The Fair Digital News Bargaining Bill

Why the Bill is a bad idea and an Alternative Solution to assist Mainstream Media

I wrote about regulation and the digital space in an article entitled “Regulation in the Digital Space”. In that article I advanced reasons why the Fair Digital News Bargaining Bill was a bad idea and I proposed an alternative.

I took the opportunity to make a short submission to the Economic Development, Science and Innovation Select Committee on the Bill. A copy of that submission is as follows:

“My name is David John Harvey. I am a retired District Court Judge and currently hold a practising certificate as a barrister. I hold LLB (Auckland), MJur (Waikato) and PhD Degrees (Auckland).

In addition to my judicial duties I taught an undergraduate course in Law and Information Technology at the Faculty of Law, University of Auckland from 2000 2018. I was the Director of the New Zealand Centre for ICT Law from 2016 2018. I co-taught a Masters course in Media Law in 2018. I am the author of internet.law.nz selected issues for the Digital Paradigm now in its 5th edition. I have also authored Collisions in the Digital Paradigm Law and Rulemaking in the Internet Age and co-authored New Zealand Media and Entertainment Law. I have expertise in Internet Law, Online Regulatory structures and media law.

I consider that this Bill is ill-conceived. It is a means of subsidizing mainstream media (MSM) which is having difficulty in adapting its business model to the Digital Paradigm. The movie and music industries have done so with a large degree of success.

The various initiatives and subsidies undertaken by the State - primarily in the form of the Public Interest Journalism Fund - have provided artificial support for MSM. Those subsidies have provided a disincentive for MSM to adapt to the Digitalk Information Paradigm in a more agile manner.

What the Bill proposes is a substitution of one subsidization scheme for another. The new subsidy is to be provided by Online Platforms which "free ride" on content produced by MSM but which, with a few exceptions, do not compensate MSM for the use of their content.

To set up a completely new regulatory body with the Broadcasting Standards Authority as the "independent" regulator is unnecessary. In addition the proposed "negotiating" scheme is compulsory and thereby impinges upon the bargaining freedom that might normally take place within the context of a commercial transaction.

More importantly the MSM subsidy that is to be the objective of the system is for the use of content and the proposed pseudo-commercial framework of compelled bargaining overlooks a fundamental reality of what is happening.

In the main the Platforms are aggregating news content from MSM outlets. They are scraping headlines and snippets from MSM websites and sources, bringing them together and presenting them to the public. In doing so they are able to derive revenue from this activity. If one looks at Google News, the information provided is in the form of a number of stories and links to the originating site. The user accesses the MSM site if one wishes to read the story in full. Thus the

MSM site would still benefit from any revenue as a result of that access.

But in the process of aggregation the Platforms are, as I have said, "free riding" on content produced by MSM and copying aspects of that content on the aggregating website. The focus of any remedy should be in the area of intellectual property and copyright rather than by some inchoate compelled negotiating process.

If a copyright solution is adopted - and I offer that solution as a recommendation - it will have the effect of eliminating State agencies from the compensation process for the use of MSM content and would eliminate the very unfortunate optics that have been allowed to develop during the Public Interest Journalism Fund subsidy. Although it may not be a matter of fact, as a matter of perception it appears that MSM has been brought and sold by the State resulting in a very low level of trust in MSM.

By eliminating the State from the equation the negative perception of State supported or subsidized MSM would no longer be present and compensation arrangements would remove the suggestion of State involvement in the process.

The Cabinet Papers and background information to this proposal reject a copyright solution. That is because the only solution considered was one employed by the EU whose Copyright Directives differ from our Copyright Act 1993. Clearly other possible remedies available in the Copyright Act were not considered, suggesting a narrow focus on the part of officials making the recommendations.

My proposal is that this Bill be abandoned and the provisions of the Copyright Act be tidied up to provide a proper compensation to MSM for the use of their content by Platforms

Recommendations

The dismissal of a copyright option overlooks the provisions of Part 8 of the Copyright Act 1993 which provides for copyright licensing schemes. This has been in existence for some time and does not require a neighbouring right which is what was part of the EU solution, but rather platforms should obtain and pay for a licence to aggregate content from an organization representing MSM providers and which would distribute the payments proportionately.

This arrangement would remove any State involvement from the equation, would locate the rights and remedies within the existing area of law where they belong copyright and intellectual property and avoid the unfortunate optics of a State endorsed scheme to prop up and subsidise MSM.

A licensing body already exists in the form of the Media Copyright Agency which is in the business of providing licenses to organisations who copy, store and distribute newspaper, magazine and news website content so that they can do so legally.

The only possible statutory change that might be required would be to bring the aggregation of content and the provision of snippets within the licensing scheme.

By obtaining a licence from the MCA, organisations can protect themselves from non-compliance risks and possible infringement proceedings and gain the right to copy articles from most majorNew Zealand news media publications.

This would effectively achieve the same goals as sought in the Bill without the involvement of a State agency. It would ensure that "free riding" would end and proper compensation would be paid to MSM for use of its content. In addition it would mean that the use of MSM content without a licence would allow MSM to seek damages from a platform as compensation.

