Google, Meta to be forced to strike deals with news media - Govt

December 4, 2022

Online platforms will be forced to pay news publishers under a new bargaining scheme that could bring "about $30 to $50 million" into the media sector, Broadcasting Minister Willie Jackson has announced.

Jackson said the Government is currently developing legislation that would introduce a "backstop" to "encourage" tech giants to strike deals with online news companies.

"It’s not fair that the big digital platforms like Google and Meta get to host and share local news for free. It costs to produce the news and it’s only fair they pay."

He explicitly named Google and Meta, which owns Facebook and Instagram, as companies considered targets of the planned legislation.

Speaking to Q + A this morning, Jackson said the legislation would set out a process for negotiations, mediation, and mandatory bargaining - if agreements couldn't be struck between tech platforms and media companies.

"We're talking about the timeline right now, and we're talking maybe three-to-six months we'll give them in terms of trying to reach an agreement," he said.

"If there's not an agreement, then a mandatory mediation process and arbitration process will be put in place to make sure that a fair deal is rolled out."

He said the threat of a mediation process would act as an incentive for platforms to strike deals on their own terms with private media companies.

Similar mandatory bargaining schemes have been introduced in Australia and Canada in the past several years. The Broadcasting Minister said he believed research showed there was an "imbalance" that necessitated a legislation-backed mechanism.

Person touches Facebook app icon on phone.

"In recognition of the power imbalance between the big online platforms and local companies the legislation will allow media organisations to form collectives without first requiring Commerce Commission approval to negotiate," he said in a statement.

“The legislation will be designed as a backstop to encourage companies to reach high quality voluntary agreements in the first instance. If companies like Google and Meta do good deals then they can avoid the new law being utilised."

“The legislative fall back can be powerful. For example, in Australia, the legislation has never been used because companies have done voluntary deals to avoid being subject to the legislation. And in Canada, Google has reached agreements with more than 150 publications ahead of legislation coming in."

He told Q + A that the Broadcasting Standards Authority would play a role in regulating and "shaping" the new scheme,

"They're going to be our regulator with regards to this. So they'll work through this. They'll shape the bargaining process, the framework in terms of what's going to happen and where it's going to go. The reality is we're talking about $30 to $50 million coming back into the local market," he told Q + A.

Jackson said the mandatory bargaining scheme would bring an influx of additional revenue that would be used to produce "high-quality content".

“While some deals have been reached voluntarily, small regional, rural, Maori and Pacific and ethnic media outlets are likely to miss out, so this is about ensuring everyone gets a fair go," he said in a statement.

The announcement comes after calls from some in the industry, including Stuff's chief executive, to introduce an Australian-style mandatory bargaining scheme.

Australia's Commerce Commission estimated that tech giants paid media companies around AU$200 million (NZ$212 million) after its scheme was enacted last year.

READ MORE: Facebook backs down on Australia news ban after ‘constructive discussions’ with government

Meanwhile, some have criticised the Australian scheme for not forcing media companies to directly spend new revenue on public-interest journalism.

Speaking to Q + A, Willie Jackson said the Government "could probably find a way" to force publishers to spend new revenue to produce additional journalism.

"That's something that I will try and ensure is in the legislation, because otherwise, it's all a waste of time," he said. "We'll find a way."

Last year, a Government-commissioned report on bargaining imbalances suggested Kiwi news companies also derived "considerable" economic benefits from online platforms.

"Digital platforms benefit from increased engagement from having links to news content on their platforms, but it is also apparent that news firms derive considerable value from their content being made easily accessible to consumers via Google and Facebook's platforms," its authors said.

"Even though the platforms are almost certainly benefiting from facilitating access to news content, it does not follow that this benefit is coming at the expense of news firms or that they are in a zero-sum relationship with news firms."

Meta responds

“This proposal fundamentally misunderstands the relationship between Facebook and news, publishers are the ones who control whether and how their content appears on Facebook and receive significant value from sharing it," Mia Garlick, Regional Policy Director for Meta said in a statement on Sunday.

"It also fails to recognise our current commercial deals in New Zealand or Government’s own independent advice that news legislation won’t solve the longstanding digital transformation challenges facing the news industry. We are concerned about the unintended impacts future legislation will have on innovation in both the media and broader tech sector, in particular for smaller entrepreneurial publishers including Māori, regional, digital first and diverse media.”