The old news business model is broken: making Google and Facebook pay won’t save journalism

Posted on February 2, 2021 by particularkev

Amanda Lotz, Queensland University of Technology

The federal government is talking tough about making Google and Facebook pay Australian news businesses for linking to, or featuring, these publishers’ content.

The digital platforms have been talking equally tough. Facebook is threatening to remove Australian news stories and Google says it will shut off search to Australia if the government pushes ahead with its “mandatory bargaining code”.

The code is meant to help alleviate the revenue crisis facing news publishers. Over the past two decades they have made deep cuts to newsrooms. Scores of local print papers have become “digital only” or been shut down completely.

If legislated, the code will require the platforms to negotiate payments to news publishers, as well as disclose changes in algorithms affecting traffic to news sites.

But the code is unlikely to do much to fix the crisis faced by journalism in the internet age. It isn’t even a band-aid on the problem.

The traditional commercial news business model is broken beyond repair. If the government wants to save the social benefit of public-interest journalism, it must look elsewhere.

Newspapers didn’t sell news, but readers

To understand why the commercial news model is so broken, we first need to recognise what the primary business of commercial news media has been: attracting an audience that can be sold to advertisers.

Newspapers attracted readers with news and feature journalism that provided public value, but also information of interest such as weather forecasts, sports scores, stock prices, TV and radio guides and comics. Readers even sought out papers for their advertisements – in particular the “classifieds” for jobs, cars and real estate.

Before the internet the newspaper was the only place to access much of this information. This broad bundle of content attracted a wide range of readers, which the economics of newspapers – particularly the cost of producing the journalism – required.

Why the business model is broken

Internet technologies introduced two changes that have dismantled the newspaper business model.

They offered new and better ways to connect buyers and sellers, pulling advertiser spending away from newspapers. More than 70% of revenue for a typical daily newspaper came from advertising. Before 2000 print media attracted nearly 60% of Australian advertiser dollars, according to an analysis for the Australian Competition and Consumer Commission’s Digital Platforms Inquiry. By 2017 it was just 12%.

Australian advertising expenditure by media format and digital platform

Internet technologies also provided better ways to access the non-journalism information that had made the bundled paper valuable to a mass of readers.

Readers also now access news in many other places, through news apps, aggregators and social media feeds such as Twitter, Reddit, Apple News, Flipboard and many others, including Facebook and Google. Research by the University of Canberra’s News and Media Research Centre published in 2019 found just 30% of Australian news consumers accessed online news directly from news publishers’ websites.

The bargaining code doesn’t solve the main problem

If Google and Facebook are “to blame” for news publishers’ malaise, it is not in the way the bargaining code suggests. Separate from their linking to, or featuring, these publishers’ content, the digital platforms are just more effective vehicles for advertisers seeking to buy consumers’ attention. They serve ads based on consumer interests or in relation to a specific search.

The simple fact is news publishers’ core content is not that important to the platforms’ profitability.

Research by the Reuters Institute for the Study of Journalism during the 2019 UK general election – tracking 1,711 people aged 18-65 across mobile and desktop devices for six weeks – found news took up just 3% of their time online (about 16 minutes and 22 visits to news sites a week).

So if stories from Australian news outlets disappeared from Facebook or Google search results, it would barely make a scratch on their appeal to advertisers.

Save journalism, not commercial publishers

The Australian Competition and Consumer Commission’s Digital Platforms Inquiry has rightly noted the revenue crisis has crippled commercial provision of public-interest journalism “that performs a critical role in the effective functioning of democracy at all levels of government”.

But the core of the problem is that funding such journalism through advertising is no longer viable. Other solutions are needed – locally and nationally – to ensure its survival.

Commercial news organisations no longer offer value to advertisers. Instead of searching for ways to make an obsolete business solvent, efforts should focus on alternative ways to fund public-interest journalism.

More funding for independent public broadcasters is one solution, and incentives for philanthropic funding and non-profit journalism organisations are proving successful in other countries.

It’s a global problem. To solve the crisis in Australia will require focusing on the core problem and thinking bigger than a bargaining code.

For transparency, please note The Conversation has also made a submission to the Senate inquiry regarding the News Media and Digital Platforms Mandatory Bargaining Code.

Amanda Lotz, Professor of Media Studies, Queensland University of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

If Google does pull its search engine out of Australia, there are alternatives

Posted on February 2, 2021 by particularkev

Gianluca Demartini, The University of Queensland

The Australian government’s push to make Google pay news organisations for linking to their content has seen the search giant threaten to pull out of Australia.

Google Australia’s managing director Mel Silva said if the government’s proposal goes ahead, “we would have no real choice but to stop making Google Search available in Australia”.

Prime Minister Scott Morrison pushed back saying he won’t respond to “threats”. Even the Council of Small Business Organisations Australia says Google needs “strong and stringent” regulation because of its monopoly on searching the web.

