The levy that dare not speak its name
News incentive backs up flawed code
The Australian government has decided to tax big digital platforms if they do not give money to news publishers, regardless of whether they carry news.
The News Bargaining Incentive was announced yesterday, although it’s early days yet: a consultation paper will be released next year, after which the legislation will be drawn up. With a federal election coming up, it will be some time before we see the details. The legislation will reportedly be backdated to January 2025 if it is enacted.
The rationale behind the incentive is to fix a “loophole” in the News Media Bargaining Code: platforms that do not carry news cannot be forced to pay for it.
I support a levy on digital media giants, but not like this.
The News Media Bargaining Code was designed to force Meta and Google into paying publishers for news. It was enacted but never used, except as a threat. It worked insofar as the two giants are estimated to have paid as much as A$600m to publishers like News Corp, Nine, Seven, the Guardian and the ABC over three years.
On the other hand, it hasn’t worked in that Meta has walked away at the first opportunity - after the initial agreements expired - because Meta does not value news and doesn’t want to keep paying protection money forever. Google has a different business model and approach, and apparently sees the millions it must hand over in Australia as a cost of doing business. Those millions have certainly reduced Google as a target for hostile media coverage in Australia.
What’s good
I believe news “must carry” requirements are essential for any scheme whose aim is to support public interest news.
While the new incentive approach doesn’t mandate news carry, it makes carrying news and paying for it cheaper than the alternative. In explaining the News Bargaining Incentive, the government said it would be more expensive to pay the tax than to do deals with publishers. It also anticipates that companies beyond Google and Meta would be caught up in the scope of the new tax. Tiktok was mentioned.
What’s bad
The reason I think good policy begins with must carry is that there must be a logical connection between the platform and any tax raised to support news. There must be a nexus. Without it, any law that raises money for news is arbitrary and won’t stand up to legal interrogation.
Think about the tax raised under the News Bargaining Incentive scheme as described. Just say Meta decides to pull all news in its Australian products (Facebook and Instagram). The government says it must pay the tax. But this tax has explicitly been tied to news, through the offset for existing deals with news publishers. The tax is vulnerable to a legal challenge because there is no nexus.
The News Media Bargaining Code that this new incentive backs up is fundamentally flawed - deals are private, money doesn’t necessarily go to journalism, incumbents are favoured and challengers penalised, and it’s all based on the pretence of paying for news. The digital giants are not paying for news, they are paying to be left alone.
Instead of pulling down the shanty of this Code, the government is attempting to shore it up. Maybe there’s a path beyond the incentive to more solid support for public interest news. But this feels bodgy.
ChatGPT, Sora back in action
OpenAI has fixed whatever was causing ChatGPT and its video tool Sora to break. Above is a still from a world that was supposedly made of donuts. Sheesh. And the woman in the cafe walked right through the chair. More next week.
Have a great weekend
Hal
News companies have the option of blocking the crawling companies' crawlers. Rather than giving them specifically allocated text and images as they usually do now. But they choose to get an increase in web traffic and brand exposure instead.
Should the crawling companies pay something for their news content? Probably. Should they pay something for all the content posted by someone that doesn't own it? Probably.
An ideal system might involve a page header denoting that the page's owner wishes to be paid for any use of it's crawled text and images. The crawler could then look up the requested fee at a particular rights collection agency, and choose not to use the resources or not. If it likes the deal, it would lodge it's use of that page's resources with the agency. At the end of the month, the operator of the page would receive a payment.
The case can be made that what is proposed is similar to our FTA TV regulations. Organisations that want to broadcast in a particular way have to have a certain proportion of Australian/NZ content, with incentives for some kinds of programming over others. Some local news must be produced in many regional areas. Not long ago, they had to commission a particular amount of new Australian made children's programming each year. Plus there is an annual fee for using the airwaves.
Rather than force companies that don't produce content to produce it, or charge them for using the NBN; the government appears to be proposing to apply a tax to all "significant social media or search services", which will be spent on news production. If the operators of such services can negotiate a separate deal with the "news publishers", then much like with private health insurance and the Medicare levy, they will pay no tax. If not all publishers are negotiated with, one can only presume that a partial tax will be levied and distributed.
The country already requires that certain kinds of content be commissioned by certain media companies, and now we will see if that requirement will be extended.
Bodgy is the word!