Those are my submissions and recommendations.”

All of the submissions that were filed can be found in the Parliament website here.

I had five minutes to speak to those submissions via Zoom on the morning of 15 February. I listened to submissions from other organisations. Those put forward by MSM organisations told a tale of woe about the decline of viability of MSM outlets and the free riding by the large platforms.

I did not stay online to hear all the submissions but I understand that Sinead Boucher of Stuff was dismissive of my suggestions.

The Brainbox Institute reported on the proceedings in an article entitled “Will a new media bill save the New Zealand News Media from Extinction.” In that article the following observations were made about the Stuff approach to the copyright suggestion.

“However, some newsroom executives dismissed this as an option. In her submission as President of the News Publishers’ Association, Sinead Boucher said the Copyright Act was not a viable option for New Zealand newsrooms dealing with this issue, as it “plunged people into endless litigation with the biggest media companies in the world."

Another reason for newsrooms’ hesitancy to pursue this in the courts is probably because it’s unclear whether a case would actually succeed.”

That critique is not apparent from Stuff’s written submission.

Clearly Ms Boucher misunderstands (or misstates) the position. I was not proposing that Copyright law in and of itself provided a solution. If that is her understanding she clearly has not read my submission nor listened to the very clear oral remarks I made about copyright licensing to the Select Committee. The reality is that the provisions of Part 8 of the Copyright Act provided for a licensing scheme which would allow for the compensation of members of the scheme for the use of their content. It would not involve taking Google and Facebook to court for every infringement of their material.

Lest it be thought that I was out on a limb making this suggestion after the Select Committee hearings I came across a post by a lawyer named Ken Moon who is a leading copyright lawyer both nationally and internationally and is a known expert in this field. Mr Moon and I have had our differences of opinion about early issues of copyright and the Digital Paradigm but on this occasion he has reached a similar conclusion to mine.

Writing in Lexology for 14 February 2024, Mr Moon states:

Issues with the methodology of the Bill

Firstly, and rather surprisingly, the Bill does not take into account copyright law which has long been in existence. Even in New Zealand the news media has had legal rights in its news articles for over a century. These are conferred by copyright legislation; currently the Copyright Act 1994. The Act confirms that copyright is a property right; thus, a news article is property owned by the publisher. However, the Bill does not even mention the fundamental legal rights provided to publishers by existing copyright law.

Secondly, the Bill, if it is really needed as separate legislation, should have the purpose of providing commercially appropriate procedures for collective licensing of copyright which suit the "new" online environment, which has rendered long-established copyright licensing practices unsuitable. For example, through the use of collective licensing societies to whom copyright owners assign selected rights to their works and who then, on behalf of the owners, grant licences to potential users of the rights. These societies can be easily accessed by users seeking the licences they need. In relation to musical works the Australasian Performing Rights Association (APRA) is a well-known example. However, for some uses, such as on the internet, there are no relevant collective societies in existence.

Finally, the biggest current issue is not addressed at all in the Bill. This is the complex situation where news articles are copied and uploaded into the "learning" databases of generative AI companies like OpenAI’s ChatGPT.

An alternative approach

Rather than have separate legislation, the function of licensing of copyright works for use as internet content could simply be added to the Copyright Act. Indeed, since the Act is currently under review, there is a prime opportunity for this issue to be addressed by inclusion in the new Act and its Regulations.

This was the approach taken by the European Union in their 2019 Directive to ensure "a well-functioning marketplace for copyright". The EU’s objective was to reduce the value gap between profits made by the internet platforms and content creators, by encouraging collaboration between these two groups. Further, a specific term in the EU Directive required internet platforms that hosted user-generated content to employ measures to prevent their users from violating copyright. While some of the EU provisions have proved controversial, they were provided in the context of copyright law, not some newly invented commercial law which ignores the existence of long-established copyright law and practice.

This I would suggest provides an answer to Ms Boucher’s ill-informed and rather knee-jerk response to the Copyright solution.

It will be interesting to see hoe the Fair Digital News Bargaining Bill fares. There are no guarantees that it will proceed beyond the Select Committee stage and my view is that it should not. Perhaps the Copyright Act solution that I advocate and that is also suggested by Mr Moon could be examined and be the subject of alternative legislation.

Because the problem is the free riding of MSM content by platforms like Google and Facebook the solution lies in the area of copyright and intellectual property. What is proposed by the Bill – which was introduced by Labour which is no surprise – is a bureaucracy to determine by what means and by how much the large digital platforms will subsidise MSM.

Reading the MSM submissions and listening to some of the oral presentations was somewhat depressing. But then, of course MSM would paint a gloomy picture. Who would not when there is a pot of gold at the end of the legislative rainbow.

Perhaps MSM should address the issue of why it is that public confidence in the news media is at an all time low rather than seeking yet another hand-out.

To close, a submission was made by the Free Speech Union. At the end of the submission the Hon Willie Jackson expressed his sadness at the submission that had opposed the Bill. The quick and very sharp riposte from FSU CEO Jonathan Ayling was “We are not here to make you happy, Willie.” Isn’t it grant to live in a democracy!