What if Google pulls out?

Google’s proposal to make Google Search unavailable in Australia means we would need to search the web using other systems and tools. If this really happens, we could no longer go to google.com and google.com.au to search the web.

It is important to note that Google is not just web search. Google’s parent company Alphabet Inc also runs key web portals such as YouTube, and productivity tools such as Gmail, Google Calendar, Google Docs and Google Maps (which actually started in Australia). Those services are not going to be removed from the Australian market, even if web search does get pulled out.

Online advertising is another sector in which Google is the market leader and where it makes money. Pulling Google web search out from Australia does not mean businesses would no longer be able to advertise using Google’s services.

But with no Google Search here, those adverts would no longer appear ahead of any other search results and be visited by Australian users.

A Google Search result showing an ad for The Conversation ahead of any search results. — Google Search places paid advertising ahead of any search results.
Google.com/screenshot

Businesses would still be able to put their adverts on other Australian websites that use the Google Ads service.

The issue with this scenario is that Google’s key competitive advantage is the ability to access data from people using its search services. Pulling web search out from the Australian market would mean Google missing out on that data from people in Australia.

The alternatives to Google

Google is the dominant search engine in Australia — it has 94% of the web search market in Australia — but there are other search services.

The second most popular search engine in Australia is Bing, developed by Microsoft and often integrated into other Microsoft products such as its Windows operating system and Office tools.

Another less popular search option is Yahoo, which also offers its own news and email service.

Other alternatives include niche search engines that offer unique tools with special features.

For example, DuckDuckGo is a search engine that has recently risen in popularity thanks to a commitment to protecting its users’ privacy.

The DuckDuckGo homepage — DuckDuckGo is gaining support.
DuckDuckGo/Screen shot

Contrary to the web search products from Google and Microsoft, DuckDuckGo does not store its users’ search queries or track their interactions with the system.

The quality of DuckDuckGo’s search results has improved over time, and is now comparable to that of the most popular search engines.

It says it now processes a daily average of more than 90 million search queries, up from just over 51 million the same time last year.

Despite not drawing on users’ data to refine its search algorithms, the technology behind DuckDuckGo and other smaller players is based on the same machine-learning methods that others are using.

Search the web, save the planet

Another interesting and recent proposal of an alternative web search engine is Ecosia. This system is unique as it focuses on sustainability and positive climate impact.

Its mission is to reinvest the income generated by search advertisements (the same business model Google Search is using) to plant trees in key areas around the world.

So far, it says it has 15 million users and has contributed to planting more than 100 million trees, about 1.3 every second.

Will Google really abandon Australia?

Tim Berners-Lee, widely regarded as the inventor of the web, has pointed out that the idea of asking web platforms to pay to post links runs counter to his fundamental concept.

That said, it is also unfair for a search engine to make money using content that others have created.

It is also true that most of Google’s revenue already comes from asking others to pay for links on the web. This is how Google’s online advertising works: Google Ads makes advertisers pay for every impression users get or click users make to navigate to the advertised web page.

If users end up buying the advertised product, Google gets an even higher payment.

More likely than Google pulling out of the Australian market, the government and the search giant should diplomatically find a compromise in which Google still provides its web search product in Australia and there will be a return to news organisations for Google making use of their content.

Gianluca Demartini, Associate professor, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Web’s inventor says news media bargaining code could break the internet. He’s right — but there’s a fix

Posted on January 26, 2021 by particularkev

Tama Leaver, Curtin University

The inventor of the World Wide Web, Tim Berners-Lee, has raised concerns that Australia’s proposed News Media and Digital Platforms Mandatory Bargaining Code could fundamentally break the internet as we know it.

His concerns are valid. However, they could be addressed through minor changes to the proposed code.

How could the code break the web?

The news media bargaining code aims to level the playing field between media companies and online giants. It would do this by forcing Facebook and Google to pay Australian news businesses for content linked to, or featured, on their platforms.

In a submission to the Senate inquiry about the code, Berners-Lee wrote:

Specifically, I am concerned that the Code risks breaching a fundamental principle of the web by requiring payment for linking between certain content online. […] The ability to link freely — meaning without limitations regarding the content of the linked site and without monetary fees — is fundamental to how the web operates.

Currently, one of the most basic underlying principles of the web is there is no cost involved in creating a hypertext link (or simply a “link”) to any other page or object online.

When Berners-Lee first devised the World Wide Web in 1989, he effectively gave away the idea and associated software for free, to ensure nobody would or could charge for using its protocols.

He argues the news media bargaining code could set a legal precedent allowing someone to charge for linking, which would let the genie out of the bottle — and plenty more attempts to charge for linking to content would appear.

If the precedent were set that people could be charged for simply linking to content online, it’s possible the underlying principle of linking would be disrupted.

As a result, there would likely be many attempts by both legitimate companies and scammers to charge users for what is currently free.

