[Vishwaroop is a student at Rajiv Gandhi National University of Law.]
Recently, the Ministry of Information and Broadcasting in India has started to take interest in laws that regulate tech giants such as Facebook and Google to make them pay compensation for news publication to the media companies. The importance of the law is that it essentially tries to establish even grounds between tech and media companies. These laws will safeguard the rights to monetary compensation of media companies from big tech as they hold great power to attract users and generate revenue from the content created by the media businesses.
In 2021, Australia became a pioneer of these “bargaining code” laws when the Australian Competition and Consumer Commission (ACCC) introduced The Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) to the world. According to ACCC, the decline in revenue of journalistic businesses have arisen out of tech giants' unruly power of online platforms that restrict the monetary pipeline. Since the tech giants rule the internet, there was a power imbalance between the two parties, making the ACCC consider regulatory intervention as the two sectors failed to come to a deal to efficiently address these issues. The media companies failed to receive adequate compensation which led to a drastic decline in journalism, especially in local news levels. Following Australia, other major countries like Canada have also adopted a similar approach to Australia's bargaining code. Now India is considering to follow these precedents to establish its own laws that harmonize between the tech and media industries.
In this article, we will take a look at how these laws govern and the importance of it in the digital age, how India can best incorporate them into its legal system and the challenges it is poised with.
Understanding the Bargaining Codes: How Do They Work?
We can take a look at the implementation of the bargaining codes in Australia to explore how they function.
It is important to understand first that the genesis of these laws lies in competition law and not in copyright law. The ACCC first designates online platforms that have significant leverage over media businesses. The bargaining code designates digital platform corporations having significant market power in Australia which negotiate with registered news business corporations. The code presumes that these designated tech companies will commercially contribute to the sustainability of public interest journalism, and to the costs of addressing long-standing regulatory asymmetries of which they are principal beneficiaries. Here are the key takeaways from the Australian legislation:
The bargaining code mandates that accountable digital platform businesses and registered news business corporations that wish to negotiate under its conditions do so in good faith. When parties are unable to negotiate on the compensation to be paid for ensuring covered content on designated digital platform services, compulsory arbitration becomes mandatory, and an arbitral panel selects the most favourable proposal from each party.
Digital platform firms must also notify registered news enterprises in advance of any changes that would have a major impact on covered news content. Additionally, non-differentiation standards are in place to prevent digital platform corporations from taking different stances towards news organisations that are code participants, those that do not sign up for the code, or those that hold another non-participating status.
Contracting out arrangements are recognised in the code because it is accepted that a digital platform corporation may enter into what is essentially a commercial agreement (outside the code) with a news business over remuneration or other issues. Parties that conclude such an agreement and notify the ACCC of the agreement are then disregarded from the general requirements and compulsory arbitration, as well as the bargaining rules they would otherwise be subject to if their bargaining conduct were subject to the code.
Similar laws in Canada known as Online News Act have come in force with a similar approach to achieve a fair compensation between tech and media industries. The USA also proposed the Journalism Competition and Preservation Bill in 2022 but it failed to pass the senate. Meanwhile, countries like Brazil, the UK and South Africa have been discussing how to approach their own version of the bargaining codes.
Reaction from the Tech Industry
These laws are made primarily to target the tech giants Google and Facebook. These companies hold the upper hand when it comes to publishing news online as they have facilities to store large amounts of data and target users specifically to reach a wider audience. However, Facebook shared a negative reaction towards the bargaining code, whereas Google has shared a mixed response to the same.
It is pertinent to note that both Google and Facebook are not designated by the ACCC. On paper, the bargaining code is basically in the non-operation stage as there are no designated companies on the list. That is, however, not the case, in 2022, it was reported that a deal worth USD 140 million was struck between the powerful tech giants and the news organisations. This deal meant that the given amount would be injected into Australian journalism each year. According to ACCC, this deal surpassed their expectations from the bargaining code. The bargaining code, though non-operational has already started to seed results.
This deal took a drastic turn in early 2024 when Facebook announced that they would not continue with the deal and would shut down news publication altogether from their platform. Meta has officially announced that the reason behind their actions is the low number of users that access Facebook news. It is speculated that the actual reason for the shutdown is the bargaining code itself.
