Business of News

Five competition ministers discuss regulating Big Tech

May 14, 2021

Regulating big tech has become a global preoccupation; how such regulation might affect journalism is less clear. A couple of months after the controversial Australian News Media and Digital Platform Bargaining Code came into force, requiring Google and Facebook to pay for news in the country, competition ministers around the world are considering whether to adapt it and adopt it at home. 

In the past, European governments have tried to use copyright law to get Google and Facebook to pay for news; they are continuing down that route with the recent European Copyright Directive

At a recent webinar for Columbia University, five competition ministers discussed their plans. Andreas Mundt, president of Germany’s Federal Cartel Office, reported that Germany is implementing legislation as required by the European Copyright Directive, which is likely to help publishers. In France, there have been long standing battles over copyright, but news outlets are now finally starting to negotiate with Google as France implements its national legislation.

Australia did not use copyright law in its efforts to get Google and Facebook to pay for news. Instead, it used competition law on the grounds that there is a dramatic power imbalance between Google and Facebook and news outlets. Accordingly, the code says that if the two sides cannot agree on a price, then they must go into “final offer arbitration.” Also known as “Baseball Arbitration,” this kind of arbitration—used widely in Australia—is lauded as a way of getting unequal parties to come together quickly. Soon after the Australian law was passed, Canada said it would emulate it; South Africa is interested, too. 

Among the panel, there was consensus that Google and Facebook have become too powerful and that journalism needs financial help, but government officials made it clear that they will take a number of approaches to the thorny question of getting big tech to help pay for news and enforcement of competition law will not be the primary approach. Below are some (edited and condensed) highlights from their comments:

Rod Sims, chair of the Australian Competition & Consumer Commission and the architect of the Australian Code, responded to criticisms that the law will benefit large outlets owned by media mogul Rupert Murdoch, as they dominate market share in Australia:

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“Under the code you will largely benefit in proportion to your contribution to journalism now. That is, you get paid roughly in proportion to the number of journalists you have, so it’s quite true that the larger companies will get more money than the smaller companies. That’s because the objective is to allow a proper commercial deal for content that’s now being produced.” But he added that the code is only one part of a suite of measures to support journalism. 

In 2020, the government gave 107 regional broadcasters and publishers $50 million of extra support, and philanthropists saved Newswire Australian Associated Press (AAP) from going under because they know that wire services are a source of quality information used by a range of outlets.

He also replied to criticism from the activist media group Free Press, which has called for a tax on microtargeting with the funds raised to be used for news: “If you want to fund journalism, proper fiscal policy says that you design an efficient tax system, you raise the money in the most efficient way, and then you allocate it in the best way, and, in my view, you’d allocate some of it to journalism. What you don’t want is a system where you say ‘what’s my need, where will I find someone to go and tax?’ You’ll just have a mess of a fiscal policy and a mess of a tax system.” 

“Google and Facebook have to pay their fair share of taxes. There’s a lot of work going on internationally to contribute to general revenue, to make sure Google and Facebook pay their taxes and make their full contribution. But once they’re paying appropriately for the journalism that they’re benefiting from, now their job is done. I would rely on government spending, funded generally, to support journalism. That’s what happens in Australia; the money to the ABC comes from the general taxpayer, the money on the newswire, the money we use to support particular local journalism, all comes from general taxation.”

Canada has already pledged to follow Australia’s example. Owen Ripley from Canadian Heritage said discussions are underway and focused on “a made-in-Canada” approach. “Our institutions and contexts are different. The Competition Bureau in Canada doesn’t have exactly the same kind of mandate that the ACCC has in the Australian context,” Ripley said. Canada has already taken other measures to help support independent journalism, including a C$595 million tax subsidy program.

“In Canada we have a model that has required certain companies to contribute to cultural policy objectives. In the broadcasting system,we require our cable and satellite companies to contribute to supporting the creation of Canadian programming. So we’re also thinking about a model whereby platforms could be required to make a contribution to supporting journalism.

Trying to fix an imbalance in the market could lead to different solutions rather than trying to support the production of the activity of journalism. So some of the things that we’re reflecting on in the Canadian context—having the benefit of watching this play out in France and Australia—are questions around value. Determining that value question is not easy in this context. 

We are also very preoccupied thinking about how to design a system that is inclusive of smaller local media outlets. Canada has two official languages; we have indigenous languages, we have regional communities, and you’ve certainly seen the community, local sector hit very hard in recent years. 

Finally, how do you design a system that is mindful of unintended consequences? We’re thinking about how to put in place a framework that doesn’t incentivize platforms to potentially change the way that consumers can access news.”

Andreas Mundt, President of Germany’s Federal Cartel Office said the Bundestag is now enacting legislation as required by the European Digital Single Market Directive and this is likely to help publishers. However, unlike Australia’s new media code, the German law does not require payment for the display of hyperlinks or short excerpts of press articles. 