While supporting the “right of publishers and content creators to be properly rewarded for their work”, Berners-Lee asks the code be amended to maintain the principle of allowing free linking between content.

Google and Facebook don’t just link to content

Part of the issue here is Google and Facebook don’t just collect a list of interesting links to news content. Rather the way they find, sort, curate and present news content adds value for their users.

They don’t just link to news content, they reframe it. It is often in that reframing that advertisements appear, and this is where these platforms make money.

For example, this link will take you to the original 1989 proposal for the World Wide Web. Right now, anyone can create such a link to any other page or object on the web, without having to pay anyone else.

But what Facebook and Google do in curating news content is fundamentally different. They create compelling previews, usually by offering the headline of a news article, sometimes the first few lines, and often the first image extracted.

For instance, here is a preview Google generates when someone searches for Tim Berners-Lee’s Web proposal:

Results page for the Google Search 'tim berners lee www proposal'. — This is a screen capture of the results page for the Google Search: ‘tim berners lee www proposal’.
Google

Evidently, what Google returns is more of a media-rich, detailed preview than a simple link. For Google’s users, this is a much more meaningful preview of the content and better enables them to decide whether they’ll click through to see more.

Another huge challenge for media businesses is that increasing numbers of users are taking headlines and previews at face value, without necessarily reading the article.

This can obviously decrease revenue for news providers, as well as perpetuate misinformation. Indeed, it’s one of the reasons Twitter began asking users to actually read content before retweeting it.

A fairly compelling argument, then, is that Google and Facebook add value for consumers via the reframing, curating and previewing of content — not just by linking to it.

Can the code be fixed?

Currently in the code, the section concerning how platforms are “Making content available” lists three ways content is shared:

content is reproduced on the service
content is linked to
an extract or preview is made available.

Similar terms are used to detail how users might interact with content.

Extract showing the way 'Making content available' is defined in the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020 — The News Media and Digital Platforms Mandatory Bargaining Code 2020 outlines three main ways by which platforms make news content available.
Australian Government

If we accept most of the additional value platforms provide to their users is in curating and providing previews of content, then deleting the second element (which just specifies linking to content) would fix Berners-Lee’s concerns.

It would ensure the use of links alone can’t be monetised, as has always been true on the web. Platforms would still need to pay when they present users with extracts or previews of articles, but not when they only link to it.

Since basic links are not the bread and butter of big platforms, this change wouldn’t fundamentally alter the purpose or principle of creating a more level playing field for news businesses and platforms.

In its current form, the News Media and Digital Platforms Mandatory Bargaining Code could put the underlying principles of the world wide web in jeopardy. Tim Berners-Lee is right to raise this point.

But a relatively small tweak to the code would prevent this, It would allow us to focus more on where big platforms actually provide value for users, and where the clearest justification lies in asking them to pay for news content.

For transparency, it should be noted The Conversation has also made a submission to the Senate inquiry regarding the News Media and Digital Platforms Mandatory Bargaining Code.

Tama Leaver, Professor of Internet Studies, Curtin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Is news worth a lot or a little? Google and Facebook want to have it both ways

Posted on January 26, 2021 by particularkev

Tim Dwyer, University of Sydney

Executives from Google and Facebook have told a Senate committee they are prepared to take drastic action if Australia’s news media bargaining code, which would force the internet giants to pay news publishers for linking to their sites, comes into force.

Google would have “no real choice” but to cut Australian users off entirely from its flagship search engine, the company’s Australian managing director Mel Silva told the committee. Facebook representatives in turn said they would remove links to news articles from the newsfeed of Australian users if the code came into effect as it currently stands.

In response, the Australian government shows no sign of backing down, with Prime Minister Scott Morrison and Treasurer Josh Frydenberg both saying they won’t respond to threats.

So what’s going on here? Are Google and Facebook really prepared to pull services from their Australian users rather than hand over some money to publishers under the bargaining code?

Is news valuable to Facebook and Google?

Facebook claims news is of little real value to its business. It doesn’t make money from news directly, and claims that for an average Australian user less than 5% of their newsfeed is made up of links to Australian news.

But this is hard to square with other information. In 2020, the University of Canberra’s Digital News Report found some 52% of Australians get news via social media, and the number is growing. Facebook also boasts of its investments in news via deals with publishers and new products such as Facebook News.

Google likewise says it makes little money from news, while at the same time investing heavily in news products like News Showcase.

So while links to news may not be direct advertising money-spinners for Facebook or Google, both see the presence of news as an important aspect of audience engagement with their products.

On their own terms

While both companies are prepared to give some money to news publishers, they want to make deals on their own terms. But Google and Facebook are two of the largest and most profitable companies in history – and each holds far more bargaining power than any news publisher. The news media bargaining code sets out to undo this imbalance.

What’s more, Google and Facebook don’t appear to want to accept the unique social role of news, and public interest journalism in particular. Nor do they recognise they might be involved somehow in the decline of the news business over the past decade or two, instead pointing the finger at impersonal shifts in advertising technology.

