Australia’s laws may be vanguard of Facebook news content reform
• The social networking service is keen to claim a win with a ‘get-out clause’ after the government makes late changes to legislation
The architect of Australian media reforms being watched around the world claimed victory on Wednesday, even as critics said concessions to the laws forcing Big Tech to pay for news content have given Facebook and Google a get-out clause.
The Australian government made late changes to the laws after Facebook blocked news content in Australia last week, escalating a dispute over the proposed legislation and catching international attention.
The amended legislation is expected to pass the Australian Senate this week, despite opposition from minor opposition parties and independent politicians who argue it disadvantages smaller news companies.
Rod Sims, the chair of the Australian Competition and Consumer Commission (ACCC), said the bargaining power imbalance he was tasked with correcting had been addressed.
“The changes the government’s done are things that either don’t matter much or are just to clarify things that, at least in Facebook’s mind, were unclear,” said Sims, who led the drafting of the legislation. “Whatever they say, they need news. It keeps people on their platform longer, they make more money.”
With Australia’s reforms serving as a model for other nations to adopt, Facebook was also keen to claim a win.
Facebook vice-president of Global News Partnerships Campbell Brown said the firm has retained the ability to decide if news appears on its platform and can sidestep the forced negotiation for content payment under the original legislation.
In a key amendment to the legislation, Australian treasurer Josh Frydenberg was given the discretion to decide that either Facebook or Google need not be subject to the code, if they make a “significant contribution to the sustainability of the Australian news industry”.
COMMERCIAL DEAL
The original legislation required Facebook and Alphabet’s Google to submit to arbitration if they could not reach a commercial deal with Australian news companies for their content, effectively allowing the government to set a price.
Facebook, which contends news accounts for just 4% of traffic on its site in Australia, said it would restore news on Australian pages in the coming days.
“This isn’t a must-carry regime,” said Sims. “We never said we’re forcing Facebook to keep showing news.”
While the Senate is expected to pass the legislation, with the main opposition Labour party supporting the ruling Liberal Party, some politicians and media firms have expressed concern about the amendments.
“This changes the bill significantly,” independent senator Rex Patrick, who plans to vote against the amended bill, said. “The big players could successfully negotiate with Facebook or Google. The minister then doesn’t designate them, and all the little players miss out.”
Lee O’Connor, owner and editor of regional newspaper The Coonamble Times, agreed the amendments favoured big media groups. “It’s the vagueness of the language that’s the main concern, and the minister’s discretion is part of that,” O’Connor said.
Frydenberg has said he will give Facebook and Google time to strike deals with Australian media companies before deciding whether to enforce his new powers.
The code was designed by the government and competition regulator to address a power imbalance between the social media giants and publishers when negotiating payment for news content displayed on the tech firms’ sites.
After first threatening to withdraw its search engine from Australia, Google has instead struck a series of deals with
TREASURER GIVEN DISCRETION TO DECIDE THAT EITHER FACEBOOK OR GOOGLE NEED NOT BE SUBJECT TO CODE
several publishers, including a global news deal with News Corporation.
Television broadcaster and newspaper publisher Seven
West Media said on Tuesday it had signed a letter of intent to reach a content supply deal with Facebook within 60 days.
Rival Nine Entertainment also revealed on Wednesday that it is in negotiations with Facebook. “At this stage, we’re still obviously proceeding with negotiations,” Nine CEO Hugh
Marks told analysts at a company briefing on Wednesday. “It is really positive for our business and positive particularly for the publishing business.”
For fund manager Katie Potts, setting mandatory quotas for women on corporate boards of technology start-ups is a bad idea. Not because she’s against diversity, but because she says there just aren’t enough suitable candidates.
“There are simply not enough experienced women in the sector and of suitable calibre to fill a third of board posts” in the smaller tech company space, the founder of UK-based Herald Investment Trust said in the company’s annual financial report on Tuesday. Many startups also struggle to compete for talent against bigger companies such as Alphabet, Apple and Facebook, she said.
Small software and tech companies make up a bulk of Herald’s holdings, and her funds will be “pragmatic” when voting on mandatory quotas and “overly burdensome” regulations, Potts said, citing “instances of unsuitable candidates being appointed and doing damage”.
Potts’s comments put her at odds with the growing push for more gender and racial diversity in corporate suites, with such metrics drawing greater scrutiny from regulators and investors alike. Last week, Norway’s sovereign wealth fund, the world’s biggest, urged companies it invests in with boards where either gender has less than 30% representation to set targets to address the issue.
In an interview, Potts elaborated on the challenges faced by smaller companies in complying with some of the gender-equality requirements.
“It’s a nuanced issue in which we want the most suitable candidate to fill the position,” she said. “In this case, especially for smaller companies already battling bigger companies for the best candidates, it’s not easy to find good non-execs.”
Board positions also tend to be taken up by people towards the end of their careers, most of whom are men, Potts said, adding that this may shift in the next generation.
For Potts, increased regulation on such fronts has meant companies spend more time demonstrating compliance, which she and the fund managers at her firm find frustrating. Herald prefers to work on a case-by-case basis with the management at companies it invests in on environmental, social and governance (ESG) concerns rather than a practice she calls “box ticking”.
Investment strategies adhering to ESG criteria have boomed over the past year.
Demand for climate-focused exchange-traded funds (ETFs) is at a record high and accelerating thanks to favourable policies, with global inflows tripling to $89bn in 2020, according to a Bloomberg Intelligence report..
Potts acknowledged the pressure on companies to comply with ESG metrics.
Momentum has picked up with movements such as the Extinction Rebellion, which began in the UK in 2018 and staged protests against environmental degradation and the threat it poses to social collapse.
“I recognise the aims of the Extinction Rebellion demonstrators sleeping in the street in which I live, but I arrogantly believe that we at Herald have done and will do far more to help alleviate global warming through appropriate investment of primary capital in emerging technologies,” she said in the annual report.
‘THERE ARE SIMPLY NOT ENOUGH EXPERIENCED WOMEN FOR A THIRD OF BOARD POSTS’