 very interesting session on Australia's law on technology platforms and news publishers background and analysis. Let's have a round of applause while we will be welcoming our esteemed keynote speaker, the Honourable Paul Fletcher MP Australian Parliament. Ladies and gentlemen can we hear a round of applause? After that I'll be introducing him right here please. Thank you. To be here in Delhi to speak of this important conference organised by the Digital News Publishers Association of India. I've been asked to share some lessons from the work of the former Morrison government in Australia as we sought to regulate the impact of the global digital platforms Facebook and Google on the news media sector in our country. At the outset I don't want to give the impression that this was easy. We had some very rocky moments along the way. For example on the 18th of February 2021 we discovered that the Facebook pages of many Australian news organisations had been taken off the air including our major newspapers such as the Australian, the Sydney Morning Herald, the Melbourne Age and the Australian Financial Review. Why did this happen? Because the global management of Facebook strongly objected to the legislation that the Australian government was about to enact to establish what's now known as the news media bargaining code and Facebook's objective was that the Australian government would back down. We did not. Within days all of these Facebook pages were restored. Just a few days later the legislation successfully passed the parliament with strong support across the political spectrum and within a few months Facebook and Google had entered into commercial deals with a substantial number of Australia's news media organisations. So today I want to speak about the problem the news media bargaining code is designed to address. Namely the market power of the global digital platforms Facebook and Google and the corrosive impact this was having on the vibrancy and sustainability of our local news media businesses. Next I want to talk about what we as a government did about the problem and the results we secured and thirdly I want to talk about some reasons as to why our approach in Australia succeeded when many other countries around the world had tried and failed. So let me start then with the problem that the news media bargaining code is designed to address. The remarkable market power of Facebook and Google in the market for digital advertising in every market in which they operate these two companies capture a very large share of digital advertising and the revenue that it brings yet the content which Facebook and Google used to attract to their platforms in which they very successfully monetised with advertising revenue comes from many places including the media businesses with which they compete. So the aim of the code was to solve a serious public policy problem. Google and Facebook were using content generated and paid for by Australian news media businesses but they were not paying for it. When a video clip from a television news service appears in a Facebook feed or a Google search leads to an article on the website of a newspaper that content is helping Facebook and Google to attract people to their platforms and of course these two companies have achieved enormous success. They're two of the world's largest and most profitable companies. Google's parent company for example has a market capitalisation of over one trillion US dollars. The ACCC, our competition regulator, found that Google and Facebook are unavoidable trading partners for Australian news media businesses and this is undoubtedly true in every market around the world in which they operate but in the Australian market as in other markets until our government took action on this issue Facebook and Google simply refused to offer fair remuneration for the use of Australian news media content and whether they should be paying remuneration for that content is a very important question. First and foremost in our view it was a competition policy problem which is why as I'll discuss further we asked our competition regulator, Australian Competition and Consumer Commission to investigate this issue and recommend a solution and I want to highlight that fact because other countries which had sought to address this issue had sought to deal with it as a copyright issue and that did not have the same degree of success. Now I've said that it's first and foremost a competition policy problem but of course it's more than that. It's also a problem of media policy because you need a diverse and vigorous media sector producing high quality journalism but that costs money and that needs to be paid for. In most countries certainly including Australia privately owned media businesses which generate much of their revenue from advertising play a very important role in providing diverse sources of news which are not for example reporting only that that the government would wish to be reported. So the market power of Facebook and Google is a problem not just as a matter of competition policy but also as a matter of media policy. If incumbent news media businesses are losing eyeballs and in turn advertising revenue to Facebook and Google and then they become weaker financially, they employ fewer journalists, stories become shorter and less detailed, investigative journalism is harder to fund, media outlets start to go out of business. That creates a third and related problem. It undermines the very important role that the free and independent media sector play in a liberal democracy. The work of journalists is important in holding governments up to public scrutiny but if the commercial model which sustains the employment of journalists is fundamentally