The media bargaining code being introduced is far too systematic for them to want to accept it. They would rather pick and choose commercial agreements with “genuine commercial consideration”, and not be bound by a one-size-fits-all set of arbitration rules.

A history of US monopolies

Google and Facebook dominate web search and social media, respectively, in ways that echo the great US monopolies of the past: rail in the 19th century, then oil and later telecommunications in the 20th. All these industries became fundamental forms of capitalist infrastructure for economic and social development. And all these monopolies required legislation to break them up in the public interest.

It’s unsurprising that the giant ad-tech media platforms don’t want to follow the rules, but they must acknowledge that their great wealth and power come with a moral responsibility to society. Making them face up to that responsibility will require government intervention.

Online pioneers Vint Cerf (now VP and Chief Internet Evangelist at Google) and Tim Berners-Lee (“inventor of the World Wide Web”) have also made submissions to the Senate committee advocating on behalf of the corporations. They made high-minded claims that the code will break the “free and open” internet.

But today’s internet is hardly free and open: for most users “the internet” is huge corporate platforms like Google and Facebook. And those corporations don’t want Australian senators interfering with their business model.

Independent senator Rex Patrick hit the nail on the head when he asked why Google wouldn’t admit the fundamental issue was about revenue, rather than technical detail or questions of principle.

How seriously should we take threats to leave the Australian market?

Google and Facebook are prepared to go along with the Senate committee’s processes, so long as they can modify the arrangement. The don’t want to be seen as uncooperative.

The threat to leave (or as Facebook’s Simon Milner put it, the “explanation” of why they would be forced to do so) is their worst-case scenario. It seems likely they would risk losing significant numbers of users if they did so, or at least having them much less engaged – and hence producing less advertising revenue.

Google has already run small-scale experiments to test removing Australian news from search. This may be a demonstration that the threat to withdraw from Australia is serious, or at least, serious brinkmanship.

People know news is important, that it shapes their interactions with the world – and provides meaning and helps them navigate their lives. So who would Australians blame if Google and Facebook really do follow through? The government or the friendly tech giants they see every day? That’s harder to know.

For transparency, please note The Conversation has also made a submission to the Senate inquiry regarding the News Media and Digital Platforms Mandatory Bargaining Code.

Tim Dwyer, Associate Professor, Department of Media and Communications, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

World is watching plan to make Facebook and Google pay for content: Frydenberg

Posted on December 11, 2020 by particularkev

Michelle Grattan, University of Canberra

The Morrison government will introduce on Wednesday its legislation forcing Google and Facebook to face arbitration if they fail to come to commercial deals with traditional media on payment for content.

The government resorted to the mandatory bargaining code after it was clear agreement wouldn’t be reached for voluntary arrangements on content payment. A voluntary model had been recommended by the Australian Competition and Consumer Commission.

Treasurer Josh Frydenberg told a news conference Tuesday the government wanted the parties to reach deals outside the code. Where agreement could not be reached, the arbitration would kick in.

The ABC and SBS are among the media that will benefit from revenue under the legislation, which won’t be dealt with by parliament until next year.

Communications Minister Paul Fletcher said the ABC had indicated it would devote the revenue it receives to regional journalism. He told Tuesday’s news conference the government would not seek to offset such revenue in its funding for the ABC.

The legislation will set minimum standards for digital platforms including requiring a fortnight’s advance notice of deliberate algorithm changes that have an impact on news media businesses.

The negotiations for payment will need to incorporate the value to providers of the additional eyeballs brought by having their content on the tech platforms.

This provision was put in following consultations on the code with the tech companies. But Frydenberg stressed the money flow was only one way – from the tech companies to the traditional media.

Frydenberg said it was the government’s intention “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”. He described the outcome as fair and balanced.

He said “we live in the age of digital disruption – and nowhere is this more apparent than in our media landscape.” Dollars spent on print advertising had fallen by 75% since 2005; in that time, dollars spent on online advertising increased eightfold.

The application of the code can be extended beyond Facebook NewsFeed and Google Search to other digital platform services if they “give rise to a bargaining power imbalance”. The treasurer has the power to add new services.

Frydenberg said “the word coming back to us is that there are deals that may be struck very soon between the parties”.

He described the scheme as a “world first– and the world is watching what happens here in Australia”.

The Australia Institute’s Centre for Responsible Technology said the legislation was a “globally significant response to the growing power of Big Tech”.

The centre’s director, Peter Lewis, said the move “would give media organisations a fighting chance at building a viable business model, in the face of the market domination of Google and Facebook”.

Lewis called for cross party support for the legislation.

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

In a world first, Australia plans to force Facebook and Google to pay for news (but ABC and SBS miss out)

Posted on August 2, 2020 by particularkev

Rob Nicholls, UNSW

The Australian Competition and Consumer Commission has released its draft news media bargaining code, announced today by Treasurer Josh Frydenberg.

