Given the time difference, Rod Sims talks while making coffee at six in the morning in Melbourne. Sims is a quiet, fussy, cautious president of the Australian Antitrust Authority (ACCC) who has just found himself in the eye of a storm in the global technology industry. Facebook reacted to Australia’s new media law, inspired by Sims, by blocking all news content produced in the country. In the end he turned and recognized, for the first time, substantial revenues to those who produce journalism.
Some Big Tech groups say your law is a disguised link tax. cos?
Not at all. We could describe it as an agreement with a monopolist who controls, for example, a port, a situation in which a certain company is the only one to provide a service. If we decide that we are indeed in a monopoly position, we regulate the tariffs it can impose. We block the price.
But you can’t do this with a great technology platform, right?
For this we have acted with a law. We estimate that there is a market failure in the media industry with important consequences. Facebook virtually has a monopoly on social media. If you want to post content on social networks, you actually have to use Facebook. They are almost monopolists, the terms dictate. And so far one of the terms they’ve dictated was that they wouldn’t pay for having valuable content on their sites.
How did you respond?
We have passed a law which says that the parties must negotiate a settlement and, if they fail, they go to arbitration. This balances bargaining power when Facebook says “take it or leave it”, precisely because a media group can now take Facebook to arbitration if not satisfied with the terms offered.
Does this make a compromise easier?
With the prospect of going to arbitration, the commercial agreement is usually made to avoid it. The meaning of the media law to rebalance the power between the parties. And with it now in place, Facebook is already making deals and media groups are very happy with it. Before, they were dissatisfied, because basically they were told to get out of the way.
Do you have an estimate of the financial impact of these agreements for a country of 25 million inhabitants like Australia?
It’s hard to know, because trade agreements are private. But the companies are happy. They were not offered anything before. In Australia we have four main media groups which represent 70-75% of the market. it came out in the papers that two of those four groups are now earning A $ 30 million a year (€ 19.5 million, ed).
For the sector nationwide, does that mean about A $ 100 million, or € 65 million?
At least that figure, yes.
Could this be a model for other countries as well? The EU Commission gives heavy fines to the platforms of the Big Tech. But it takes years to get there and for those groups the fines are now just operating costs like others.
It could be a model. Each country has its own legislative culture that is different from the others. But there’s no reason why it can’t be done elsewhere.
Facebook’s blocking of Australian media content sharing was drastic. Why then did they change direction?
I guess they wanted to show how important they are and to what extent people depend on them. An extraordinary choice. They hoped to elicit a reaction from the user public which, according to them, would force the government to back down. Instead, the government remained steadfast in saying it would not change the lines of the media law. And the reaction from the public was also strong, because Facebook played its cards a bit too much. They blocked emergency services, medical information – stuff that had nothing to do with media law. That infuriated the population. So a combination of popular fury, negative reaction to Facebook’s moves, and government firmness ended up shifting the balance.
March 14, 2021 (change March 14, 2021 | 23:50)