20 April 2020

Interview with Sabra Lane, AM, ABC

Note

Subjects: ACCC digital platforms mandatory code of conduct;

SABRA LANE:

Josh Frydenberg, thanks for joining AM. There will be many Australians who’ll think ‘why is this important?’ today.

JOSH FRYDENBERG:

Well this is important because it is important to the future of our media landscape. What we have seen with the rise of the digital platforms is many consumer benefits, but also a large degree of disruption. That has brought into focus and into question the viability of our traditional media outlets and the inability of the current regulatory framework to ensure that journalistic content is properly compensated. So that’s why, Sabra, we tasked the ACCC to prepare a groundbreaking report, that was during the Prime Ministers’ time as Treasurer. They recommended that a code be put in place. We went down the path of a voluntary code between the digital platforms and the traditional news media businesses. That didn’t bear much fruit so now we’ve moved to a mandatory code which will be out for comment by the end of July. 

SABRA LANE:

Alright. You’ve just indicated there, the ACCC boss, Rod Sims, had been trying to negotiate a voluntary code, talks went nowhere, why?

JOSH FRYDENBERG:

Well I think it was an inability of the parties to reach an agreement on this key issue of payment for content. In the words of the ACCC, there was no expectation of any progress being made with respect to that key issue which the code was seeking to deal with and that’s why we’ve gone down this path. We’re very conscious of the challenges and the complexity of ensuring a mandatory code. Many other countries have tried it but without much success. So we think we can be world-leading.

SABRA LANE:

Yeah well Spain, just on that point, Spain tried to make Google pay and it simply shut down its news platform as a result. How will you make sure they pay?

JOSH FRYDENBERG:

I think the report that the ACCC has prepared has been world-leading and I think the mandatory code that we will put in place will also be world-leading and we think we can succeed where others may have failed. We can’t deny the importance of this issue. We can’t deny the importance of creating a level playing field, ensuring a fair-go for companies and the appropriate compensation for content. We do want the rules of the digital world to reflect as much as possible the rules of the physical world.

SABRA LANE:

Will they be sharing their ad revenue too?

JOSH FRYDENBERG:

The idea is that they pay for content. They use the journalistic material that is produced to get traffic on to their websites, that’s how their business operates, and then they sell advertising. Now, they will continue to sell advertising but if you take away that journalistic content or you make it mandatory for them to pay for it, then no doubt, that may hit their bottom line.

SABRA LANE:

Will they have to share their ad revenue too?

JOSH FRYDENBERG:

That’s not the focus right now, is the ad revenue. The focus is paying for content.

SABRA LANE:

But that could lead to them sharing advertising revenue.

JOSH FRYDENBERG:

They are very different issues. The issue in question is actually fair compensation for journalistic content that is prepared. What the advertising revenue numbers do show is the size of these businesses, their market power, the concentration that we have seen within Google and Facebook. And to put it into perspective for you and your listeners, Sabra, for every $100 of online advertising spent in Australia excluding classifieds, $47 goes to Google, $24 to Facebook and $29 to other players. So they’ve completely dominated the space.

SABRA LANE:

How big will the penalties have to be? You’ve said you also want a draft done by July. When will it be law?

JOSH FRYDENBERG:

Well again, we’ll put it out for comment after it has been drafted by the ACCC, and working closely with my Department in Treasury, and Paul Fletchers’ Department in Communications, there will be an appropriate period for comment, and then we’ll seek to put it into law. In respect to the penalties, that is to be worked on. They need to be commensurate with the issue that we’re trying to resolve here. As you know, it’s related to different issues but the Googles and the Facebooks have faced massive fines across the world, particularly Facebook, for breaches of privacy and the like.

SABRA LANE:

Many news outlets are struggling right now in the COVID-19 environment. Advertising has dried up, companies have shut down and some newspapers, some of them might be permanent. The Government announced a $50 million package last week to help them. But you won’t be able to save all of those papers and all of those jobs, will you?

JOSH FRYDENBERG:

You clearly can’t save all papers and all jobs and we have a market that needs to operate. We’re not seeking to protect traditional media businesses from the rigor of competition or the rigors of new technologies. What we’re seeking to do here is ensure a level playing field and a regulatory framework that is fit for purpose. As you say, Spain and indeed France and others have tried to go down the path of requiring payment for content by these digital platforms, but without success. But we’re absolutely focused on doing so.

SABRA LANE:

Treasurer, thanks for your time.

JOSH FRYDENBERG:

Good to be with you.