The draft code allows commercial news businesses to bargain – individually or collectively – with Google and Facebook, in order to be paid for news the tech giants publish on their services.

According to ACCC chair Rod Sims, the code aims to address the bargaining power imbalance between news publishers and major digital platforms, to bring about fair payment for news. As Frydenberg said:

We want Google and Facebook to continue to provide these services to the Australian community which are so much loved and used by Australians. But we want it to be on our terms.

The ACCC has previously found Google and Facebook’s failure to pay for news content is eating into the advertising revenues which fund journalism.

But what’s ‘news’?

The code is set out as exposure draft legislation and an explanatory memorandum.

These set out the rules for who can bargain. To be eligible, a news business must have employed journalists, earn more than A$150,000 per year in revenue and be registered with the Australian Communications and Media Authority (ACMA).

And they must provide “core news”, defined as:

journalism on publicly significant issues, journalism that engages Australians in public debate and informs democratic decision making, and journalism relating to community and local events.

How will bargains be struck?

The code does not specify how much news businesses should be paid. Instead, it provides a negotiating process in which Google and Facebook must take part. The negotiating phase lasts three months and includes at least one day of mediation.

If there is no agreement at the end, the process moves to compulsory arbitration (by an ACMA appointed panel) which both parties pay for. The arbitration panel will then select one of the final offers in a process sometimes called “baseball determination”. Their decision will be binding.

The range of Facebook services subject to arbitration include Facebook News Feed, Instagram and the Facebook News Tab. The Google services are Google Search, Google News and Google Discover.

WhatsApp (owned by Facebook) and Youtube (owned by Google) are not included. But if both parties agree, arbitration under the draft code could include other relevant digital platform services, too.

The ACCC will also be able to make submissions in the arbitration process (which the arbitrator can decide to consider or not). Under limited and unlikely circumstances, the arbitrator may adjust the more reasonable of the final two offers.

Algorithmic change notices

The draft code introduces a series of “minimum standards” for digital platforms to meet in their dealings with news businesses.

These include a requirement for Google and Facebook to give 28 days’ notice of any algorithmic change that will affect either referral traffic to news or the ranking of news behind paywalls.

This gives news businesses the opportunity to adapt their business models to ensure their content retains its prominence. More importantly, it means their negotiated revenue will not drop. It may also help in decisions about what content stays behind paywalls.

The same notice period is required for substantial changes to the display and presentation of news and advertising directly associated with news.

There will be an obligation on Google and Facebook to give businesses clear information about the nature and availability of user data collected through users’ interactions with the news.

This does not mean Google or Facebook must share the data itself — only that news businesses will be informed of what kind of data are being collected.

More moderation opportunities

There are also obligations on the tech giants to publish proposals which appropriately recognise the media business’ original news on their platforms and to provide those businesses with flexible tools for user comment moderation.

In addition, Google and Facebook must allow news businesses to prevent their news from being included on any individual platform service. For instance, they may choose for an article to appear on Google Search but not Google News.

News businesses will be able to moderate comments more easily. This is important considering they can be sued for comments published on their posts via platforms such as Facebook.

ABC and SBS lose out

The ABC and SBS only benefit from the minimum standards imposed on digital platforms under the code. They are excluded from the remuneration process. The government said this is because advertising revenue is not the principal source of funding for public broadcasters.

Anti-discrimination provisions are expected to prevent Google and Facebook from prioritising publicly-funded news to take advantage of this.

Not a windfall, but still good news

The draft code won’t result in a A$600 million payday for news businesses, as Nine’s chair proposed in May. However, the negotiation and arbitration process does provide certainty of a positive commercial outcome for news providers relying on advertising.

There will also be more work required for Google and Facebook to give notice of algorithmic changes, which are managed in the United States. This obligation will mean adjustments to both the tech giants’ business models.

Google has already taken steps down this path by successfully negotiating revenue sharing with some Australian news businesses. In effect, it has created a benchmark for its position in the new negotiation framework.

Meanwhile, Facebook has argued “news does not drive significant long-term commercial value” for it. However, it said it was committed to following “sensible regulatory frameworks for digital news”.

Penalties for breach

A breach of the code by Facebook or Google could have a few potential outcomes. The first is an infringement notice which has a penalty of A$133,200 for each breach.

If the ACCC takes one of the tech giants to court, the maximum penalty is the higher of A$10 million, 10% of the digital platform’s turnover in Australia in the past 12 months, or three times the benefit obtained by the tech giant as a result of the breach (if this can be calculated).

The ACCC has previously had success against franchisers for breaches of the mandatory Franchising Code. It will likely be just as vigilant in policing the news media bargaining code.

The draft code is open for public comment until the end of August. The final version will likely be considered by parliament in September.

