New Zealand’s Commerce Commission has granted provisional authorisation to the country’s Newspaper Publishers’ Association (NPA) to begin collective bargaining with Google and Meta. The original application was filed in November, and provisional authorisation was granted in April.
Membership in NPA has rapidly increased since November, when it represented about 50 daily and community newspapers in New Zealand, according to Reuters, to 28 publishers representing about 100 titles in April when the NPA also announced that it had hired two Australian news executives experienced in negotiating successfully with Big Tech.
That growth roughly coincides with the NPA’s bold move to gain, first, provisional authorisation — and now, authorisation — for collective bargaining rights for independent news publishers over the terms on which their content appears on Google and Facebook.
The NPA says on its Web site that it “champions the news media industry of New Zealand and represents members’ interests in areas such as government affairs, media regulation, and public funding of journalism.”
Yet not all NPA members are taking the collective bargaining path.
New Zealand Media & Entertainment (NZME) owns the New Zealand Herald, radio stations Newstalk ZB and BusinessDesk, and five regional daily newspapers. It negotiated directly with the Google and Meta and signed a deal in April with Meta to “provide funding to support NZME’s ‘subscriber growth and retention,’” an article in the Herald reported. It confirmed in a June 22 brief that it had inked an agreement with Google “to support digital transformation” and “supply content to Google News Showcase when it officially launches in New Zealand.”
NZME expects to see an additional NZ$5 million in revenue from the deals year over year in 2023 — roughly a 7% increase.
The application: Seeking collective bargaining for independent media
In November, the NPA filed an application with the country’s Commerce Commission on behalf of New Zealand independent media. The application seeks approval for an initiative that should assist in achieving fairer remuneration that will support sustainability, viability, and diversity of New Zealand journalism, an NPA brief explained.
“The application is being made on an opt-in basis, with it open for NPA members, and other independent New Zealand-owned media organisations, to choose to participate in the collective bargaining group should it be approved by the Commerce Commission. The NPA invites any independent New Zealand-owned media organisation to register their interest in joining this should it be approved,” said Brook Cameron, the NPA’s general manager in the November brief.
“While New Zealand media companies are investing in Kiwi journalism, Google and Facebook use journalists’ content for free, pay very little tax in New Zealand, consume the vast majority of available digital advertising spend in New Zealand, and less than $0.10 in every dollar spent on digital advertising in New Zealand goes to New Zealand news producers that invest in producing journalism and news content,” Cameron said.
“It’s a lose, lose, lose for New Zealand,” Cameron continued. “Together (Google and Meta) have revenue that is greater than New Zealand’s GDP. New Zealand businesses face a huge power imbalance in trying to negotiate with them to pay fairly for Kiwi journalists’ content.”
“We are seeking an avenue to negotiate for fair payment, in the same way that media organisations in Australia have been provided the ability to negotiate with the digital platforms,” Cameron said at the time the provisional authorisation was granted in April.
Commerce Commission weighs in
The Commerce Commission, in a brief on its provisional authorization, said the NPA is allowed “to commence collective bargaining while the Commission continues to consider their authorisation application and reach a concluded view on whether the conduct should be authorised. The Commission’s decision to grant provisional authorisation should not be taken as an indication that it is likely to grant or decline the application for authorisation.”
It said that in assessing the evidence available at this time, in particular, it “recognises the likely benefits associated with the collective negotiation in this case, and that there is value in realising those benefits sooner rather than later.”
The commission agreed with the logic in the NPA’s November application:
“The likely benefits of collective negotiation include the potential for participating news media companies to pool their resources and reduce the transaction costs of negotiation. Collective negotiation may also put smaller media companies in a better position to negotiate with Google and Meta than might otherwise be the case. The commission also considers that allowing this provisional arrangement is unlikely to materially alter the market in a permanent way.”
Stuff, an NPA member supporting collective bargaining, wrote in a December article that the Commerce Commission had to consult on whether collective negotiations could lessen competition in the market and whether it had jurisdiction to authorise the arrangement.
The Commission may grant authorisation under sections 58 or 65AA of the Commerce Act 1986 for agreements that may otherwise breach the act if it is satisfied that the agreement will in all the circumstances result, or be likely to result, in such a benefit to the public that the conduct should be permitted. The NPA seeks authorisation for a period of 10 years. The provisional authorisation will be “in force until the authorisation is granted, declined, revoked, or withdrawn,” the Commission wrote in April. It may be granted in part or in full.
Legislation? Maybe. Maybe not.
The Commission also said it would consider the likelihood that the companies would be supported by public funding in the long term — and the likelihood that a bargaining code similar to Australia’s would be enacted that could enable the companies to successfully enter into agreements with the digital platforms with outcomes that were reasonably comparable to the proposed arrangement.