eroded due to unfair competition then that means fewer journalists, reduced scrutiny of government and a material reduction in the effective operation of the democratic system under which nations like Australia and of course India and many other democracies around the world operate. So for all of these reasons, the Australian government under former Prime Minister Scott Morrison was determined to do something about this issue. So let me turn then to what we did. The story goes back to 2017, Mr Morrison was then our treasurer, he had responsibility for our competition regulator and he assigned it with the job of investigating this issue to carry out what was called the digital platforms inquiry. We received the final report from the ACCC in mid 2019 and it examined this issue in great detail, hundreds of pages, it made many recommendations, it found and it may seem tried to make this observation but it found the digital platforms have changed our businesses and people connect. In a given month around 19.2 million people in Australia use Google search, 17.3 million years Facebook. Now these numbers I know are tiny by Indian standards but this is for a country of 25 million people. Of those 25 million people in a month 19.2 million are using Google search. So the ACCC report contained 23 recommendations across a range of issues and one of those recommendations was that there ought to be a code governing negotiations between Facebook and Google on the one hand and the news media businesses on the other. In April of 2020 we announced that we would require that this code be a mandatory obligation on the digital platforms. We asked the ACCC to get on with drafting it as quickly as possible and at the end of July 2020 a draft of the code was released allowing all stakeholders including Google and Facebook the opportunity to comment. That draft went into our parliament or the legislation was introduced into the parliament. The start of December 2020 there was a Senate committee process, our upper house of parliament giving Google and Facebook and other stakeholders another opportunity to put their views have those views considered and by late February 2022 2021 the legislation had been passed and was law. Now what were the results? Multiple commercial deals being done between each of Facebook and Google on the one hand in Australian news media businesses. By October of 2022 Google had reached agreement with 23 news organisations met with 13, a parent of Facebook. At least one of Google's agreements is with a not-for-profit organisation negotiating on behalf of 24 smaller publishers. Now as to the amounts paid by Facebook and Google under these deals there's no authoritative single figure for this. We were clear that the deals could be done on a confidential basis. But there are certainly some strong indications of quite large amounts of money being paid under the deals. One of Australia's largest news media businesses is Seven West Media. It's a listed company. Its deal for example has been reported to be worth around 30 million Australian dollars. Public reporting of the deals announced in the 12 months from February 2021 suggests their value exceeds 150 million Australian dollars. The former chair of the Australian Competition and Consumer Commission produced a report recently for a think tank. He estimated total value of around 200 million Australian dollars flowing under these deals. The agreements are typically for periods of three to five years and there have been a number of announcements by incumbent news media businesses about the way they're using this money to employ more journalists to strengthen their news rooms. I could give many examples but just to mention a couple in early 2022 News Corporation announced it was joining with Google to establish a digital news academy at Melbourne Business School to provide digital skills training for Australian journalists. The Australian Financial Review announced it would hire an additional 18 journalists. The Sydney Morning Herald and the age have been hiring trainees. After a decade or more with a steady drumbeat of redundancies and closures across the Australian media sector no different to the media sector in many other countries this has been a refreshing change. So let me turn then to why in my view we were able to be successful in achieving these outcomes particularly when similar attempts by other governments had not been successful. There were political and policy factors that were important and I want to run through four of them. The first is that there were some misjudgments in my view by Facebook and Google management. A large is a consequence of decisions being made in the US in California and not by the local management teams. It was certainly true that as these companies started to focus on what we were doing in Australia the level of seniority of the executives from these companies we were dealing with started to rise. It was very noticeable and this culminated in several video conferences where at our end the participants were our prime minister our treasurer and me and at the other end the participants included in one case Google's chief executive Sundar Pitschai in another case Facebook chief executive and founder Mark Zuckerberg in a third case Microsoft chief executive Sacha Nadella. I've mentioned in a number of the media interviews I've done that Facebook took this decision to shut down without notice the Facebook pages of Australian news media businesses. It was done in quite a clumsy way and they also ended up shutting down the Facebook pages of police services ambulance in one case a rape crisis center so it was not very effective as a PR move and indeed it ended up cementing some of the political support cross