What you need to know:

• Google and Facebook have threatened to pull Australian news should the government go ahead with its mandatory bargaining code on revenue sharing.
• MD of The Guardian Australia, Dan Stinton, says the public information campaigns from Big Media and Big Tech around the Federal Government's proposed bargaining code are distracting the public and industry from the “real issue”.
• Stinton says the focus has shifted to a conversation around how much the duopoly will have to pay publishers, should the code come into effect.
• He argues this needs to stop, as the issue remains unchanged – “it’s about a fair competitive code for both sides”.
• However, he says the recent move by Facebook to drop news in Australia is concerning and must be addressed, as there is “no doubt” publishers have come to rely on traffic from the platform.
• Surveys conducted by Essential Media and published onThe Guardian found that 52% use platforms including Google and Facebook to search for and read news daily.
• However, 75% of those people said they would simply go directly to the relevant news source should news be removed from the two digital players.
• Fifty-three per cent said they would use other digital platforms such as Twitter and LinkedIn, while 37% said they would use the Apple News aggregator.

Not about cashing cheques

The past month has seen a fierce war of words between the digital duopoly of Facebook and Google and Australia’s major publishers.

Tension continues to mount over the Federal Government’s proposed media bargaining code, which will force the big tech platforms to strike revenue share deals with Australian media companies for news or risk fines of up to 10% of turnover if they don't treat them fairly.

The digital platforms will also need to give media companies 28 days’ notice if any changes to their algorithms are likely to materially affect traffic to news sites.

In response, Google and Facebook have each unleashed individual scare campaigns aimed at consumers.

Google was first off the block, releasing an open letter in August that claims user data could be "at risk" and handed over to "big news businesses" as a result of the code.

Two weeks ago, Facebook revealed its weapon of choice: a threat to remove news services entirely from its Australian platform.

Most of Australia’s major publishers and industry bodies have been vocal on Facebook’s threat, slamming it as a dummy spit, bullying, a cynical ploy and much more.

However, for independent news publisher The Guardian and its local MD Dan Stinton, the “noisy battle” is distracting the industry from the real issue.

Speaking to Mi3, Stinton says much of the conversation has become centred around the cost to Facebook and Google should the code come into effect.

“I'm not surprised that Google and Facebook have reacted to the way they have to the code, because it does a fairly elegant job of correcting the power imbalance and that’s where the real issue lies,” Stinton says.

“What’s now concerning is that there is a lot of conversation around what the two will have to pay, which the code does not specify, rather than the central issue which is that the platforms dominate the digital ad market where they compete with publishers, while also gaining a substantial benefit from our content that they do not  pay for."

Stinton says the ability to force Facebook and Google to “cut massive cheques” is not what Australians should be focusing on.

He argues that while there is no doubt financial compensation for access to premium news content is vital, the ACCC’s proposals are designed to establish a “clean and concise” competitive mandate between the digital giants and major publishers.

There has been significant industry chatter that the code will only benefit large-scale media companies such as Nine and News Corp, given the amount of bargaining power they have over smaller publishers.

However, Stinton rejects that claim. “Of course, what Google and Facebook pay publishers is going to vary due to levels of investment into journalism, but the ACCC has done a great job of a developing a code that fosters equal bargaining rights at all levels,” he says.

“Regardless of size, if you’re turning over $150,000 of revenue per annum, you have the right to bargain with these players and that’s something that right now is extremely difficult if you’re a smaller publisher in regional Australia, for example.”

In June this year, Google made deals with independent publisher groups Schwartz Media, the publisher of The Saturday Paper, and Crikey publisher Private Media.

But it is understood these deals, which would see Google pay for news content, have been put on hold, pending the fate of the ACCC code.

Stinton says the Schwartz and Crikey deals are examples of where the code is invaluable to all publishers regardless of size.

“One of the main reasons Google has gone down the path of engaging constructively with publishers about licensing their content is because of the regulatory pressure which has been building in this market,” Stinton says.

“My concern is the code doesn’t happen and what’s stopping Google from pulling those smaller deals out from underneath those publishers in 12 months’ time?”

Alternative avenues

Facebook’s threat to ditch news services has been blasted by its many critics. Federal Treasurer Josh Frydenberg weighed in on the issue, stating that the government would not bend to “coercion or heavy-handed tactics”.

Stinton says there are “reasonable concerns” over what impact the move would have on readership. He says there are some publishers, such as the Daily Mail, that rely heavily on click-throughs from Facebook and the search capabilities of Google.

“There’s no doubt that if Facebook pulls its news services from Australia, numerous publishers will feel an immediate sting,” Stinton says.

“We’re not excluded from this either. I would say approximately a third of our audience does come from the digital giants and those aren’t numbers you want to lose.”

In a recent poll of The Guardian readers, 52% said they used platforms like Google and Facebook to search for and read news daily. A further 22% used the platforms at least weekly, while 8% used them monthly.

“What that says to me is while we do receive a level of benefit from the duopoly, there is also a lot they are gaining out of us,” Stinton says.

"People go to the platforms knowing that is where they can access news, and a large proportion simply read the headlines and snippets without clicking through to the publisher sites.

Stinton says its worth noting that when people do click through, The Guardian monetise those users with Google's ad server, however are unsure as to how much Google makes from those ads because they are not transparent. 

"This is why we need the code because it recognises the benefits the platforms receive and is not just focussed on the benefit publishers receive from referrals," Stinton says.

According to The Essential Media survey, 75% of the people who use Facebook and Google to access news said they would simply go directly to the relevant news source if news was removed from the digital platforms.

Fifty-three per cent said they would use other digital platforms such as Twitter and LinkedIn, while 37% said they would use the Apple News aggregator.

Stinton says these findings highlight the need for Facebook and Google to consider their next moves, especially given the the ACCC’s proposals could set a precedent for regulators and governments overseas.

“These results show that Australians will always want news and if the two digital giants pull out, it’s possible we will see increased direct traffic to our site, as could other publishers,” Stinton says.