The news media bargaining code, a world-first in forcing digital platforms Google and Facebook to pay news publishers, may be bypassed.
Treasurer Josh Frydenberg really wants to see deals to be struck between the parties outside of the code.
But the flow of money will always be from the digital platforms to the publishers.
“Commercial negotiations that are conducted in good faith, we want those deals to be struck outside of the code,” he told a media briefing.
“And the word coming back to us is that there are deals that may be struck very soon between the parties.”
But if the digital platforms and the news media businesses are unable, or unwilling, to reach a commercial agreement then a final-offer arbitration model will take effect.
“And this final offer arbitration model will allow for what is called two-way value exchange,” says the treasurer.
“The money can only go one way, the money can only go from the digital platforms to the traditional news media businesses.
“But the arbiters need to take into account the benefits that traditional news media businesses get by having eyeballs on their product when they appear on Google and Facebook.”
Frydenberg describes the code legislation to be introduced to federal parliament today as a world-first, ensuring that the rules of the digital world mirror the rules of the physical world.
“The world is watching what happens here in Australia,” he says.
“That has been our intention all along, to ensure that the rules of the digital world mirror the rules of the physical world. And ultimately to sustain our media landscape here in Australia.”
News Corp Australasia executive chairman Michael Miller says he is more “focused on the outcome of negotiations than the code itself”.
A review by the competition regulator, the ACCC, found that there was an unequal bargaining position between the digital platforms and traditional news businesses.
For every $100 of digital ad spend, $53 goes to Google, $28 to Facebook and $19 to the rest.
The media code legislation, which won't go through parliament until next year, will be mandatory, required by law, but Frydenberg says the government has worked closely with all key stakeholders.
“There's been extensive consultation and discussion, including draft codes that have been shared and worked through,” he says.
Frydenberg and communications minister Paul Fletcher spoke to Google and Facebook to talk through the announcement before the code was made public.
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