party support for the changes we were seeking to make. Google made in my view a similar misjudgment when they threatened to shut down the Google search service in Australia putting aside how that could actually be done that prompted Microsoft to come out and say they were interested in expanding the Bing search service in Australia and our prime minister was very happy to make himself available quite quickly for a well publicized video conference with Microsoft's global chief executive which are joined and following that Microsoft through their president Brad Smith issued a blog post expressing their support the Australian government's news media bargaining code. Once that happened Google no longer repeated its threat that it would consider shutting down the Google search service in Australia so that brings me to the next factor which was quite important the outcome we got very strong political commitment and direction right from the top of our government our prime minister and our treasurer personally very heavily involved as well as my involvement as communications minister and that was important because we did come under significant pressure from these global digital platforms and particularly when Facebook shut down a whole range of pages that caused a lot of stress to businesses including businesses where that channel where their Facebook page was their major channel of engaging with their customers so you might imagine that there were a number of businesses that were very anxious about this asking how quickly we could get this result so that kind of pressure was certainly present but we did hold our ground because we believe that the policy case for what we were doing is very strong I want to be clear we were very clear at the time the then Australian government I'm sure this is true of the current Australian government very much welcomed the involvement of Google and Facebook and other big American tech businesses in our economy just I might say as we strongly welcome the role of the big Indian tech businesses in our economy Infosys and TCS and many others have strong presence in Australia big employers doing great work and we really welcome that and I might say we are very conscious of the extraordinary achievements of digital India particularly the impressive work that is being done to make digital services available to citizens who five years ago 10 years ago did not have a bank account did not were not connected and the numbers and the achievements in India in terms of using digital technology to drive prosperity and to drive inclusion to bring so many citizens interconnectivity and and to have a bank account these are very very impressive achievements and I can assure you they are being watched closely around the world by many countries to return though to the question of what we did while we welcome businesses from around the world participating in our economy we insisted on the core principle if you want to do business in Australia you must abide by Australian law and of course the Indian government would strongly stand up for the same principle the government of Mexico the government of France whatever country it is this principle is very important that there are decisions that are appropriately decisions for the sovereign governments of individual nations they're not decisions to be made by the management of tech businesses in California or anywhere else now the third fact I want to mention was that we had a careful and methodical process and we took great care to respect property rights I mentioned we started with a very detailed piece of work by our competition regulator several hundred pages ultimately they took nearly two years to do that once we taken our decision we worked through a careful process giving the affected stakeholders including Google and Facebook ample opportunity to invent to examine the draft legislation to get their legal and economic and other advice in the domestic market and to make submissions so their views could be heard and we certainly did modify aspects of the initial draft in response to sensible feedback from the two digital global digital platforms and so that consultation was very important what was also very important was the way the code itself works making sure that affected parties have a fair opportunity to make their case to have their rights and interests properly weighed up before decisions are made and the code clearly sets out the steps that have to occur the criteria that get applied that's very important because our government valued and I know this is true of the current government we've had a change of government last year but it's a bipartisan commitment we value Australia's reputation as a place where global companies are welcome to do business and where the rules which apply are fair and transparent enforced by an efficient court system which is independent of government we emphatically did not want a code which would detract from the reputation what we also did not want was Australian government officials getting involved in detailed price setting processes what we wanted the code to do was to incent market participants that is Google and Facebook on the one hand and news media businesses on the other to do commercial deals our aim was to regulate just enough to get the parties to the table to conduct the commercial negotiations that would have happened naturally were it not for the extraordinary market power of Google and Facebook so just in the last part of my remarks I want to come then to the specific policy mechanisms used in the code which we designed very carefully and this was a key reason I believe why we had some success with our approach in Australia as distinct from the way that other countries have in a