Australian Competition and Consumer Commission (ACCC) chair Rod Sims on Wednesday touched on the battle[1] the watchdog is currently facing with Google and Facebook on the platforms' "considerable" market power, saying it isn't simply a case of creative destruction.
"The digital platforms, Google and Facebook, clearly have market power. It is simply extraordinary how the digital platforms continue to reject that they have market power when everyone else sees it as obvious," Sims said in his address to the National Press Club (NPC).
"Further, their 'take it or leave it' attitude to dealing with news media businesses is damaging journalism, which in my strong view is essential to our society.
"And let's be clear, this is not a case of Schumpeterian creative destruction. The situation we are in is not akin to the car replacing the horse and buggy. The digital platforms do not produce news; rather they are vehicles for the dissemination of views and information which would be all the poorer, including for digital platforms, with a lack of content from professional journalists."
The ACCC is introducing a News Media Bargaining Code[2] that adopts a model based on negotiation, mediation, and arbitration to "best facilitate genuine commercial bargaining between parties, allowing commercially negotiated outcomes suited to different business models used by Australian news media businesses".
The ACCC believes the code is necessary to address the fundamental bargaining power imbalances between Australian news media businesses and major digital platforms, such as Facebook and Google.
But Google believes it contains an unfair arbitration process[3] that "ignores the real-world value Google provides to news publishers and opens up to enormous and unreasonable demands" and similarly Facebook takes issue with the code, threatening to pull news completely[4] from its Australian platform.
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