Rob Nicholls, Associate professor in Business Law. Director of the UNSW Business School Cybersecurity and Data Governance Research Network, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

No more negotiating: new rules could finally force Google and Facebook to pay for news

Posted on April 20, 2020 by particularkev

Katharine Kemp, UNSW and Rob Nicholls, UNSW

Digital platforms such as Google and Facebook will be forced to compensate news media companies for using their content, under a new mandatory code to be drawn up by Australia’s competition watchdog.

The announcement, made by Treasurer Josh Frydenberg today, follows last year’s landmark report by the Australian Competition and Consumer Commission (ACCC), which found that news media businesses lack bargaining power in their negotiations with digital giants.

News media businesses have complained for years that the loss of advertising revenue to Google and Facebook threatens their survival. The economic crash caused by the COVID-19 pandemic has turned that crisis into an emergency.

Frydenberg pledged that the latest move will “level the playing field”, adding: “It’s only fair that those that generate content get paid for it.”

Power imbalance and tumbling profits

A mandatory code of conduct was not the original plan. When the ACCC released its report last year, it suggested that Google and Facebook should each negotiate with news media businesses to agree on how they should fairly share revenues generated when “the digital platform obtains value, directly or indirectly, from content produced by news media businesses”.

The report concluded that tech giants are currently enjoying the benefit of news businesses’ content without paying for the privilege.

For example, Google’s search results feature “news snippets” including content from news websites. Both Google and Facebook have quick-loading versions of news businesses’ articles that don’t display the full range of paid advertising that appears on the news websites’ own pages.

These tactics make it less likely users will click through to the actual news website, thus depriving media businesses of the ensuing subscription and advertising revenue. Meanwhile, as the ACCC report showed, media companies’ share of advertising revenue has itself been slashed over the past decade, as advertisers flock to Google and Facebook.

Platforms giveth, platforms taketh away

Why don’t news businesses negotiate compensation payments with the platforms themselves, rather than asking the government to step in?

The answer is the vast mismatch in bargaining power between Australian media companies and global digital giants.

The ACCC report found that digital platforms such as Google and Facebook are “an essential gateway for news for many consumers”, meaning the news businesses rely on them for “referral traffic”.

Put simply, much of news companies’ web traffic comes via readers clicking on links from Google and Facebook. But at the same time, these digital giants are dominating advertising revenues and using news companies’ content in competition with them.

The pandemic effect

The COVID-19 crisis has dealt a further blow to media companies’ advertising revenue, as potential advertisers are forced into economic hibernation or simply go out of business.

Content licensing payments from Google and Facebook could provide crucial alternative revenue. But if the payments are structured as a share of advertising income, the publishers will share in Google and Facebook’s own advertising downturn.

The ACCC will not unveil the draft code until July, so it is still unclear how the obligations will be implemented or enforced.

ACCC chief Rod Sims has pledged that Australia’s mandatory code of conduct will feature “heavy penalties” for Facebook and Google if they fail to comply, involving fines that are “large enough to matter”.

How might Google and Facebook react?

The platforms could conceivably attempt to sidestep the compensation rules by no longer providing users with quick-loading versions of news articles. Google could also cease publishing news snippets at the top of its search results, as it did in Spain when faced with similar obligations.

But there is evidence, albeit from news publishers themselves, that this would merely drive readers directly to publishers’ websites.

Australia’s decision to abandon negotiations in favour of mandatory rules stands in contrast to the situation in France, the European state most advanced in the implementation of a similar policy flowing from the European Union’s 2019 Copyright Directive.

Earlier this month, France’s competition regulator ordered Google to negotiate in good faith with publishers on remuneration for use of content. Any agreed compensation will be backdated to October 24, 2019, when the Copyright Directive became law in France.

Google’s previous solution had been to require that publishers license the use of snippets of their content to Google at no charge. But France’s watchdog argued this was an abuse of Google’s dominant position.

Google and Facebook are likely to continue to resist these developments in Australia, knowing they could be copied in other jurisdictions.

Even if they do cooperate, it’s not yet clear that “levelling the playing field” with the tech giants will make any difference to the collapse of media advertising revenue driven by the coronavirus.

Katharine Kemp, Senior Lecturer, Faculty of Law, UNSW, and Academic Lead, UNSW Grand Challenge on Trust, UNSW and Rob Nicholls, Associate professor in Business Law. Director of the UNSW Business School Cybersecurity and Data Governance Research Network, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Government orders mandatory code of conduct for Google, Facebook

Posted on April 20, 2020 by particularkev

Michelle Grattan, University of Canberra

The government has told the Australian Competition and Consumer Commission to develop a mandatory code of conduct to address bargaining power imbalances between media companies and digital platforms such as Facebook and Google – and the question of payment for content.

Earlier the ACCC was directed by the government to facilitate a voluntary code. But slow progress and the impact on the media of the coronavirus have convinced the government of the need for more urgent and compulsory action.

