New Aussie rules

We get the lowdown from Dan Stinton, the managing director of Guardian Australia, on why new media legislation matters.

At the end of February, the Australian parliament passed a law requiring big tech platforms to strike deals with local news publishers for curating their content. The new law, the so-called News Media and Digital Platforms Mandatory Bargaining Code, was the result of an 18-month long inquiry from Australia’s competition regulator, the ACCC. This found that companies such as Google and Facebook are the key gateway to the internet, with Google having a monthly audience of 20 million and Facebook of 18 million, which accounts for almost every adult Australian.

Inevitably there was push back, with Google initially saying it could pull its search engine from the country; Facebook temporarily blocked Australians from accessing news on its platform before relenting. However, after a series of amendments, the law passed and both platforms moved to strike deals with publishers.

This week The Current turns to Dan Stinton, the managing director of Guardian Australia, who explains why the new law is a potential game changer for publishers and platforms around the world. “The legislation is significant because it recognizes the many benefits that platforms receive from publishers, while correcting the power imbalance that currently prohibits publishers from receiving fair compensation for this benefit from platforms,” he says.

Stinton was a key figure in the discussions with the platforms ahead of the law being passed. This interview has been edited for brevity and clarity.

What did you want to achieve in your discussions with Google and Facebook?
News publisher content drives engagement on Google and Facebook properties. As the ACCC found, there is tremendous benefit in aggregating news and information, both as a huge well of attention to deliver advertising, but also in creating user trust in these platforms. The platforms’ use of publisher content goes well beyond fair use, with an increasing number of people simply consuming news on the platforms and never visiting a publisher website.

What else?
Google and Facebook collect troves of consumer data from consumer engagement with publisher content - both on their products but also from news publishers’ unavoidable use of platform tech on publisher websites. This data is used to power the platform’s respective targeted advertising businesses. Putting aside the significant privacy concerns from the harvesting of this data (and it’s worth noting that the ACCC has separate legal action against both Google and Facebook for misleading customers about its collection), it’s clear that audience data has immense value, and yet news publishers receive no compensation.

Were publishers getting a fair deal under the previous model?
As identified in the ACCC’s latest ad tech report, almost all news publishers use Google’s advertising technology to power their digital advertising. Every time you visit a publisher website, Google’s tech is responsible for many of the ads you see - yet we do not have a complete picture of the fees Google earns from its control of the digital advertising supply chain. This makes it impossible to know whether news publishers are getting a fair deal.

Could Australia’s new law set a precedent for how other countries regulate big tech?
Yes. Canada and the UK have already expressed interest in adopting a similar model to Australia, so I think the potential for this to form a global precedent is significant and this is the main reason why the platforms fought the legislation as hard as they did.

Can you elaborate?
Australia took a broad, competition approach to the digital platforms, seeking to rectify the market failure whereby publishers rely on platforms for traffic, yet compete with them for advertising, where Google and Facebook have a combined market share of 81 percent, according the ACCC. Other jurisdictions such as France and Spain have taken a narrower approach through copyright, which has resulted in much smaller payments for publishers, so I believe the Australian approach is much better.

Some may not see why this law is needed, arguing that Google and Facebook help publishers monetize their content. What’s your response to that?
There is a benefit that publishers receive from platform traffic, but the ACCC found that the aggregate benefit the platforms receive from publisher content is far greater.

Facebook’s initial decision to ban news links to articles on its platforms was later repealed. However, the Facebook experiment showed consumers turned to news apps directly. Mobile intelligence firm, Apptopia, reported that downloads of the ABC News app jumped from 1,000 a day to 15,000. What can publishers learn from this moment?
It’s clear that publishers are very reliant on the platforms for traffic, which is the whole point of the code legislation. Of course, we would all like to have much larger direct audiences, but I would argue that The Guardian is already doing quite well at that. Regardless, no doubt this will sharpen every publisher’s focus on growing our respective app audiences and newsletters, as well as other direct channels.

What challenges do you foresee for publishers in the near-medium future? Will the big platforms push to maintain the status quo?
The challenges are essentially the same, with the platforms still gaining market share of the digital advertising market from publishers, although the code mitigates this. Obviously, this means all publishers need to continue to grow reader revenue, but that doesn’t mean that we should cede all advertising to the platforms because they are able to utilize their market dominance.

The next thing we need to focus on is privacy regulation, with purpose limitations on how data can be collected and used. For example, Google shouldn’t be able to read your Gmail for the purpose of selling you targeted advertising on The Guardian, and nor should Facebook be able to read your Whatsapp messages to sell you advertising in the news feed. We need to put guardrails around this to stop the data arms race that is currently underway and allow smaller players a seat at the digital advertising table.

Mi3 reports that the news legislation is just the “thin edge of the wedge." The ACCC has more ambitious plans to regulate the digital ad market with six proposals designed to open up walled gardens. What is the likelihood of further regulation and what are the implications for the digital advertising industry?
This is worth a whole other article, but it’s very clear that more regulation is coming in privacy, ad tech, misinformation and taxation.