Google Giggle: Josh Frydenberg’s “world-first” media reform a hand-out to billionaire mates

by Michael West | Dec 4, 2022 | Business, Latest Posts

Josh Frydenberg’s “world-first” Media Code is a world-first joke lapped up by a sycophantic media enjoying secret cash payments from Google and Facebook. Michael West reports on the hype and the shameless Treasury review which endorses it.

Josh Frydenberg sallied forth with a fulsome pat on the back this week … for himself.

“The Coalition’s ‘world-first’ Media Bargaining Code was a ‘success’,” pronounced the former Treasurer. A success indeed; a terrific success for the Coalition’s media mates Rupert Murdoch, Peter Costello and Kerry Stokes.

To be fair to Josh, he was only repeating what was in the press. Josh’s “media reforms” had forced Google and Facebook to pay millions in cash (secretly) to Big Media. In return, the News Corp, Nine, Guardian Australia and so forth sang the praises of Josh’s “world-first”. Manufacturing consent is a breeze, you just have to pay people.  

This “official Treasury review” is an embarrassment to a once proud institution known for its rigorous analysis and political independence. Either the sharp minds of Treasury don’t know how the internet works or they are wilfully ignorant.

Moreover, the “official report” looks like it has been tampered with, its introductory page glossed up with the words “success”, “world-first” and “performed well”. The rest of this skimpy document touches on some of the problems with the Code but mostly misses the mark.

“We held our nerve, took on the digital giants, and won!” said Josh. No you didn’t, you got played by Rupert Murdoch in return for unctuous news coverage to make you look good, keep you in office.

A world-first joke

Josh’s heroes Margaret Thatcher and Ronald Reagan would be giggling in their graves. This Media Bargaining Code is corporate welfare for billionaires. Worse, it is secretive, anti-competitive, anti-innovation, a world-first joke.

For those who are not au fait with this “world-first”, here it is in dot-points:

  • Murdoch and Nine whined that Google and Facebook were “stealing our content”. (They weren’t; they don’t publish the content, they publish links to the content, free advertising.) 
  • Josh and co pull out all stops to force Google and Facebook to make cash payments to Big Media. All secret, no effective law or regulatory framework.
  • Big Media says it’s great.
  • Google, which had finally begun to pay some tax in Australia, then said forget that, we’ve been extorted.
  • Treasury issues Code review this week. 

A Thatcher or Reagan purist would espouse a policy with free markets, competition, innovation. The Code simply subsidises old media. There has been no “designation”, no “arbitration”, no transparency, no public interest outcome. Just corporate welfare.

And the three greatest challenges of media reform – delivering competition to the Big Media oligopoly, addressing the creeping menace of surveillance capitalism by digital giants Google and Facebook, and defamation reform, remain neglected.

The most ludicrous aspect of the Code, indeed the “official Treasury report”, is that its central proposition is false. That they unfairly steal content – balderdash. To quote the executive summary:

The News Media and Digital Platforms Mandatory Bargaining Code (the Code) aims to address bargaining power imbalances to ensure that digital platforms fairly remunerate news businesses for the content they generate, thereby helping to sustain public interest journalism in Australia.

Let’s get this straight. Google and Facebook don’t steal content. That’s Murdoch spin. They take a snippet, showcase the story for free, and provide a link to the story which takes the reader from Google to the media company’s website, whereupon the reader is often asked to sign up for content which is paywalled.

As for “helping to sustain public interest journalism in Australia”, the media companies don’t even have to spend this cash on journalism. They can spend it on executive bonuses, on Masterchef or Love Island.

And this brings us to the funny bit. What did Google and Facebook agree to do besides making cash payments to Murdoch, Stokes and Costello? They set up news services to showcase, again, even more, the content from the government’s media mates. 

Facebook’s strong Meghan Markle coverage

Even more begrudging than Google, Facebook set up a news page which at last count had just 11 stories on it; three of which were about Meghan Markle or the Princess of Wales’s decision to wear a plum-coloured suit. The rest had the public interest journalism value of an old sock. Nine, News, Daily Mail, Guardian featured.

Facebook has struck fewer deals than Google so its news offering is basically an “up-yours” to Josh. Not that you would know anyway because, as the Treasury report concedes, the whole thing is secret. Nobody knows who is paid, how much, and for what.

Turning to Google’s news offering Google News Showcase, the Murdoch content is paywalled anyway so News Corp has taken the cash and not provided its content anyway.

So what have we got on this Showcase? Here’s a taste of the mighty public interest journalism on offer.

A Google giggle

It changes every day as corporate media provides a three-story feed to Google. As of writing we see Rupert’s NT news with – shock horror – a croc story.

