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52G Revenue test

For the purpose of paragraph 52E(1)(d), the requirement is that the applicant corporation’s annual revenue, as set out in its annual accounts prepared in accordance with generally accepted accounting principles, exceeds {$150,000}:

(a) for the most recent year for which there are such accounts; or

(b) for at least 3 of the 5 most recent years for which there are such accounts.

There it is.

Plain as day.

52C Treasurer may make designation determination

…(2) In making the determination, the Treasurer must consider whether there is a significant bargaining imbalance between Australian news providers and the group comprised of the corporation and all of its related bodies corporate.

What stands out to you in the above section?

For me, it’s a ‘significant bargaining imbalance‘.

The Treasurer must consider whether there is a significant bargaining imbalance between Australian news providers on one hand and essentially Facebook & Google on the other hand.

Let’s look up the definition of significant bargaining imbalance in the list of definitions at the start of the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020 (view here), firstly under b for bargaining and then we’ll try s for significant, just in case b doesn’t give us the clarity we seek.

bargaining issues has the meaning given by section 52ZA

bargaining news business corporation, for a registered news business, has the meaning given by section 52X

bargaining parties has the meaning given by section 52ZA

Notice there is no entry for bargaining imbalance.

And under s there is only one entry:

SBS  means the Special Broadcasting Service Corporation

There is no definition in the Bill for either ‘bargaining imbalance‘ or ‘significant bargaining imbalance‘.

Let’s continue by looking at the next sentence in 52C, part (3) below:

52C Treasurer may make designation determination

…(2) In making the determination, the Treasurer must consider whether there is a significant bargaining imbalance between Australian news providers and the group comprised of the corporation and all of its related bodies corporate.

(3) The determination is not invalid merely because of a failure by the Treasurer to comply with subsection (2).

If the Treasurer doesn’t need to consider whether there’s a bargaining imbalance between Australian news providers and Google & Facebook, why is this Bill being proposed?

In the exposure draft explanatory materials accompanying the Bill the following is stated at section 1.5 (View here):

While bargaining power imbalances exist in many other contexts, intervention is necessary to address the bargaining power imbalance because of the public benefit provided by the production and dissemination of news and the importance of a strong independent media in a well-functioning democracy.

Let’s slow this down.

Production and dissemination of news is important. Agree

There is a public benefit in the production and dissemination of news. Agree

A strong and independent media is important. Agree

A well functioning democracy is important. Agree

A strong and independent media is important to a well functioning democracy. Agree

Where is there a significant bargaining imbalance?

Are we any closer to a definition for significant bargaining imbalance?

Not really.

Did you notice there was a definition for bargaining issues above?

bargaining issues has the meaning given by section 52ZA

Let’s see what section 52ZA says regarding bargaining issues:

52ZA Bargaining parties, bargaining issues and represented registered news businesses

…(2) The bargaining issues are the specified issues in the notification (as mentioned in paragraph 52Y(4)(e)).

Now we need to look at section 52Y (4) (e):

52Y Notification of bargaining

…(4)..(e) the specified issues mentioned in subsection (1);

And what does it say in subsection (1)?:

52Y Notification of bargaining

(1) The bargaining news business…may notify a responsible digital platform corporation for a digital platform service that it wishes to bargain over one or more specified issues relating to the registered news buisness covered news content made available by the digital platform service.

News Corp Australia may notify Google or Facebook it wants to bargain over an issue with News Corp Australia news content being shown on Google or Facebook.

Did we need to go on a goose chase?

Bargaining issue: When a news business isn’t happy about something to do with a news story it has chosen to show on Google or Facebook.

Here’s an example of news content provided by News Corp Australia to Google (from page 228 here):

ACCC news snippet example

Note: the main difference with the example above compared with a normal search is the text has been chosen by Google from the page, not directly from the meta description on the page. Here’s an example of how to make the search result only show the meta description of the page (view here).

It’s just a search result.

Let’s try the same search now.

The search below is from 25 August 2020 (ABC is in position 3 in the search result).

query

sydney dust storm search

What do we see?

Search results as we would expect.

What does the ACCC see?

Submissions assert that Google’s practice of extracting content from news articles produced by a media business and republishing that content on its search results in the form of a snippet has the effect of reducing referral traffic to the media business’ website

When a consumer searches for ‘Sydney dust storm’ on google, which is free, they see a list of different search results.

If news businesses want their news articles to feature more prominently on Google or Facebook, then the way to do that is advertise on the platforms, just like everyone else.

The following is from the Digital Platforms Inquiry final report (page 229, view here) under the section heading, 5.3.1 Imbalance of bargaining power:

As snippets are generated automatically, it is ultimately Google that controls the length and content of snippets. The only control media businesses have over snippets is the ability to opt out. Accordingly, media businesses can only choose whether they want snippets to appear in conjunction with a hyperlink to their news content and cannot control the length or substance of the snippet.

The emphasis in bold above was done by me.

This is what it looks like on the admin side while writing this (& been the same view for many years):

I’ve seen enough.

I’d vote against this Bill.

Disclaimer: I’m not a lawyer & the content above is not advice.

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