morrison government has undertaken an extensive policy development process that has been going for almost three years and which has included public consultation on a position paper and exposure draft legislation.

As the Prime Minister has said, the laws of the digital world should reflect as far as possible the laws of the physical world.

We are not seeking to protect traditional media companies from the rigour of competition or, indeed, technological disruption, which we know benefit consumers.

Rather, we are seeking to create a level playing field where market power is not misused and there is appropriate compensation for the production of original news content.

To that end, this bill will establish a new world-leading code of conduct for news media businesses and digital platforms.

The code ensures that digital platforms share the benefit they obtain from using Australian sourced news content with the news media businesses who create that content.

The Treasurer will be able to determine that a digital platform is subject to the code, having regard to ACCC and Treasury advice about whether a substantial bargaining power imbalance exists.

ACMA, the Australian Communications and Media Authority, would assess the eligibility of Australian news media businesses to participate in the code against criteria set out in the code.

The framework contained in the bill recognises that agreements can be entered into outside of the code. Indeed, they are encouraged to be entered into outside of the code. Where a news media business reaches an agreement with a digital platform, it can agree to not bargain or pursue compulsory arbitration under the code.

If a news media business cannot reach an acceptable agreement with a digital platform outside of the code, it will have the option to trigger aspects of the code to address the bargaining power imbalance. This includes minimum standard obligations that digital platforms must meet for all news media businesses registered under the code, requirements for good faith bargaining over remuneration and the application of final offer arbitration if bargaining between the parties does not succeed.

Should arbitration be required, both parties must each submit a final remuneration offer. Arbiters are then required to:

Consider the benefits for both parties from having Australian news content available on digital platforms; and

Take into account the cost of producing news content and whether any final decision places an undue burden on the digital platforms.

In assessing the offers made by each party, arbiters must consider the outcome that would have arisen if commercial negotiations had taken place in circumstances where the digital platform did not have a bargaining power imbalance.

The code also contains provisions to limit, as far as practicable, digital platforms' ability to avoid the code and to take retaliatory action against news media businesses for participating in the code. This includes through provisions that prohibit digital platforms from differentiating between Australian news media businesses covered by the code.

Penalties will apply to breaches of the key provisions of the code.

The ACCC will be responsible for enforcing the code and will be able to issue infringement notices with smaller fines for minor code breaches.

The code will be reviewed by Treasury after one year of operation to test the effectiveness of its operation.

The News Media and Digital Platforms Mandatory Bargaining Code is a world-leading initiative. It is designed to level the playing field and to ensure a sustainable and viable Australian media landscape. It's a key part of the government's strategy to ensure that the Australian economy is able to take full advantage of the benefits of digital technology, supported by appropriate regulation to protect key elements of Australian society. One such key element is a strong and sustainable Australian news media landscape.

Full details of the measure are contained in the explanatory memorandum. I commend the bill to the House.

Debate adjourned.

Second reading speech, Senator Seselja, Monday 22 February 2021 (from House Hansard page 76)

Senator SESELJA (Australian Capital Territory—Minister for International Development and the Pacific) (17:46): I table an addendum to the explanatory memorandum and revised explanatory memorandum, and move:

That these bills be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

This Bill establishes a mandatory code to address the bargaining power imbalances that exist between digital platforms and Australian news media businesses.

Public interest journalism plays an important role in our society. This role can only be fulfilled by a strong, diverse and sustainable Australian news media sector.

This bill responds to the key findings of the Australian Competition and Consumer Commission's (ACCC) Digital Platforms Inquiry. The ACCC conducted a detailed world-leading inquiry over almost 18 months and set out 23 recommendations in response to the substantial market power that has arisen through the growth of digital platforms, their impact on competition in media and advertising markets and implications for news media businesses, advertisers and consumers.

The ACCC found that digital platforms had become unavoidable trading partners of news media businesses, providing them with substantial bargaining power.

This problem is not unique to Australia and we recognise that similar findings are emerging overseas.

Since commissioning the ACCC review in December 2017, the Government has undertaken an extensive policy development process over almost 3 years which has included public consultation on a position paper and exposure draft legislation.

As the Prime Minister has said, the laws of the digital world should reflect as far as possible the laws of the physical world.

We are not seeking to protect traditional media companies from the rigour of competition or technological disruption - which we know benefits consumers.

Rather, we are seeking to create a level playing field where market power is not misused, and there is appropriate compensation for the production of original news content.

To that end, this Bill will establish a new, world-leading code of conduct for news media businesses and digital platforms.

The code ensures that digital platforms share the benefit they obtain from using Australian-sourced news content with the news media businesses who create that content.

The Treasurer will be able to determine that a digital platform is subject to the Code, having regard to ACCC and Treasury advice about whether a substantial bargaining power imbalance exists.

ACMA (Australian Communications and Media Authority) would assess eligibility of Australian news media businesses to participate in the Code against criteria set out in the Code.

The framework contained in the Bill recognises that agreements can be entered into outside of the Code. Where a news media business reaches an agreement with a digital platform, it can agree to not bargain or pursue compulsory arbitration under the code.

If a news media business cannot reach an acceptable agreement with a digital platform outside of the Code, it will have the option to trigger aspects of the code to address the bargaining power imbalance. This includes minimum standard obligations that digital platforms must meet for all news media businesses registered under the code; requirements for good faith bargaining over remuneration and the application of final offer arbitration if bargaining between parties does not succeed.

Should arbitration be required, both parties must each submit a final remuneration offer. Arbiters are then required to:

Consider the benefits for both parties from having Australian news content available on digital platforms; and

Take into account the cost of producing news content and whether any final decision places an undue burden on the digital platforms.

In assessing the offers made by each party, arbiters must consider the outcome that would have arisen if commercial negotiations had taken place in circumstances where the digital platform did not have a bargaining power imbalance.

The code also contains provisions to limit, as far as practicable, digital platforms' ability to avoid the code and to take retaliatory action against news media businesses for participating in the Code. This includes through provisions that prohibit digital platforms from differentiating between Australian news media businesses covered by the Code.

Penalties will apply to breaches of the key provisions of the Code.

The ACCC will be responsible for enforcing the Code and will be able to issue infringement notices with smaller fines for minor Code breaches.

The Code will be reviewed by Treasury after one year of operation to test the effectiveness of its operation.

The News Media and Digital Platforms Mandatory Bargaining Code is a world-leading initiative and a key part of the Government's strategy to ensure that the Australian economy is able to take full advantage of the benefits of digital technology, supported by appropriate regulation to protect key elements of Australian society, such as a strong, sustainable and independent Australian news media.

Full details of the measure are contained in the Explanatory Memorandum.

Debate adjourned.