An industry goes to the ACCC.
“I got good news and I got bad news,” says the ACCC.
“Gimme the bad news first,” says the industry.
“Well,” says the ACCC, “you got six months to live. But the good news is, I’ve recommended the government think about subsidising you a bit more.”
Throughout the sixty dense pages of the ACCC’s Digital Platforms preliminary report devoted to the media and journalism, the competition regulator builds from first principles the case for why journalism — particularly quality journalism — is an unusual business model, how it has been affected by the shift in advertising revenue online, and how that has led to fewer journalists.
Numbers are down 20% in print/online publications between 2014 and 2017 alone; in regional areas, the decline since 2006, off a lower base, has been even worse. As a diagnosis of the state of journalism in Australia, the report is rich and detailed, based on both data collated by the ACCC and provided by media companies, who naturally were reluctant to identify themselves.
But what, exactly, is the ACCC doing looking at journalism? It is the competition, not the media, regulator; media-specific issues like diversity interact with competition, though they’re not the same thing. Nor is it the government’s independent policy thinktank, the Productivity Commission. There is a good basis for the ACCC to be investigating the market dominance of the digital giants, but why does it devote so much effort to examining journalism?
Because journalism, the regulator believes, is special: “news and journalism provide significant contributions to the public interest. Plurality of editorial voices contributes to the public interest. News and journalism risk under-provision for a number of reasons, including the public nature of news and information and the general inability of commercial news media businesses to monetise societal benefits of journalism.”
And the dominance of the digital giants is increasing the risks of under-provision, to put it mildly.
This isn’t entirely outside the remit of the ACCC, which is consumer welfare, but this is not natural territory for the competition body. That may be why it felt the need to traverse ground much covered in other reports and reviews of recent years; it may also be why its proposed remedies are so limited. Its suggestions — bearing in mind this is a preliminary report — are confined to increasing the tax deductibility of costs associated with producing journalism, making the costs of news consumption tax deductible, and more direct government support via programs such as the regional and small publishers scheme set up by the government to help pass its media ownership changes.
Tax deductibility of media company costs only works if the company is profitable, or cross-subsidises its journalism in a way that makes, say, a 150% deduction valuable. Making a subscription to Crikey or News Corp or the Financial Review tax deductible is only fiddling at the margins; it’s not that people can’t afford to pay for news, it’s just that they don’t.
The ACCC is also strangely reluctant to press an issue you’d think was much more in its wheelhouse: the Daily Mail’s constant theft of stories from other outlets. “The fair use provisions in copyright law have been interpreted variously by media outlets,” it says. “Arguably, the internet and related technologies have allowed media outlets to exploit fair use to a much greater degree than had previously been the case.”
Nothing to read here, then. Instead, the problem is that Google can’t adequately distinguish the original story from the Daily Mail rewrite in its search engine results, and it is probably impossible to do that anyway. It’s all too hard, the ACCC says, washing its hand of the whole business.
Also mentioned less than you’d expect are the ABC and SBS. These are two expressions of societal concern about the importance of journalism, though the ACCC, ostensibly concerned about under-provision of the latter, makes no mention of the government’s constant cuts to ABC funding, and political interference, which have directly led to under-provision of national broadcaster journalism. On the other hand, nor does it suggest the ABC and SBS somehow worsen the problem by competing with commercial media outlets — a key argument by commercial media companies like News Corp and Nine for legislative constraints and funding cuts to be imposed on the national broadcasters.
It’s an interesting omission at a time when a key Liberal party assault on the ABC and SBS — its Competitive Neutrality of the National Broadcasters inquiry — is still lumbering away trying to find an excuse to punish the broadcasters.