In its Digital Platforms Inquiry report of last year, the ACCC identified a bargaining power imbalance between news media organisations and these large digital platforms, and recommended codes of conduct to govern commercial relationships.

Treasurer Josh Frydenberg and Communications Minister Paul Fletcher have said in a statement the timeframe needs to be accelerated.

“The Australian media sector was already under significant pressure – that has now been exacerbated by a sharp decline in advertising revenue driven by coronavirus,” the ministers say.

“At the same time, while discussions between the parties have been taking place, progress on a voluntary code has been limited, according to recent advice provided by the ACCC”.

The ministers say the ACCC considers it unlikely any voluntary agreement would be reached on the key issue of payment for content.

The code will cover data sharing, ranking and display of news content, and the monetisation and the sharing of revenue generated from news. It will also include enforcement, penalty and binding dispute resolution mechanisms.

The ACCC will release a draft before the end of July, and the government wants the code finalised soon after that.

The University of Canberra’s 2019 Digital News Report said the majority of surveyed consumers who access news online get this news via indirect methods, such as social media, news aggregators, email newsletters and mobile alerts.

According to Nielsen Panel Data for February 2019, Google search had a unique audience of 19.7 million in Australia, and Facebook had a unique audience of 17.6 million.

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Pay pharmacists to improve our health, not just supply medicines

Posted on October 13, 2019 by particularkev

Pharmacists receive no financial incentive to counsel patients about how to take their medicines. That needs to change.
from www.shutterstock.com

John Jackson, Monash University and Ben Urick, University of North Carolina at Chapel Hill

When you have a medicine dispensed at your local pharmacy under the
Pharmaceutical Benefits Scheme (PBS), two things happen. The federal government determines how much the pharmacy receives for dispensing your medicine. It also decides what you need to pay.

This so-called fee-for-service funding means pharmacies maximise their revenue if they dispense many prescriptions quickly.

Rather than fast dispensing, it would be better for patients and the health-care system if the funding model paid pharmacists for improving the use of medicines, not just for supplying them.

This is possible, according to our research published recently in the Australian Health Review. And it should be considered as part of the next Community Pharmacy Agreement, which outlines how community pharmacy is delivered over the next five years.

Dispensing medicine is more complex than it looks

Dispensing medications may seem simple but this can be misleading: it includes both commercial and professional functions.

Under the PBS, the pharmacy receives a handling fee and mark-up on the cost of the drug to cover the commercial cost of maintaining the pharmacy and stock.

It also receives a dispensing fee for the pharmacist’s professional activities. These include reviewing the prescription to ensure it is legal and appropriate, taking into account factors such as your age, whether you are pregnant and which medicines you’ve been prescribed before; creating a record of the dispensing; labelling the medicine; and counselling you, including providing a medicine information leaflet if needed.

Higher dispensing fees are paid for medicines needing greater levels of security (such as controlled drugs including opioids) and for medicines the pharmacist must make up (such as antibiotics in liquid form).

But for the vast majority of PBS prescriptions, a pharmacy receives the same basic dispensing fee, currently A$7.39.

If you have a medicine dispensed for the first time, if it has a complicated dose, or it carries particular risks such as side effects or interactions, a pharmacist is professionally obliged to provide counselling matched to the risk. The more detailed the counselling, the greater the time needed.

However, at present, the dispensing fee to the pharmacy does not change depending on the level of counselling you need. Indeed, the current funding model is a disincentive for the pharmacist to spend time with you explaining your medicine. That’s because the longer they spend counselling, the fewer prescriptions they can dispense, and the fewer dispensing fees they receive.

What could we do better?

Performance-based funding, in which payment is adjusted in recognition of the efforts of the service provider or the outcomes of the service delivered, is becoming more common in health care and can correct some of the volume-related issues mentioned above.

It’s already being used in Australia. For instance, GPs are paid a Practice Incentives Program (PIP) to encourage improvements in services in areas such as asthma and Indigenous health.

However, performance-based funding has yet to be used for pharmacists’ dispensing in Australia.

We propose dispensing fees should be linked to the effort pharmacists make to promote improved use of medicines. This is based on the principle that counselling means people are more likely to take their medications as prescribed, which improves their health.

In other words, pharmacists would receive higher dispensing fees when more counselling is required or if counselling leads to patients taking their medications as prescribed.

Pharmacists who spend longer counselling, for instance if someone’s health status has changed, should be rewarded for it.
from www.shutterstock.com

Dispensing fees could be linked to the actual time taken to dispense a prescription: the longer the time, the higher the fee. The time taken would depend on the nature of the drug; the complexity of the patient’s treatment; recent changes in the patient’s health status or other medicines that need to be taken into account; consultation with the prescribing doctor; and the level of advice and education provided.

A blended payment model could include a fee-for-service payment for commercial processes and a performance-linked payment for professional functions.

