Rudd misses Rod Sims but scores a direct hit on the Australian media code

Kevin Rudd gave Australian Competition and Consumer Commission (ACCC) chair Rod Sims a hard kick up the backside yesterday in a piece expressing scepticism about the government’s media bargaining code. (For reasons unclear, Rudd’s piece had briefly surfaced on the AFR website last week before rapidly disappearing until yesterday.)

Sims, Rudd suggested, had presided over a significant reduction in media diversity and regional news by allowing News Corp to acquire APN in 2016. “Sims’ experience as an economist is acknowledged,” wrote Rudd, “but he is way out of his depth on the critical question of media diversity. The APN sale wasn’t just about transfer pricing or market capitalisation; it was about preserving the flow of copious, accurate, local information.”

The problem for Rudd is that Sims isn’t paid to look after media diversity or local information. He’s the competition regulator, not the media regulator. There are separate laws covering media diversity administered by the Australian Communications and Media Authority. The ACCC assesses media acquisition and mergers for their impact on actual markets — primarily advertising. It has limited powers to make any other kind of assessment that would prohibit acquisitions.

But the former prime minister makes some good points, especially about the anti-competitive nature of News Corp’s current attack on news wire AAP, the radicalising impact of the far-right Sky News, and particularly about how “Murdoch’s print monopoly remains the feedstock for most broadcast media, telling TV and radio stations which stories are important, and framing the issues”.

That’s particularly relevant to the ABC which often takes its lead from The Australian in political story selection and framing.

In expressing wariness of the proposed media bargaining code, Rudd warns that it would provide an incentive to “produce greater quantities of sensational, less reliable content in pursuit of social media clicks”, thereby degrading journalism.

With all due respect to Rudd, that’s an entire herd of horses that has demolished the stable on the way out already. But he does, more correctly, warn that the code would effectively entrench the market power of News Corp — not merely via the income stream it would get from the tech giants, but via enforced access to algorithmic changes that it would be able to exploit better than smaller competitors.

Rudd’s answer is the royal commission he’s been pushing — with the support of Malcolm Turnbull — into News Corp. But he identifies the bigger policy issue behind the media bargaining code: to what extent will it be used to increase media diversity, and to what extent it will act to reduce it by entrenching the market power of, primarily, News Corp and Nine?

Remember the bargaining code began life as the ACCC’s proposal to level the playing field between the tech giants and media companies — while the regulator explicitly rejected News Corp’s lie that Google and Facebook stole content and therefore deserved compensation. But the code has now — via News Corp — been turned into a mechanism to steal large amounts of revenue from the tech companies.

Unless the revenue derived from the code — possibly in an ameliorated form that addresses the concerns of Google and Facebook and reduces the appeal of the Australian approach for other jurisdictions — is used to enhance media diversity, we risk exactly the problem that Rudd initially identifies: the ACCC’s focus on competition policy in the media sector will be entirely detached from, and even inimical to, the need for greater media diversity.

And to enhance media diversity, the very last thing that should happen to any revenue from Google and Facebook is for it to flow into the coffers of the Murdochs and Nine.