Inside Story

Publishers, platforms and policy détente

As the implications of the ACCC’s recommendations on digital platforms continue to unfold, the political challenges aren’t getting any easier

James Meese 20 February 2020 1330 words

In the eye of the beholder? ACCC chair Rod Sims. Joel Carrett/AAP Image

After a difficult few years, multinational technology companies began 2020 on a cautiously upbeat note. Although the federal government accepted many of the recommendations of the Australian Competition and Consumer Commission’s digital platforms inquiry just before Christmas, its main act so far has been to establish further reviews (as part of a broader “implementation roadmap”) and extend the initial inquiry for five years.

This response — criticised for essentially kicking the can down the road — says a lot about the complicated politics surrounding the ACCC’s forthright assessment of the digital environment.

The ACCC inquiry emerged from the horse-trading in the lead-up to the relaxation of Australia’s media ownership laws in 2017. The context meant that many industry participants assumed the ACCC would focus on the regulatory and commercial imbalances between news publishers and multinational platforms.

Industry events during the inquiry tended to reflect that view. ACCC chair Rod Sims and deputy chair Delia Rickard made frequent speeches critiquing the business practices of the digital platforms and their reluctance to embrace regulation. Encouraged by these public statements, the media industry expected substantive recommendations supporting their commercial interests.

But from the beginning there were signs that the ACCC interpreted its role more broadly. As Sims explained in a November 2017 speech, the commission mainly intended to investigate the state of competition in online media markets and assess whether online consumers were protected from an over-concentration of operators.

This difference in approach can partly be explained by the ACCC’s statutory focus on competition and consumer issues and partly by the breadth of the inquiry’s terms of reference, which didn’t so much ask “How can we save journalism?” as “How is money made through digital media and who benefits?” So, while the inquiry continued to commission studies on news media, the ACCC had less and less to say about journalism as it went on.

The final report makes it clear that the ACCC will not save journalism. Few of its recommendations offer direct panaceas, with the most practical one requiring digital platforms and news publishers to establish a voluntary code of conduct. The government accepted this recommendation and has asked the ACCC to begin negotiations with the major players. And the implementation process has teeth, with government stating that a mandatory code will be imposed on parties if a voluntary code can’t be finalised by October 2020.

The other recommendations targeting journalism are not substantially innovative, essentially asking the government to keep funding public broadcasting and maintain its grants package supporting small and regional publishers. The future of commercial news media looks like it will be decided by market forces and private ordering through a co-regulatory approach.

With the future of public interest journalism at stake, this limited intervention could be viewed as a worrying sign. But Australia already has important measures in place. Faced with the economic collapse of digital journalism and the emergence of regional news deserts, media industry commentators in the United States have been calling for the creation of national public service media organisations. Here, governments created the ABC and SBS many decades ago.

It is also important to note that the state of the news media might be a sign of transformation rather than death. New entrants include the Saturday Paper, and Crikey launched a team of investigative journalists (Crikey Inq) last year. Social news outlets such as Junkee have matured, and international organisations like the Guardian and the New York Times are investing significant resources in local editions.

This is not to play down the fact that the Australian media market faces major challenges. But these new outlets are positive signs of market innovation and transformation. Newer entrants are no longer attempting to copy the mass media format of the past, instead providing niche news offerings that target specific demographics. They are also lightly staffed. Junkee has about sixty employees and the Guardian Australia around fifty. The news media may become a smaller business but one that is more focused on the core role of public interest journalism.

So, while the ACCC’s final report criticises digital platforms extensively, its recommendations represent only small wins for news organisations. The ACCC has largely focused on the risks associated with digital platforms — concentrated online markets, a lack of competition in online advertising, and privacy concerns — and proposes a range of reforms in response, encompassing proposed wholesale reforms of media policy and privacy law and amendments relating to copyright enforcement and mergers.

This is an incredibly important outcome for the public, but the ACCC’s focus means that no stakeholders are wildly enthusiastic. Indeed, the submissions to Treasury as part of the final consultation process reveal that both the platforms and the publishers are trying to apply some brakes to the policy process. The platforms have continued their push against the threat of regulatory burdens, and the publishers now realise that the ACCC was never completely in their corner.

An ongoing review of media regulation means that newspapers must once again justify the self-regulation of the press in an age of convergent media. Publishers have never been strong supporters of privacy law reforms and are especially hostile to the oft-raised proposal to introduce a statutory right to privacy.

Although various ministers have said that Australia won’t be afraid to regulate the platforms as required, the ACCC has given the federal government a difficult hand to play by sketching out major reforms across multiple domains. The government has taken bold steps in some areas, asking the ACCC to launch a further inquiry into the ad-tech sector, which Google dominates, and ensuring that a code of conduct between publishers and platforms is implemented. But action on most recommendations has been delayed subject to further consultation.

This policy détente is perhaps no surprise. The media and content industries have never been afraid to criticise ministers and policymakers when reforms to privacy, copyright or media regulation have been canvassed, and technology companies are learning to become formidable lobbyists outside Washington, D.C. During the debate about whether they should be forced to reveal the contents of encrypted messages, tech companies appeared uncertain about how to navigate Australian politics, but that seemed to change, with the Saturday Paper reporting that that senior executives from the United States were present in Canberra during the final lobbying push.

Australia can’t avoid reforms in the way it regulates these technologies. But the Coalition can buy itself time while it takes stock of the changing landscape. The extension of the original inquiry for a further five years forms part of this broader strategy.

The reaction to some of the ACCC’s key recommendations also points to one of the stranger outcomes of the inquiry. Platforms and publishers are largely opposing parties and will continue to clash over any proposed amendments to copyright and merger laws. But their interests may converge around privacy law and media regulation. Privacy reforms would be seen as a threat to the data-based business models of platforms and the investigatory capacities of the news media and both parties would push back strongly against media reforms that increase their regulatory burdens. But change in both of these areas is needed, with Australians now stuck with complicated and increasingly dated regulatory frameworks.

With both groups of commercial stakeholders starting to resist reform in certain areas, it is understandable that new legislation hasn’t been forthcoming. Australia had a chance to lead the world in the implementation of major policy frameworks responding to the new digital environment. Instead, the government has taken a gradual approach. This should allow it to carefully navigate the concerns of commercial actors, stay informed through the ongoing ACCC reviews and follow international regulatory trends. At a certain point, though, it will have to abandon its caution and take a stance. Consultation can only take the government so far, and at certain points the intersecting agendas of platforms and publishers may work directly against the prospect of much-needed regulatory reform. •