number of instances sought to tackle this problem a starting point was to use some well proven policy tools that are widely used or extensively used in competition policy in Australia one of them is this idea of a code which regulates or governs the particular commercial conduct in a particular industry and that is a tool that we've used in competition policy for many years another related tool is the so-called negotiate arbitrate model which applies in several industries in Australia certainly in the telecommunications industry that's been in the legislation for more than 20 years applied by enforced by the competition regulator now the way the code works is it establishes two key categories of business the first is a registered Australian news media business if a business meets certain criteria and that includes things like the independence of journalism so it can't be a PR agency or anything like that but if a business meets those criteria then our media regulator the Australian Competition of Media Authority can make a decision to register such a business under the code and to date 34 businesses have been registered as news media businesses second category is a designated digital platform which is the category within which Facebook, Google and potentially other businesses can be subject to the core of the code is that registered news media businesses can commence a negotiating process with a designated digital platform and if they don't get a satisfactory outcome after a specific period three months then provisions of the code can be triggered under which first there's mediation but again if that doesn't succeed there can be a compulsory arbitration process and that arbitration process can set the commercial terms under which Google and Facebook are required to pay the news media business for the use of that businesses content now we've also very consciously put into the code that a news media business and a platform can enter into a contract which sets out terms which specifically exclude the operation of the code so when you put all this together what the code does by design is to establish strong incentives for Facebook and Google to do commercial deals with news media businesses by doing this they can avoid the risk of the matter being referred to arbitration and potentially having the arbitrator set terms they do not like now I mentioned to date we've had 34 news media businesses registered and a very substantial number of deals have been done but what you may be surprised to know is that so far neither Facebook nor Google have actually been designated under the code now the code says it's the Treasurer who has the power to designate there's some criteria that the Treasurer applies one of those is whether the platform has already entered into deals and again this is all about having specifically designed this code to give Google and Facebook strong incentives to do commercial deals if they do do a commercial deal then they can avoid terms being set for them by the arbitrator and secondly they make it less like they get designated in the future if Google and Facebook had refused to come to the bargaining table there's no doubt in my mind that by now they would have been designated under the code but we very carefully designed this to get the outcome that we most wanted which was for Facebook and Google to come to the bargaining table and to do the deals that in the absence of their substantial degree of market power they would already have been doing and there are in my view very good reasons for preferring rapid commercial deals to a formal regulatory process as well as speed it's much more likely that a commercial deal negotiated by well informed executives from both businesses will deliver outcomes that are in fact commercially useful on both sides and informally that's been the feedback I've heard from both sides the negotiating process has been effective in identifying value-creating opportunities for the content generated by Australian news media businesses to be distributed more effectively across the digital platforms so let me conclude by returning to the point at which I started the problem of news media businesses under intense competitive pressure from the global digital platforms facing shrinking revenues and profits and in turn being forced to reduce the extent and quality of their journalism which of course in turn further reduces the appeal and hence the profitability of the product creating a self-reinforcing downward spiral as I've sought to explain the former Morrison Liberal National Government in Australia set out to tackle this problem in a careful way which involved just enough regulation to get the market outcome we wanted namely fair commercial agreements between Australian news media businesses and the global digital platforms there has been interest shown in our approach from a number of countries around the world I emphasise as I've already said publicly I am not here to say this is what India should do that of course is a matter for the Indian Government it's a matter for the media sector here the digital sector here these are decisions to be made through your domestic processes I'm simply here to share what our experience was and the outcomes that we've achieved which I believe have been rapid and have been practical and I close by referring you to a review that was done by our Treasury Department it reported publicly late last year which examined what had occurred this was put into the legislation there would need to be a review after a year the review was carried out and found that this has been a successful policy tool which has worked well so thank you very much for the opportunity to share with you a little bit of our experience in Australia