Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2019-2020-2021
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TREASURY LAWS AMENDMENT (NEWS MEDIA AND DIGITAL PLATFORMS
MANDATORY BARGAINING CODE) BILL 2020
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be moved on behalf of the Government
(Circulated by authority of the
Treasurer, the Hon Josh Frydenberg MP)
Table of contents
Glossary................................................................................................. 1
General outline and financial impact ...................................................... 3
Chapter 1 News Media and Digital Platforms Mandatory
Bargaining Code - Parliamentary Amendments .......... 5
Chapter 2 Statement of Compatibility with Human Rights .......... 11
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
Competition and Consumer Competition and Consumer Act 2010
Act
The Code News Media and Digital Platforms
Mandatory Bargaining Code
1
General outline and financial impact
News Media and Digital Platforms Mandatory Bargaining Code
- Parliamentary Amendments
The Parliamentary Amendments to the Bill make it clear that:
• the remuneration amount in final offers and arbitral
determinations must be expressed as a lump sum;
• arbitral determinations are consistent with rights under contracts
that are in force between the parties;
• at the same time that they submit final offers, parties must
provide the arbitral panel with information that is relevant to the
arbitration relating to all contracts between the bargaining parties
and/or related bodies corporate of the bargaining parties;
• submissions made to the arbitral panel by the Commission must
be impartial and contain information about the relevant market
and economic principles; and
• the advance notification requirements for digital platform
corporations are limited to circumstances where they are making
changes to an algorithm which are likely to have a significant
effect on referral traffic to covered news content.
• The amendments amend the non-differentiation rules by
extending them to cover differentiation because a news media
business registers, is eligible to register or applies to be
registered to participate in the Code.
Date of effect: The day after the Bill receives the Royal Assent.
Proposal announced: These amendments have not previously been
announced.
Financial impact: Nil.
Human rights implications: The amendments do not affect the analysis
of the human rights issues provided for in the Explanatory Memorandum
to the Bill. See Statement of Compatibility with Human Rights -- Chapter
2.
Compliance cost impact: The amendments are not expected to
substantially alter the cost impact outlined in the Explanatory
Memorandum to the Bill.
3
Chapter 1
News Media and Digital Platforms
Mandatory Bargaining Code -
Parliamentary Amendments
Outline of chapter
1.1 The amendments to Schedule 1 to the Bill clarify that:
• the remuneration amount in final offers and arbitral
determinations must be expressed as a lump sum;
• arbitral determinations are consistent with rights under contracts
that are in force between the parties;
• at the same time that they submit final offers, parties must
provide the arbitral panel with information that is relevant to the
arbitration in relation to all relevant contracts that are in force
between the bargaining parties and/or related bodies corporate of
the bargaining parties; and
• submissions made to the arbitral panel by the Commission must
be impartial and contain information about the relevant market
and economic principles.
1.2 The amendments also remove the requirements for digital platform
corporations to give advance notice to registered news media businesses of
changes to an algorithm or internal practice which are likely to have a significant
effect on:
• referral traffic for paywalled covered news content; or
• the distribution of advertising which is directly related to
covered news content.
1.3 The amendments also clarify that digital platform corporations do not
have to give advanced notice of changes to an internal practice which are likely
to have a significant effect on the referral traffic from a designated digital
platform service to covered news content.
1.4 The amendments strengthen the protection for news media businesses
by extending the non-differentiation rules to capture circumstances where a
digital platform differentiates between:
• registered news media businesses or registered news media
businesses and news media businesses which are not registered
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Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code)
Bill 2020
because a news media business corporation is registered under
the Code; or
• news media businesses which are not registered under the Code
because a news media business is eligible to be a registered news
media business or news media business corporation under the
Code; or
• news media businesses which are not registered because a news
media business has applied to be registered under the Code.
1.5 All legislative references in this Chapter are to the Competition and
Consumer Act unless otherwise stated.
Comparison of key features of new law and current law
New law Current law
Responsible digital platform Responsible digital platform
corporations must give notice to corporations must give notice to
news media businesses 14 days news media businesses 14 days
before making a change to an before making a change to an
algorithm which is likely to internal practice or algorithm which
significantly affect referral traffic in is likely to have a significant effect
relation to covered news content. on referral traffic to covered news
content, to paywalled content which
is covered news content and the
distribution of advertising which
directly relates to covered news
content.
Responsible digital platform A responsible digital platform
corporations must not differentiate corporation is not prevented from
between news media businesses differentiating between news media
because a news media business is businesses because a news media
registered, has applied to be business is registered, has applied to
registered, or is eligible to be be registered or is eligible to be
registered, under the Code registered, under the Code.