Initially, online platforms such as YouTube, TikTok, X (formerly Twitter) and etc. have not been under purview of ACCC. It was considered that Tiktok and X do not have sufficient market power such as Facebook or Google, nor do they have enough dedicated news publications. However, it could be soon that X and TikTok come under the ambit of ACCC. YouTube (whose parent company is Google) has already been sharing revenues with the news publishers on their platform and hence they do not come under the ambit of the bargaining code.
Bargaining Codes in India: Challenges and Suggestions
It is relevant to point out that the ACCC’s Indian counterpart the Competition Competition of India (CCI) still has not mentioned or proposed for bargaining codes. As of now it is the Ministry of Information and Broadcasting that has been looking into this very subject. The CCI has nevertheless already set legal precedent to acknowledge the power imbalance. In the case of Digital News Publishers Association v. Alphabet Inc. and Others, the CCI found Alphabet (the parent company of google) to violate Section (4)(2)a of the Competition Act 2022 as they held a dominant position over the market and did not compensate the news publishers with adequate revenue for publishing news content on their platforms. Thus, it is imperative for CCI to hold a firm hand over the power imbalance that exists between the two industries to make sure news publishers are fairly compensated.
It must be asserted that there is a dire need to safeguard quality journalistic media outlets in India from anti-competitive practices by the big tech. A thriving journalism industry is the very essence of democracy and essential for a functional society, as media affects all of us by moulding our public perception, holding accountable those in power, being the voice of the voiceless, protecting us from propaganda etc. and serving public welfare objectives. The journalism industry hence should be adequately defended against the tech industry, which fails to compensate them for the news content that is published on their platforms.
However, as beneficial as the bargaining codes may be for the country, they come with their fair share of challenges which must be addressed before being implemented in India.
The first challenge is to remunerate the small media companies. The criticism of ACCC’s bargaining code is that the deal primarily focuses on the big players and the smaller companies are left with peanuts. The first suggestion is to create a multi-tiered payment framework to ensure the same mistakes do not occur in India. The multi-tiered payment framework should guarantee a minimum payment amount that ensures the smaller companies are receiving a baseline payment as compensation. However, it is important to ensure that this baseline amount does not become the standard price for smaller companies and that deals are made in good faith is always ensured. Additionally, the tier system should be based on factors such as audience size, content outreach, company net worth, etc. This tiered system, based on multiple factors would help monitor the payment deals and preserve the interest of smaller companies and deter any competitive disadvantages.
The second challenge is transparency. The ACCC could not assess the benefits arising out of the USD 140 million payment deals. This is because of confidentiality of the agreements. Transparency of the agreements between the tech and media companies must be assessed to validate the payment amount is being used to help promote journalism and ensure it does not lead to irregular spending. There would be a possibility that the compensation amount may be misused, failing to support journalism as intended. Funds could be channeled to non-journalistic activities, undermining the code's purpose. Hence, the second suggestion is to create mandatory auditing reports that disclose the compensation amount and provide details on how the amount will be channeled back to the news media industry. This would create transparency and enable the Indian authorities to make sure the bargaining code is efficient in practice.
The third suggestion is to tackle the tech giant Facebook. The social media company serves as a significant news platform considering it has a large user base in India. The government must negotiate and compel the company to pay remuneration to the media companies. This can be done by imposing penalties on Facebook for non-compliances with substantial fines, advertisement limits, etc., to pressure not only Facebook but also other tech giants that are refusing to follow the bargaining code law.
Conclusion
The world has started to adapt to the digital age and its impact on journalism that has been diminishing its revenues. The tech goliaths that possess the upper hand in data storage and user attraction have been effective in swaying away users from news publications as they can access the news media conveniently on platforms such as Google and Facebook. While the Australian government has pioneered the legal framework that diminish the anti-competitive practices by tech companies against media houses and try to provide adequate monetary compensation, the deal comes with its own hurdles.
The disparity between small and big media companies must be addressed by a multitiered payment framework with a minimum payment amount that helps the small companies to receive at least a basic remuneration payment. Furthermore, transparency of the deals made by tech and media companies must be made mandatory to ensure the use of the amount for the greater good of journalism. Strict regulatory action against companies that fail to pay adequate compensation must be taken into consideration.
As India starts to ramp up its strategies in the tech v/s media battlefield, it is suggested to create a holistic approach that facilitates high-quality journalism in a functioning democracy and sway away the tech giants from overpowering the news media organisations. The bargaining code with recommended suggestions might just be the right decision.
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