Australia’s News Bargaining Code : Can CCI Follow Suit

In 2019, the Australian Competition & Consumer Commission (ACCC) conducted an inquiry into the impact of digital search engines & social media platforms on competition in media and advertising services market, and published a report which showed the shift of classified advertising from print to online marketplaces and how digital platforms have impacted the economies of news production, by effectively capturing the attention of consumers away from traditional News-Houses.[1]

News-media houses generally operate in a two-sided market, wherein one side of the market is provided services for free or nominal fee, cross subsidised by the other side.[2] In the News-Media industry, the market participants on the two sides are advertisers and audience/readers. Audience simply want content, and advertisers want greater audience for highest reach, thus the cost incurred in production of news content is subsidised by the revenue from advertising paid.[3]

However, the arrival of the internet giants like Google and Facebook distorted this business model. News-media houses initially continued providing free content online, supported by banner ads or cross subsidised by their revenue from print sales. But the news-houses failed to sustain the losses from cross-subsidies for long and thus started charging subscription fees, which led to smaller online subscriber base, and thus advertisers started to migrate to these dedicated digital platforms.

Prima facie Google & FB provide different services to consumers as compared to news-media houses, as they are not per se involved in content creation or Journalism; rather they provide links to, and snippets of news media content. However, they also operate in a multi-sided model, selling advertising opportunities on their platform. With great volumes of user data at their disposal, these platforms can offer highly targeted or personalised advertising, thereby enhancing their attractiveness as advertisers, and thus compete with news-media houses in the advertising market, using their own content against them. This leads media houses to a dead lock situation as they rely on referral services from these platforms making them an unavoidable trading partner. However, if they continue to allow them to use their content, they would incur significant loss of revenue.

Competition Concerns-

Provided Google & FB’s substantial market power, huge resources, significant presence in related markets and opaque key algorithms, they have both the ability and incentive for self-preferencing their related businesses at the expense of other business users of the platform. They’re not only able to substantially lessen competition, but also “impact” the choice and diversity of news-media and advertising markets. Although the referral service provided to news-houses helps them reach larger audience, but this little assistance is outweighed by the loss of revenue in advertising market. The ACCC highlighted that for every 100$ of advertising revenue to the news-media, Google gets 53$, FB gets 28$ and the remaining is to be shared by all the media companies.[4] In the past decade, more than 106 local & regional newspapers in Australia have closed and total number of publications declined by 15%.[5]

It is believed by the Australian government that individual news businesses have a higher dependency on Google and FB referrals as compared to what these platforms have over individual media-business’s content, there exists a huge bargaining power imbalance due to which media-houses are not in a position to negotiate terms over the use of their content. Thus, these platforms abuse media-houses by imposing unfair and unilateral terms that are reflected in their revenue sharing model. If news-businesses are not adequately remunerated, it would disincentivise them from investing significant efforts and resources to research and produce original content. Risk of less reliable and lower quality news deteriorate the standard of journalism which is against consumer interest.

The News Media and Digital Platforms Mandatory Bargaining Code

Rapidly increasing antitrust suits against digital giants like Google, FB, Amazon etc. reflects that authorities across the globe have growing concerns regarding actual and potential repercussions of the conduct of digital platforms. The ACCC’s report added fuel to the burning debate about the role digital platforms play and the appropriate level of government intervention required to regulate them. Following that, in February 2021, Australia passed News Media and Digital Platforms Mandatory Bargaining Code,[6] that requires internet giants like Google and FB to negotiate with news-outlets to pay for their content or face arbitration. The law seeks to address the bargaining power imbalance between digital platforms and media houses, and ensure that they are fairly remunerated for the content they generate, through compulsory bilateral negotiations upon the amount to be paid for making available news content on platform services.[7] In case such negotiations fail, an independent arbitrator can set the said amount. The digital platforms are also required to inform about any changes in their algorithms that would impact their content aggregation. The law is currently targeted at FB and Google specifically, but it could be expanded to other platforms in future.

However, owing to serious opposition including several threats from these internet giants, the code was amended to avoid mandatory arbitration and provide that government would consider the contribution of these platforms to journalism, including commercial partnerships, before it decided to apply the code to them.

Taking a cue

Although, the Act is being criticized by some for intervening in significant aspects of commercial relationships between platforms and news-businesses, countries like UK and Canada, and the entire EU, have supported the enactment, and policymakers around the world have started to explore plausible methods to address similar competitive concerns in their respective jurisdictions, depending on their respective national policies and aggressiveness in scrutinising such conduct and issues they want to prioritise in their policies.

Following Australia’s new code, some media houses in India have already written to Google demanding remuneration. CCI may be interested in taking measures to correct such power imbalances, but the problem in bringing similar enactment is that, in India parties are not allowed to make settlements amongst themselves because the antitrust proceedings are considered to be in rem and not in personam. However, if the Competition (Amendment) Bill,[8] is passed, to include provisions allowing parties to settle proceedings in abuse of dominance and vertical restraint cases, we may also see such approach by CCI.

The author is a former CIRC intern. The views expressed are personal.

[1] Final Report, Digital Platforms Inquiry (2019), by Australian Competition and Consumer Commission, available at- []

[2] OECD report on “Market definition in multi-sided market” (2017) available at []

[3] Aberdeen Journals Limited v The Office of Fair Trading, Case No. 1009/1/1/02

[4] “Australia news code: What’s this row with Facebook and Google all about?” Published at BBC News, 18 February []

[5] Final Report, Digital Platforms Inquiry (2019), by Australian Competition and Consumer Commission, available at- []

[6] Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2021 [

[7] Explanatory Memorandum, NEWS MEDIA AND DIGITAL PLATFORMS MANDATORY BARGAINING CODE [;fileType=application%2Fpdf]

[8] Competition Amendment Bill (2020) []