 “Coming back to the Australian law and, more generally, to the efforts of various countries to ensure adequate payment for journalistic content on the internet, we need to take a careful look. It’s a game-changer for the internet, because for the first time ever—and I think this is why companies are so reluctant— we are breaking through this “everything’s for free” mentality on the internet. This is why you have to take such a careful look at regulation and how it is designed to make sure that everyone will benefit properly,” Mundt said.

 France is already implementing its national legislation as required by the European Directive, and after years of Google trying to avoid payments, the European Copyright Directive is already paying off for French publishers who—in January 2021— signed a deal with Google in which the company will now pay for the use of aggregated news content. The payment involved has not been made public, and the French competition authority is currently deciding whether to fine Google for breaching competition authority’s rules in negotiations with publishers last year. The fine could be as much as 10 percent of the company’s worldwide turnover. 

Isabelle de Silva, President of the French Competition Authority said she expects a decision soon. 

“One of the most difficult issues we’re debating is what is the fair price for press content when it appears in the platforms? The French law is more detailed than the directive. It says that, in some cases, the price can be zero, if the content has no value at all or if it appears in very few pages. The law says that high quality information of general interest could be a criteria for defining the price. It’s an important idea that maybe not all press content is worth the same because it doesn’t take the same amount of effort to produce it. 

Among other things, we will be looking at whether the negotiation has been fair. What were the criteria proposed by Google? Were they fair? Were they consistent with the law? The fact that Google had included an offer concerning Google’s showcase in the negotiation—was it compliant with our decision? Soon, we will have some concrete answers.” 

Now that the UK is out of the EU, the UK competition regulator Chief Executive, Andrea Coscelli, said the EU copyright directive won’t apply. But he noted that plans are well underway for a Digital Code of Conduct and that legislation is being drafted and an enforcement unit, the Digital Markets Unit, will be set up within the UK Competition Authority (CMA). Legislation is expected in 2022.

“We’re doing policy work literally at the moment on the imbalance in the relationship between publishers and platforms. The UK has lots of significant overlaps with Australia so I think it’s a very relevant data point for us. It’s a very important debate for democracy and we want to play our part.”

Tembinkosi Bonakele, South Africa’s Competition Commissioner, noted that South Africa has set up a Presidential Commission on the Fourth Industrial Revolution to look at the digital economy and promote economic opportunities. But he said the Australian regulation has been a wakeup call for South Africa. The government is now organizing discussions with South Africa media houses and —hopefully—tech companies to “explore developments in Australia and consider the way forward for South Africa on an equitable revenue sharing between Platforms and media companies.”

“The Australian intervention has had, definitely, an effect in the thinking here.” Bonakele said. “There is some momentum, and we’re likely to see some sort of negotiations. I hope that there could be some kind of a regulation around this. I think the issue of media diversity somewhat goes beyond your classic antitrust consents into the more broader public interest about diversity of opinion and news. So I would hope for a very specific regulatory intervention, and I think South Africa is capable of making such an intervention. I’m not saying it’s going to be easy. I think we have seen how powerful the platform companies are—certainly Australia is quite a well-established country, a mid-sized country, that we were all surprised by how the platforms were able to flex their muscle against such a powerful state. 

Regions such as Europe are very fortunate to be able to have the European Union that is able to regulate and intervene in a manner that is difficult to resist by anybody. Certainly if you look at the EU’s ability to impose fines; very few jurisdictions, certainly in developing countries, can do that. So I think that the solution, at least in the medium to long-term, lies in some kind of multilateral interventions. I think there is a lot of duplication of work, duplication of resources, and likely a multiplicity of approaches that is going to be unhelpful even to the companies themselves. 

Some coordination is needed. It’s difficult to identify who will do this, but I do think that the existing bodies—The United Nations Conference on Trade and Development (UNCTAD), the Organization for Economic Cooperation and Development (OECD)—should, be leading these discussions. We have sponsored a discussion within the African continent itself that we need to rethink how Africans look at digital markets, because it’s going to be very difficult for any African country alone to tackle these matters. 

It’s difficult to build institutions, but I think this is the time where institutions are demanded by the environment that we find ourselves in. I certainly think that the bigger authorities out there would appreciate that it’s not enough to resolve these matters internally, that these are global matters requiring global leadership.”

These comments are adapted from the recent webinar held by the Technology Media and Communications specialization at Columbia University’s School of International and Public Affairs. This webinar was co-hosted with the Centre for Media, Technology and Democracy at McGill University’s Max Bell School of Public Policy founded by Taylor Owen who co-moderated the session.


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––Lauren Harris

Dr. Anya Schiffrin is the director of the Technology Media and Communications specialization at Columbia University’s School of International and Public Affairs.