Australia’s building a great system to fund local journalism — but it doesn’t want to use it

In 2022, I got cranky with the nation of Australia over its News Media Bargaining Code — its convoluted scheme to get money out of big tech companies’ pockets and into news companies’. The idea in a nutshell was this: Two giant American tech companies, Google and Meta, had abused Australian news publishers by “taking” their stories and including them in their search results and social feeds. Publishers were due compensation for this wrong — but the tech giants refused to negotiate over how much. So the government ordered these negotiations to take place; Google and Meta would need to strike individual deals to pay some undetermined number of publishers some undetermined amount of money. If the government felt they’d paid publishers enough, then that’s that. If it didn’t, though, the government could mandate further bargaining and, eventually, require third-party arbitration that could cost companies bigly. I am in favor of publishers getting money, and I am in favor of Google and Facebook being the ones writing the checks. But the system had major problems, both philosophical and practical. Last week, the Australian government announced a successor to the News Media Bargaining Code — the (annoyingly similarly named) News Bargaining Initiative. It’s a clear improvement. Indeed, with a single change, it’d be close to an ideal system. But without that change, I suspect it’ll end up repeating many of the old system’s flaws. You can read my 2022 piece for a lengthy discussion of those flaws, but here’s a summary of the two big ones. Australian media companies, like their peers around the world, have long complained of the tech giants’ “theft” of their intellectual property. That “theft” consisted of…letting Facebook users link to news stories and Google including news stories in search results. Those things are not theft; social media platforms and search engines are legal. And if you want to argue that they are theft, then why are they theft only for a small set of news companies and for not every site on the internet? The intellectual property theft claims have always been a way to paper over publishers’ actual complaint, which is what this has always been about: Google and Meta have a near-monopoly on digital advertising revenue. More than 80% of all Australian digital ad dollars go to those two companies. It turns out that putting ads next to search results and social feeds is a much more lucrative and scalable business than putting ads next to news stories. News outlets used to make enormous sums from advertising in print and broadcast media, but online, they earn a fraction of a fraction of a fraction of what these two tech giants do. This is, to be clear, a very legitimate complaint! Google and Meta having that much market power is a dangerous thing from an antitrust perspective. It is perfectly appropriate for both Australian publishers and the Australian government to be concerned that their nation’s media is being undercut by a new revenue paradigm they can’t win at. Liberals will argue quality journalism is a civic good essential to an informed democracy. Conservatives will argue this is an important Australian industry that deserves protection. Populists will argue the need to confront American cultural imperialism. They’re all correct. But it’s not the complaint the News Media Bargaining Code was based on — which was that including news stories in search results and social feeds is somehow a violation of publishers’ rights and that they are due financial compensation for it. You might say that’s just a philosophical quibble. But Meta turned it into a very practical one when it called Australia’s bluff — twice. First, in 2021, it announced that, if the problem was really how Australian news appeared in Facebook feeds, it had a solution: banning Australian news stories from Facebook. Problem solved, right? Of course not — because the “theft” of letting someone share your story on Facebook was never the actual complaint. Meta lifted the ban after extracting concessions from the plan. (It repeated the move in Canada when faced with a similar program — except there, it’s never lifted the ban, making it clear to governments that it considers news very much optional on its platforms.) Then, two years ago, Meta announced that it was done negotiating these deals with publishers and let all existing ones expire. Did the government then follow through with what the News Media Bargaining Code allowed — declaring Meta in violation of its obligation to negotiate fairly and force them into mandatory arbitration? No. Instead it did…well, nothing, really. It didn’t pursue further action (called “designating” Meta, in the code’s parlance) because it believed that doing so would just lead to Meta blocking news on Facebook again, and it wanted to avoid that outcome. This has never, ever been about the platforms’ “theft” of news. It has always been about the platforms’ dominance of the digital advertising market and the hole that has left in publishers’ budgets. The code set no firm requirements on what these “negotiations” needed to entail. It didn’t set how many publishers needed to be paid or how much. It just said that Google and Meta needed to show a good enough effort that the government wouldn’t designate them as unfair bargainers. Which basically came down to vibes — the companies weren’t required to share the totals with other publishers or even with the government itself. It was all done in secret. Deals contained clauses forbidding publishers from revealing how much they got. That’s an artifact of the code’s fundamental lie that this was about business negotiations between private companies. Google was supposed to figure out how much it “owed” News Corp for the crime of including Brisbane Courier-Mail stories in search results, and News Corp could keep saying “higher” until it got a number it was happy with. It was a private act of theater. This had several negative knock-on effects. First, the country’s largest news publishers — Rupert Murdoch’s aforementioned News Corp and Nine Entertainment, owner of the Sydney Morning Herald and The Age — had some actual power in the negotiations, because they were big enough to plausibly complain to the government if they felt they weren’t getting enough. But smaller fry were either given perfunctory take-it-or-leave-it offers or excluded altogether. (It surely didn’t hurt that the largest reported payments went to News Corp, which just happened to be a big supporter of the conservative Prime Minister Scott Morrison, whose government came up with the scheme.) The contracts were also dishonest about what the tech companies were buying. On paper, the deals were all about G&M licensing news stories for Google News Showcase and Facebook’s News tab. In reality, those were nullities as products that were constructed in part to be vessels for these payments to happen. These are significant problems, and they all come down to that fundamental act of pretending what this is all about. If this is about how individual companies have been wronged, and all the government is doing is bringing the two sides to a negotiating table, then you can argue this secrecy and imbalanced power is fine. Cloaking a government-mandated subsidy in the language of “bargaining” made the system worse at every turn. Morrison’s party was ousted in 2022 and he was replaced by the liberal1 government of Anthony Albanese. While his government was the one that declined to “designate” Meta after it stopped paying publishers, it recognized that a new approach was needed. After much process, it unveiled its proposed result last Wednesday: the News Bargaining Incentive. It’s an improvement. But unfortunately, the Albanese government seems intent on continuing to dress up a public policy decision as the marketplace at work, and that will continue to weaken the system. The NBI, as the name implies, still aims to offer an incentive for Google and Meta to ba…