Yesterday the Economic Development, Science and Innovation Select Committee heard submissions on the Fair Digital News Bargaining Bill. I made a written submission on the bill, which proposes a system under which New Zealand news organisations could negotiate with social media and search platforms for compensation for the use of news content. Here is my submission:
My name is Gavin Peter Ellis. I am a media researcher and consultant. I hold a doctorate in political studies and am an honorary research fellow at Koi Tū: Centre for Informed Futures at the University of Auckland. I have a background in news media stretching back more than fifty years.
I wish to make the following submission on the Fair Digital News Bargaining Bill.
The introduction of the Fair Digital News Bargaining Bill follows the adoption of measures by Australia and Canada to bring some balance to a playing field tipped on its end by the immense power of Alphabet (Google) and Meta (Facebook).
A Cabinet Paper on the New Zealand proposal stated: “The overwhelming feedback from the New Zealand media sector has been that in all respects of their commercial dealings with Google and Meta, news media organisations must accept ‘take in or leave it’ terms that are weighted in favour of the platforms. This inherently limits news media companies’ ability to negotiate about what is a fair return for their investment in news content.”
From my knowledge of the relationship between the platforms and New Zealand media, I would endorse this assessment but would add that there are some media entities with which the platforms simply refuse to engage. This is in spite of the fact that material produced and paid for by these entities is appropriated for use on the platforms.
The Cabinet paper also noted New Zealand companies had no ability to negotiate over issues such as changes to algorithms that affect the distribution of content. Since the paper was tabled, Facebook has, in fact, changed its algorithm affecting New Zealand news, resulting in a drop in page views across our news media.
The Bill proposes a bargaining code but there are alternatives that would be both more robust and would more accurately reflect the impact that search and social media platforms have had, and will continue to have, on vital news media services here.
Those alternatives include a levy on the New Zealand revenue of multinational digital platforms to produce a pool of funds to be distributed equitably to news media. A ring-fenced revenue tax would nullify the platforms’ profit-minimising strategies in selected jurisdictions, such as New Zealand.
I submit that the alternatives should be preferred above attempts to strengthen the bargaining position of New Zealand media, simply because the power imbalance between the parties is too great and no agreements will reflect the relative impact on each party.
Search and social media platforms have gained such power that anything less than an impost on their commercial activity is unlikely to benefit the diverse forms of New Zealand news media, either sufficiently or equitably.
At the core of the proposed law is a framework for negotiation between the digital platforms and news media entities. The framework sets out timelines on negotiation, mediation, and final offer arbitration if required. There are definitions of what types of digital platform would be captured by the legislation. Unlike the Australian law, where a government minister designates which platforms will be included, the New Zealand proposal (and the similar Canadian law) adopts a catch-all approach from which a platform could be exempted if it meets conditions showing it has already significantly benefitted the New Zealand news media sector.
These conditions appear to be subjective, and provide the means by which Alphabet and Meta could seek exemptions despite the fact that, relative to their levels of commercial activity in this country, their settlements have been minimal.
The Bill provides little or no redress for those companies that have already negotiated with the multinationals – from a position of weakness. The proposed law cannot be used to over-ride existing agreements between the digital platforms and New Zealand news media entities. Nor can it be used to renegotiate the terms of those agreements. The net effect of such provisions is to make the principal powers of the Bill a nullity in respect of some of our most significant media entities.
In my view, while the Bill has good intentions – making digital platforms pay for news content produced by others – it fails in providing adequate means for achieving that goal. Nor does it reflect in any way the need for a form of reparation. For years, these platforms have benefitted from content without payment and have decimated the business models of news producers performing civic and social functions that the platforms do not. They have both an obligation and the means to make reparations.
Neither goal will be met by a ‘bargaining framework’. Implicit in such an arrangement is good corporate citizenship but that has not always been evident in the actions of the platforms. When Canada passed its C-18 Law, Facebook responded by blocking Canadian news links, an act that Canadian Minister of Heritage, Pascale St-Onge, called “irresponsible and unreasonable”. A review of the Australian law after the first year of operation included a request that the Australian Competition and Consumer Commission investigate whether bargaining power imbalances still exist.
Nothing in the Bill relates to a newer threat to the ownership of news content. Generative AI depends on existing data from which to construct its new ‘realities’. A significant element of that data is found on the websites and in the archives of news media. Nothing in the Bill provides redress for news media for the ‘scraping’ of their content by AI engines, the most powerful of which are likely to be owned by the platforms at which the Bill is aimed. It is a serious omission, although I acknowledge it is one that may be redressed through other legislation.
The financial state of the New Zealand news media gives cause for serious concern. That state is due in no small part to the actions and attitudes of multinational digital platforms that are immensely powerful and immensely wealthy.
The only way in which that power and wealth can be met on anything approaching equal terms is to employ undeniable sovereign power – in this case, the right of an elected government to impose taxes on business activities within its jurisdiction.
I submit that the Bill should be rewritten to reflect such determination, or that it be replaced by a new Bill that does so. The result – a sovereign fund to sustain democratically and socially significant journalism – could be the difference between a healthy civic environment and democratic deficit.