The most experience with performance-based payments to pharmacy is in the United States, where evidence is developing of patients taking their medicine as prescribed and lower total health-care costs.

In England, the government’s Pharmacy Quality Scheme is similar to the Australian Practice Incentives Program for GPs. It funds improved performance in areas such as monitoring use of certain drugs and patient safety.

There is some concern about performance-linked payments. Performance targets need to be achievable without being onerous. And performance needs to be clearly linked to the payment being made, but not if other services suffer.

Incentives could apply to you too

Cost is a barrier to some people taking their medicines with over 7% of Australians delaying or not having prescriptions dispensed due to cost.

However, there is currently no financial incentive for you to have a generic (non-branded) medicine dispensed, which would save on PBS expenditure. So it makes sense for generic medicines to be a lower cost to you.

There is also currently no financial incentive for you to take your medicine as prescribed, which would likely improve your health and save the health budget in the long run. We are not aware of any country varying patient charges based upon this, although there are ways of monitoring if people take their medicines as directed.

However, countries such as New Zealand and the United Kingdom have lower or no patient prescription charges, minimising costs as a barrier to patients taking their medicine.

What would need to happen?

Dispensing a prescription should be an invitation for the pharmacist to interact with you and help you with advice on the effective and appropriate use of your medicine. At present, there is no incentive, other than professionalism, for pharmacists to add such value.

The proposed changes would require a major restructure to the funding of dispensing to provide incentives that are equitable and transparent and that did not adversely affect disadvantaged, rural and Indigenous people.

There would need to be agreement on reliable and valid performance measures and reliable information systems.

However, funding based on a professional service model rather than a dispensing volume model would support your pharmacist to provide greater benefit to you and the health-care system.

John Jackson, Researcher, Faculty of Pharmacy and Pharmaceutical Sciences, Monash University and Ben Urick, Research Assistant Professor, University of North Carolina at Chapel Hill

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Why family violence leave should be paid

Posted on March 31, 2018 by particularkev

Kate Farhall, RMIT University

Five days unpaid family violence leave is a significant improvement over no guaranteed leave at all. But research shows that finances and domestic violence are inextricably linked.

Access to a steady income can mitigate the effects of violence and provide avenues out of abuse. Paid family violence leave is one tool to achieve this.

Research shows leaving an abusive relationship can be costly. This includes the cost of relocation (such as breaking a lease or finding alternative housing), medical and counselling bills, increased transportation costs due to moving house or loss of access to a car, as well as lost earnings – among other financial burdens.

The Australian Council of Trade Unions places the total figure at around A$18,000.

Given this, financial hardship can bind women to abusive relationships. As such, the economic backing that ongoing employment supplies can be a critical factor in supporting women to leave abusive relationships. Continued employment can also serve to psychologically bolster victims.

The impact of violence on earnings and employment

Family violence can significantly impact lifetime earnings. This has flow-on effects for victims’ ability to live safe and healthy lives.

In Australia, approximately two-thirds of women experiencing domestic violence are in paid employment.

Research shows a significant correlation between the experience of domestic violence and reduced lifetime earnings. Some studies in the United States show a 25% loss in income associated with abuse.

Victims of domestic violence also experience higher rates of part-time and casual work, lower retirement savings and a lack of job stability. Many lose their jobs as a direct result of violence.

The effects of violence are not only felt while the abuse is ongoing, but can reverberate for at least afurther three years after the violence has stopped.

This also has substantial consequences for career progression and therefore potential future earnings.

Victims of domestic violence are also more likely to experience food insecurity, to struggle to find affordable housing and cover the basic essentials like utility bills.

Domestic violence victims are also more likely to experience anxiety over their ability to support their children, even as compared to others on a low income. In fact, all of this is intensified for low-income women.

As Adrienne Adams and her colleagues explain, “whether it is a few hours out of a day, a few days out of a week, or a few months out of the year, missed employment opportunities translate into lost income”.

Providing paid family violence leave means we’re not asking victims to choose between forgoing necessary support for the sake of financial security.

It also means that victims may be better able to weather the storm of domestic and family violence and may be more productive at work (although more research is required to assess this).

Providing family violence leave – and ensuring that it is paid – is a fundamental aspect of workplace support for victims.

Research also shows a symbiotic relationship between financial stress and rates of domestic violence. What people think about their own economic insecurity is closely associated with higher rates of domestic violence, according to one comprehensive study in the United States.

By failing to provide family violence leave we risk re-entrenching existing forms of disadvantage and failing to address a potential contributing factor to the persistent gender pay gap in this country.

Paid domestic and family violence leave only represents one aspect of a comprehensive response that workplaces can provide, yet it is a substantial one.

The argument that paid domestic violence leave will negatively impact employers fails to take into account actual patterns of usage, so the potential benefits seem to far outweigh the costs.

Kate Farhall, Postdoctoral research fellow, RMIT University

This article was originally published on The Conversation. Read the original article.

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