Submissions can be made by the Submissions can be made by the
Commission to the arbitral panel in Commission to the arbitral panel in
relation to the arbitration about relation to final offers.
factual information and information
about relevant economic principles.
Bargaining parties are to provide the No equivalent.
arbitral panel with information that
is relevant to the arbitration and
relates to contracts between the
bargaining parties when they submit
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News Media and Digital Platforms Mandatory Bargaining Code - Parliamentary Amendments
New law Current law
their final offers.
Detailed explanation of new law
Clarifications relating to the arbitration rules
1.6 The amendments provide that the remuneration amount included in
the final offer of each party, and determined by the arbitral panel, must be
expressed as a lump sum amount. The expression of the remuneration amount as
a lump sum is intended to give each of the bargaining parties certainty about
how much money will be paid in relation to covered news content over the term
of the agreement. [Amendments 13 and 15, paragraphs 52ZX(1)(b) and 52ZX(2)(a)]
1.7 The amendments also clarify that, when the arbitral panel is
considering the cost for the news media businesses of producing covered news
content, the arbitral panel can only consider costs which are reasonable. They
also ensure that each party is given fair treatment in relation to costs by
providing that the arbitral panel must consider the reasonable costs to a digital
platform corporation of making the covered news content available. [Amendment
17, paragraphs 52ZZ(1)(c)-(ca)]
1.8 The amendments clarify that an arbitral determination is to be
consistent with existing rights or obligations under contracts between the
bargaining parties and/or a bargaining party and a related body corporate of the
other bargaining party. If a bargaining party submits to the panel a final offer in
accordance with clause 52ZX(4) of the bill, it must, on the same day that it
submits the final offer to the panel, give the panel information that is relevant to
the arbitration and relates to all contracts that are in force between the parties
(including related bodies corporate of the bargaining parties). The parties are not
obliged to provide the actual contracts. Nor are they required to provide all of
the contracts between the parties. Rather, they are required to provide
information which is relevant to the arbitration relating to contracts between the
parties. In doing this, the parties should consider all contracts between them and,
having done that, determine whether the information to be submitted about those
contracts is relevant to the arbitration. If the information is not relevant, then it
should not be provided. They are not required to disclose information which is
protected from disclosure by a duty of confidence, which might exist as a matter
of law or under a contract. This could include, for example, information relating
to legal advice or where a contract requires commercial information be
confidential between the parties or limited to particular people or entities. If such
a duty of confidence exists between the parties, then they can agree, for the
purposes of the arbitration process, for that information to be provided to the
panel. [Amendments 14 and 16, paragraph 52ZX(1)(c) and section 52ZXA]
1.9 Additionally, the amendments clarify that, if the Commission makes a
submission to the arbitral panel, the submission must be impartial and only
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Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code)
Bill 2020
include factual statements or information about relevant economic principles.
[Amendments 18 and 19, subsections 52ZZC(1)-(1A)]
1.10 Section 52ZQ's title is also amended to make it clear that the section
relates to extending arbitration to cover the remuneration of news media
businesses for situations where the digital platform corporation makes their
covered news content available on another platform service. [Amendment 12, section
52ZQ]
Changes to advance notification requirements
1.11 The amendments clarify that digital platforms are not required to give
news media businesses advance notice of changes to internal practices which are
likely to have a significant effect on referral traffic to covered news content.
This is because a change made to an internal practice will only be able to have a
significant effect on referral traffic if a corresponding change is made to an
algorithm. [Amendments 1 and 2, Section 52S]
1.12 The amendments also remove the requirements for digital platform
services to give news media businesses advanced notice of changes to internal
practices or algorithms which are likely to have a significant effect relating to
paywalled covered news content and the distribution of advertising directly
associated with covered news content. [Amendments 3, 4, 5, 6, 7 and 8, sections 52T,
52U, 52V and 52W]
Strengthening the non-differentiation clause
1.13 The amendments also strengthen the non-differentiation obligations in
section 52ZC of the Bill by extending it to cover situations where in relation to
crawling, ranking, indexing, making available or distributing news media
businesses' covered news content a digital platform corporation differentiates
between:
• registered news media businesses or registered news media
businesses and news media businesses which are not registered
because a news media business corporation is registered under
the Code; or
• news media businesses which are not registered under the Code
because a news media business is eligible to be a registered news
media business or news media business corporation under the
Code; or
• news media business which are not registered because a news
media business has applied to be under the Code. [Amendments 9,
10 and 11, section 52ZC]
1.14 These changes will prevent digital platform corporations from
attempting to circumvent the non-differentiation provisions by engaging in the
relevant conduct before news media businesses have registered under the Code,
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News Media and Digital Platforms Mandatory Bargaining Code - Parliamentary Amendments
while their application to register is being processed, or before a news media
business has notified them that they want to commence bargaining under the
Code. These changes also ensure that digital platform corporations cannot
remove all covered news content from Australian news media businesses from a
service while continuing to make available covered news content from foreign
news media businesses.
