Federal Government has the Internet giants in its sights

Paul Fletcher.

If the Federal Government needed any further vindication for imposing a mandatory code which will force Google, Facebook and other international digital platforms to pay Australian media companies for sharing news content, Google Australia’s latest financial results are timely.

The Internet giant last week revealed advertising revenues in Oz in calendar 2019 jumped by 16 per cent to $4.3 billion – and it made a pre-tax profit of $134 million on net revenues of $1.2 billion.

Paul Fletcher, the Minister for Communications, Cyber Safety and the Arts, tells IF: “Google extracts a lot of advertising revenue from the Australian market, as their latest results confirm.

“It is another illustration of the substantial market power of Google and Facebook which the ACCC highlighted in its report last year.

“Google and Facebook use content that is generated by Australian media businesses to accumulate eyeballs which they are monetising through advertising revenue.”

Nine chairman Peter Costello and News Corp. Australia executive chairman Michael Miller have both called on the Internet giants to pay the equivalent of 10 per cent of their annual Australian revenues – $600 million – into a fund distributed between Australian media companies.

“These are the issues we want the ACCC to address in this code,” Fletcher said. A draft of the code will be released for consultation by the end of July, with legislation to follow.

On the subject of ABC funding, the Minister disputes the notion that public broadcaster’s funding has been reduced despite the three-year, $84 million indexation pause which ABC MD David Anderson has warned will mean cuts to jobs and services.

Anderson has said the freeze will result in a reduction of $41 million from 2022, on top of $64 million cuts imposed in 2014.

“ABC funding is stable and indeed growing,” Fletcher insists, citing the extra $43 million provided last year for local and regional journalism.

“The ABC has a degree of funding certainty that most media businesses would love to have. It is not true that ABC funding is less now than it was last year.

“It is for ABC board and management to determine how they allocate their funding. Every dollar that can be saved through efficiencies can be redeployed into providing services to viewers and listeners.”

Another item on the Minister’s agenda is a review of the outdated screen classification scheme which was introduced in 1995.

The current system results in anomalies which make no sense, such as having to reclassify a film for ancillary markets after its theatrical release, he said.

Screen Producers Australia, the Australian Children’s Television Foundation and major and independent distributors and exhibitors repped by the Film Industry Associations have called for a uniform classification system across all delivery platforms, with self-classification by the industry, overseen by a government regulator.

The Australian Communications and Media Authority (ACMA) wants to take responsibility for overseeing the classification of commercially-provided content across all platforms, which would mean scrapping the Classification Review Board.

Neville Stevens, who is leading the review, is expected to deliver his report to the Minister in two or three months.

All Commonwealth, state and territory classification Ministers must unanimously agree to any amended code and films and computer games guidelines.