  • The Daily Tele: “How Matty Johns ended up with Joey’s grand final jersey”,
  • Sky News: “Putin falls down stairs, soils himself”,
  • a routine hatchet job on Brittany Higgins by The Australian,
  • a yarn from Neos Cosmos about some ancient artefacts being dug up at Thessaloniki train station in Greece.

Google News Showcase

The Phillip Island Advertiser was leading with “Tenpin bowling scores” and MumaMia had strong public interest journalism coverage of “The ten best new shows to watch in December”.

Can we believe it’s… December?

What the hell.

The malls are packed, the parties are planned, and Mariah is playing out of every speaker, but if you find yourself with some free time in amongst all the festivities, there’s also a lot of television to sink your teeth into.

Loath as we are to demean the athletic achievements of Division 2 winners Jennie-Ann Sciore and Gail Marsh in the Phillip Island Ten Pin Bowling competition, it’s public interest journalism value is minimal.

The Treasury Review continues:

The News Media and Digital Platforms Mandatory Bargaining Code (the Code) was a world-first initiative and, as such, its prospects were uncertain when it took effect on 3 March 2021. 

Looking back at its first year of operation, it is reasonable to conclude that the Code has been a success to date. 

Reasonable to conclude? Even though the deals were done in secret, the bulk of the money went to government media mates, there is no arbitration mechanism to formalise the payments, who gets them or why?

Over 30 commercial agreements between digital platforms (Google and Meta) and a cross-section of Australian news businesses have been struck, agreements that were highly unlikely to have been made without the Code. 

The agreements were governed by confidentiality clauses and were not provided to the review by digital platforms or the relevant news businesses. 

While some stakeholders raised concerns about the Code’s impact on competition and media diversity, the objective of the Code is to address bargaining power imbalances so as to ensure news businesses receive fair remuneration from digital platforms for the value their content generates.

No, selected news businesses which the government favours. Those with the influence or muscle to complain loudly enough, also those with a penchant for “grants-getting” such as Crikey, New Daily, Swartz Media, The Conversation.

It is not designed to redistribute resources across the news sector or to guarantee that all news businesses receive funding. Other policy and funding tools are available to achieve these objectives. 

Other funding tools like what?

The review received several proposals for amending the criteria for designating digital platforms but considered they would have negative consequences. The review finds that the Code lacks a formal mechanism to extend the Code to other platforms. 

Without “designation” and a mechanism for arbitrating disputes – indeed without any formal and transparent process to determine the cash payments, there is no functioning law or policy. As one Google insider confided to MWM, it’s more of a protection racket than a policy or reform.

Although Treasury labelled the Code a success, it admits in the body of the report that it’s not really a law, just a bunch of secret deals designed to funnel money from the platforms to those with enough muscle or enough grovel to demand it.

To address this, the review suggests the Government consider directing the Australian Competition and Consumer Commission (ACCC) to prepare reports on this question. 

Let’s have some more reports; maybe from the ACCC which itself is part of the problem here, failing (wilfully?) to understand the market and the competition aspects. 

The review further suggests that the Government consider the need for additional ACCC information-gathering powers in the context of its response to the ACCC’s recent proposed major reforms in relation to digital platforms, including on agreements between platforms and news businesses. 

That would be a start.

The review considered the Code’s registration criteria and found that there was not a sufficiently strong case to amend them at this point in time. Registration outcomes should be closely monitored to ensure that the criteria are operating as intended.

That would be a cop-out.

The Government should consider reviewing the Code again after 4 years of its operation.

Why not have another review in four years’ time? Four years!

Where agreement cannot be reached, it sets out an arbitration process to determine remuneration payable by a digital platform.

What arbitration process? There is none. Google and Facebook – threatened by government with designation and arbitration – simply paid a bunch of cash to Josh media mates.

Even Twiggy got some

Even Twiggy Forrest got some: 

We understand that Google has reached 23 commercial agreements.9 It continued to negotiate agreements after the commencement of the review, reaching an agreement with Minderoo Foundation on behalf of 24 publishers on 31 May 2022.

Meta submitted that it has reached commercial agreements with 13 news businesses, but did not provide a list of these agreements.

To be fair to Josh, Labor voted for this joke of a reform too, as did most of the Cross Bench. They were all snowed, cowed by the corporate media. The lot of them. As for the coverage this week in Nine, News and Guardian, it shows that if you pay people off they will fall into line.

The result is that tax dodgers Google Australia, which had finally begun to pay tax in Australia on its billions in income and profits, simply stopped last year, despite rising income. Why would they? They’ve been extorted. And in any case they can claim the costs of paying Josh’s media mates as a tax deduction.

As for media, the reform entrenches the domination of corporate media to the detriment of smaller independent players.

Editor’s Note: MWM did not apply to Google or Facebook for funding under the Code. We did chat with them on background and were told – like other independents such as Renew Economy – “it’s not meant for you”.

Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.

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