Application and transitional provisions
1.15 The Bill as amended will commence on the day after it receives the
Royal Assent.
Corrections to the Explanatory Memorandum
1.16 At the end of paragraph 1.209 insert a new paragraph:
The panel must also consider whether a particular amount of
remuneration would place an undue burden on the commercial
interests of the designated digital platform service. It is intended
that the panel will consider whether a particular amount of
remuneration would place an undue burden on the revenue of a
service's Australian operations as opposed to the global
operations. [Schedule 1, item 1, section 52ZZ]
1.17 At paragraph 1.210, Example 1.7 is omitted and substituted with:
Example 1.7 Panel determination
The Daily Chronicle is a registered news business that is a party to an
arbitration process with a designated platform service named Digiplat.
When assessing both parties' final offers, the panel considers a range
of factors. This includes the benefit that Digiplat provides to the Daily
Chronicle. For example, the Daily Chronicle receives a significant
number of referrals to its website from Digiplat. These referrals
provide considerable benefits to the Daily Chronicle by increasing its
online audience and therefore its potential advertising and subscription
revenue.
The panel also considers the benefits that the Daily Chronicle provides
to Digiplat. In this example, there is meaningful value that is derived
from the Daily Chronicle's content appearing on Digiplat.
The panel also considers the reasonable costs that the Daily Chronicle
incurs in producing relevant content, and the reasonable domestic costs
that Digiplat incurs in making relevant news content available on its
platform.
In addition, the panel considers the extent to which there is a
significant bargaining power imbalance between Australian news
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Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code)
Bill 2020
businesses and the designated digital platform corporation. To do this,
the arbitrator may consider arguments in the final offers about the size
of the benefits to both Digiplat and the Daily Chronicle that may have
occurred in the absence of any bargaining power imbalance.
10
Chapter 2
Statement of Compatibility with Human
Rights
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Treasury Laws Amendment (News Media and Digital Platforms Mandatory
Bargaining Code) Bill 2020
2.1 These Amendments are compatible with the human rights and
freedoms recognised or declared in the international instruments listed in section
3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
2.2 The amendments to Schedule 1 of the Bill clarify that:
• that the remuneration amount in final offers and arbitral
determinations must be expressed as a lump sum;
• arbitral determinations are consistent with rights under contracts
that are in force between the parties;
• at the same time that they submit final offers, parties must
provide the arbitral panel with information relevant to the
arbitration in relation to all relevant contracts that are in force
between the bargaining parties and/or related bodies corporate of
the bargaining parties; and
• submissions made to the arbitral panel by the Commission must
be impartial and contain information about the relevant
economic principles.
2.3 The amendments also remove the requirements for digital platform
corporations to give advanced notice to registered news media businesses of
changes to an algorithm or internal practice which are likely to have a significant
effect on:
• referral traffic for paywalled content which is covered news
content; or
• the distribution of advertising which is directly related to
covered news content.
2.4 The amendments clarify that digital platform corporations do not have
to give advanced notice of changes to an internal practice which are likely to
11
Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code)
Bill 2020
have a significant effect on the referral traffic from a designated digital platform
service in relation to covered news content;
2.5 The amendments strengthen the protection for news media businesses
by extending the non-differentiation rules to capture circumstances where a
digital platform differentiates between:
• registered news media businesses or registered news media
businesses and news media businesses which are not registered
because a news media business corporation is registered under
the Code; or
• news media businesses which are not registered under the Code
because a news media business is eligible to be a registered news
media business or news media business corporation under the
Code; or
• news media business which are not registered because a news
media business has applied to for registration as a news media
business or new media business corporation under the Code.
Human rights implications
2.6 The parliamentary amendments do not engage any of the applicable
rights or freedoms.
Conclusion
2.7 The parliamentary amendments are compatible with human rights as
they do not raise any human rights issues.
2.8 The Bill as amended is compatible with human rights as provided for
in the Explanatory Memorandum to the Bill.
12
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