The New Zealand government is a constitutional monarchy, with a queen and parliament. Ministers must first be elected members of the House of Representatives. They bring proposed laws to Parliament and decide which policies get put into practice by government departments, according to a government Web site.
Government leaders — including the prime minister, the former and current ministers of broadcasting, communications, and digital media, as well as the culture and heritage ministry – have made supportive statements either encouraging social media to take a responsible social role or in favour of collective bargaining.
New Zealand Prime Minister Jacinda Ardern called social media in general to a responsible social role in her May commencement address at Harvard University, as reported in The Harvard Gazette: “The time has come for social media companies and other online providers to recognize their power and to act on it,” she said.
Former Minister of Broadcasting, Communications and Digital Media Kris Faafoi, who resigned from politics in June, wrote to the Commerce Commission in support of NPA’s application in February, intimating that the government may consider Australia-style legislation in the future, Press Gazette wrote in March.
NZME’s Newsroom quoted one briefing to Faafoi, which said: “News content has value that often goes beyond a purely monetary relationship, and this is often reflected in the wider role that media plays in a democratic society. Supporting media organisations in achieving ongoing commercial arrangements is therefore warranted. We consider commencing work on a bargaining code is the most effective option to support deals.”
Faafoi was replaced by Willie Jackson, who has signaled his continued support, writing in the New Zealand Herald (as reported in its subsidiary Newsroom): “Another area I’m actively exploring is how the government can support news media to realise the value of the content they produce, particularly in relation to the use of that content by digital platforms like Google and Facebook.
“The bargaining imbalance between these platforms and our news media does not lend itself to fair negotiation or payment,” Jackson continued. “While some commercial arrangements have been reached with larger news media companies, I am considering how the government can support the whole sector so that fair recognition is given. Too many businesses are hurting and something must be done to rectify the situation.”
The Manatū Taonga Ministry for Culture and Heritage said in its submission to the commission: “Financial agreements for news media content are primarily a commercial matter … . News content has value best determined by the market. However, due to the lack of progress in commercial discussions, Manatū Taonga is considering options to support New Zealand media companies to reach commercial arrangements with digital platforms, should financial compensation not materialise through negotiations. The development of government regulation is time-consuming and requires considerable public funding and resources. Developing effective regulatory solutions commonly takes years.”
New Zealand and Australia: “One big economy”
Spinoff, which formed a partnership with Stuff in late June, had a “bespoke commercial deal” with Meta as of February, according to the platform’s submission. It is one publication that is not an NPA member but is part of the application to the Commerce Commission.
Duncan Greive, founder and publisher, notes that the situation in Australia, where many publishers have already signed licensing deals with Google and Facebook, has created a competitive issue for the Kiwi media.
“Why we’re doing this now is because of what happened in Australia earlier this year,” he told the UK’s Press Gazette in December. “There is a close economic relationship between New Zealand and Australia. We share a huge amount both culturally as well as legally. Fundamentally, there are half a million New Zealanders, equivalent to 10% of our population, who live in Australia.”
He suggests the tech companies would like what happened in Australia to be unique to Australia. “But you can't do that. You can’t do that to a much bigger economy that is so closely linked to ours, pour hundreds of millions of dollars into it, and not expect that to have an impact here.
“Some of the people who got those settlements … are literally on the ground here,” Grieve continued. “They have small but growing teams and are actively selling memberships and audiences here. So the idea that this is a microcosm off to the side, and has no relationship to New Zealand, just doesn’t stand up. Australia and New Zealand are basically one big economy. You can’t just do it for those six states and then just not do it for New Zealand.”
Greive is confident that New Zealand, and others, will eventually pass legislation similar to Australia’s news media bargaining code. “I think it's inevitable,” he said to Press Gazette, “It's coming everywhere. We have a long history of looking at Australian legislation and saying something much like that could be created here.”
Big Tech response to the NPA’s application
Both Google and Meta weighed in against the move toward New Zealand collective bargaining:
- Google said in its submission to the commission: “We remain concerned that collective bargaining with a diverse group like that contemplated by the NPA’s application may reduce our ability to tailor our offering to the capabilities and needs of individual news business.”
- Meta takes the position in its submission that numerous commercial deals have taken place between it and New Zealand media without collective bargaining. “Any claimed benefits of the proposed conduct must be measured against this baseline of Meta’s commercial engagements and investments that support individual publishers, and public interest journalism overall. The ‘counterfactual’ comparison is not, as the Application appears to suggest, collective negotiation or no commercial engagement.”
The provisional authorisation decision came relatively quickly — from November to April. But no date has been set for the New Zealand commission to render its final decision. Until that time at least, the NPA has gained the right to represent independent media in collective bargaining with Big Tech on an opt-in basis.
Some government leaders consider Australian-style bargaining a real possibility, while Google and Meta continue to hold their positions.