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News Analysis 21 Apr 2021 - 5 min read

‘I’m no Murdoch minion... he's the little guy’: ACCC chief Rod Sims unapologetic for empowering media's old guard

By Sam Buckingham-Jones - Senior Writer

"We never said the code is the answer to journalism. We said the code is the answer to one problem journalism faces: the lack of bargaining power with Google and Facebook"

Rod Sims has pushed back after being called a Murdoch minion by the New York Times in driving forward Australia's news bargaining code. Sims also harpooned claims by Google that 'big business' had bent the ear of federal government and regulators. Murdoch, he suggested, is a midget compared to the tech giants. He also suggested Facebook had misunderstood the nature of antitrust – and flagged that the code is merely one small part of Australia's overhaul of data, privacy and competition.

What you need to know:

  • ACCC Chair Rod Sims has brushed off suggestions he is a Murdoch lackey from New York Times columnist Ben Smith, and in bringing Google and Facebook to the bargaining table said the regulator has successfully brandished its stick without having to use it. 
  • Sims spoke about the News Media Bargaining Code at the Open Markets Institute’s 'After Google and Facebook: The Future of Journalism and Democracy' conference alongside NYT columnist Ben Smith, FT Editor Rana Foroohar and OMI Policy Director Phillip Longman.
  • He indicated that there is more to come from Australia's regulators and lawmakers as the country attempts to remake rules fit for a digital world.
  • You can watch the 30-minute segment below.

I did point out that News Corp internationally is about one per cent of Google. Say what you like about the Murdoch empire – go for it – the idea of Google saying 'they’re big business and we’re the little guy’… Google’s 100 times bigger.

Rod Sims, ACCC Chair

The head of Australia’s competition and consumer watchdog has dismissed suggestions government and regulator were led to regulate Google and Facebook by media's challenged old guard.

Australia’s dealings with Google and Facebook have garnered worldwide attention, and in an introduction to Sims’ appearance at the Open Market Institute’s forum on The Future of Journalism and Democracy, OMI Policy Director Phillip Longman said Sims was "the man of the hour," with "the eyes of the world on Australia." 

But while Google and Facebook fought tooth and nail to avoid regulation via the code, Sims suggested that it is not necessarily a silver bullet that can be remanufactured elsewhere.

“I often get asked if the code is the way forward,” he said. “I say no. The code is part of a suite of measures relevant to journalism. We never said the code is the answer to journalism. We said the code is the answer to one problem journalism faces: the lack of bargaining power with Google and Facebook."

 

You can’t negotiate with a monopoly. And Google is effectively a search monopoly, Facebook is very close to a social media monopoly.

Rod Sims, ACCC Chair

Murdoch minion?

Fellow panellist, NYT columnist and journalist Ben Smith, suggested that the bargaining code was “driven largely by News Corp”.

“Is that accurate? Are you basically a Rupert Murdoch minion?” he asked Sims.

Sims replied: “We came up with this idea, and Google’s whole response was, ‘this is big business taking over the internet’. They played into the Murdoch line, they ran that very strongly.

“I did point out that News Corp internationally is about one per cent of Google. Say what you like about the Murdoch empire – go for it – the idea of Google saying 'they’re big business and we’re the little guy’… Google’s 100 times bigger. No, I don’t think it is right, to answer the question.”

Sims said while News Corp backed the proposed bargaining code, the company had put forward several proposals – including a board that would look at Google and Facebook’s algorithms – that were rejected.

He said the code has proven to be a more equitable way of levelling the negotiating playing field between publishers and big tech - and that most publishers have been happy with the subsequent outcomes.

“One argument against the code is that it favours big players, and the small players lose out,” he said. “It’s just wrong in fact.”

The proposed code met with heavy resistance both nationally and internationally. Other than Google and Facebook, industry groups and businesses like the Business Council of Australia, Ai Group, Atlassian, S4 Capital founder Sir Martin Sorrell and Electronic Frontiers Australia expressed significant concerns.

“Legislation creating ‘government-favoured’ categories of websites will only disrupt neutrality on the Internet,” Atlassian director of global public policy David Masters wrote. He also expressed fears of retaliatory behaviour, given the US' response to other measures seen as a tax on US tech companies.

Thinkerbell General Manager of Media Ben Shepherd suggested: “This is like the ACCC stepping in to regulate the Richmond Football Club because they're winning too many premierships.”

But all that noise has since died down.

We recommended a misinformation/disinformation code where platforms would be forced to take down material – the code wasn’t the only thing, it was a suite of measures, it would be good that people not just look at the code but all of the measures.

Rod Sims, ACCC Chair

Big stick

Sims spoke at length about the importance of the code including a possible arbitrator. Not a single deal done by any media outlet so far has needed to resort to an arbitrator, Sims said – both sides in the negotiation wouldn’t like the uncertainty.

“The idea of the code is to even up the bargaining power, because otherwise, you can’t negotiate with a monopoly. And Google is effectively a search monopoly, Facebook is very close to a social media monopoly. So it’s impossible to have a proper negotiation, all you get is a take it or leave it arrangement,” he said.

“The deals all done so far are deals that have been commercially negotiated. They haven’t had yet to resort to arbitration. What we find in Australia is that the threat of arbitration evens up the bargaining power.

‘The companies usually avoid arbitration because they just don’t know whether they’ll win or lose out of that. They’ve done their own deal. The media companies are happy with the deals they’ve done. They think they’re getting value.”

Collective bargaining

Sims was pressed on the notion of collective bargaining, a controversial topic in the US. Facebook, he said, believed allowing media companies to group together to negotiate would violate competition laws. He used the example of mineral exporters negotiating with a monopoly-owned port: by banding together, they could get a better deal for everyone.

“We had arguments from Facebook that allowing collective bargaining was somehow in violation of antitrust principles,” he said.

“That statement misunderstands what antitrust is all about. Antitrust is about promoting economic efficiency, and so there is nothing wrong – at all – with allowing collective bargaining when the party on the other side has all of the bargaining power or is a near monopoly.

“The fact we have collective bargaining means the smaller players can get together and also have enough power to get themselves good deals.”

The code wasn’t the only thing, it was a suite of measures, it would be good that people not just look at the code but all of the measures.

Rod Sims, ACCC Chair

Longman asked Sims how the bargaining code could avoid some media outlets acting as “scabs” and being lured away by separate, individual deals with Facebook and Google.

“The question you’ve posed is the right one,” Sims replied.

“If Google and Facebook go and do deals with a few initially, the other players have still got the right to go to arbitration in their own right. The problem with collective bargaining without arbitration is, you can have selective deals that cut the others out. You can have scabs. It’s irrelevant with arbitration.”

Warming up

Sims closed the conference by emphasising the need for a suite of arrangements to curb the power of big tech – with more to come.

“Our recommendations had not just recommendations on the code, [but] on additional funding from the government for specific journalism, funding for tax breaks for philanthropic contributions, [and] we also recommended re-doing our privacy legislation,” he said.

“We recommended a misinformation/disinformation code where platforms would be forced to take down material – the code wasn’t the only thing, it was a suite of measures. It would be good that people not just look at the code but all of the measures.”

Watch the session below.

 

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Sam Buckingham-Jones

Senior Writer

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