Fair Digital News Bargaining Bill

2.1. Are there any publicly available inquiry, review or evaluation reports that have informed, or are relevant to, the policy to be given effect by this Bill?

YES

Digital Platforms Inquiry, Australian Competition and Consumer Commission, June 2019 (https://www.accc.gov.au/system/files/Digital%20platforms%20inquiry%20-%20final%20report.pdf)

Review of the News Media and Digital Platforms Mandatory Bargaining Code, Australian Treasury, April 2022 (https://treasury.gov.au/sites/default/files/2022-04/c2022-264356_0.pdf)

News Publishers’ Association of New Zealand Incorporated – Authorisation Final Determination, Commerce Commission of New Zealand, November 2022 (https://comcom.govt.nz/__data/assets/pdf_file/0025/306772/2022-NZCC-35-News-Publishers-Association-of-New-Zealand-Incorporated-Authorisation-Final-Determination-2-November-2022.pdf)

2.2. Does this Bill seek to give effect to New Zealand action in relation to an international treaty?

NO

2.3. Were any regulatory impact statements provided to inform the policy decisions that led to this Bill?

YES

Regulatory Impact Statement: Recognising news media’s value in a digital environment, Manatū Taonga Ministry for Culture and Heritage, 17 August 2022 (https://mch.govt.nz/sites/default/files/projects/cab-rel-online-news-151222.pdf)  

2.3.1. If so, did the RIA Team in the Treasury provide an independent opinion on the quality of any of these regulatory impact statements?

NO

The RIS did not meet the threshold for RIA Team assessment.

2.3.2. Are there aspects of the policy to be given effect by this Bill that were not addressed by, or that now vary materially from, the policy options analysed in these regulatory impact statements?

NO

2.4. Has further impact analysis become available for any aspects of the policy to be given effect by this Bill?

NO

2.5. For the policy to be given effect by this Bill, is there analysis available on:

(a)   the size of the potential costs and benefits?

YES

(b)   the potential for any group of persons to suffer a substantial unavoidable loss of income or wealth?

NO

Regulatory Impact Statement: Recognising news media’s value in a digital environment, Manatū Taonga Ministry for Culture and Heritage, 17 August 2022 (https://mch.govt.nz/sites/default/files/projects/cab-rel-online-news-151222.pdf)  

2.6. For the policy to be given effect by this Bill, are the potential costs or benefits likely to be impacted by:

(a)   the level of effective compliance or non-compliance with applicable obligations or standards?

YES

(b)   the nature and level of regulator effort put into encouraging or securing compliance?

YES

Regulatory Impact Statement: Recognising news media’s value in a digital environment, Manatū Taonga Ministry for Culture and Heritage, 17 August 2022 (https://mch.govt.nz/sites/default/files/projects/cab-rel-online-news-151222.pdf)  

3.1. What steps have been taken to determine whether the policy to be given effect by this Bill is consistent with New Zealand’s international obligations?

Upon examination of the Ministry of Foreign Affairs and Trade’s Treaties Register Database, Manatū Taonga considers the Fair Digital News Bargaining Bill is unlikely to be inconsistent with New Zealand’s international obligations.

3.2. What steps have been taken to determine whether the policy to be given effect by this Bill is consistent with the principles of the Treaty of Waitangi?

Manatū Taonga has consulted with both Te Arawhiti and Te Puni Kōkiri on the policy development and the drafting of the Bill. Both agencies are supportive of the legislation and understood the value the Bill could provide Māori news media entities, which are often overlooked despite being an important source of Māori current affairs and storytelling, both of which can be recognised as taonga requiring enhanced duty of care by the government. We asked both agencies during the drafting process how the Bill could better ensure Māori interests could be incorporated into the legislation’s framework which included increased prominence for Māori news content within the definition of “news content”, requiring voluntary deals to be struck with Māori news media entities for a digital platform to be eligible for an exemption, and requiring the Broadcasting Standards Authority (BSA) to include how the Bill is improving outcomes for Māori news media entities within their annual reporting.

Manatū Taonga has engaged with Māori media including Whakaata Māori and E-Tangata. These media entities were wary of engaging with digital platforms due to the bargaining power imbalance and were keen to protect their taonga, feedback which supported the collective bargaining clause to ensure Māori media were not left on their own, and the clause on respecting cultural backgrounds during negotiations.  

Manatū Taonga considers these additions enhance the operation of the legislation and ensures consistency with Te Tiriti o Waitangi principles.

3.3. Has advice been provided to the Attorney-General on whether any provisions of this Bill appear to limit any of the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990?

YES

The Ministry of Justice’s (MOJ) New Zealand Bill of Rights Act 1990 (NZBORA) vetting team was engaged on the Fair Digital News Bargaining Bill. The advice we received indicated that there were no unjust limitations on the NZBORA arising from the Bill.

3.4. Does this Bill create, amend, or remove:

(a)   offences or penalties (including infringement offences or penalties and civil pecuniary penalty regimes)?

YES

(b)   the jurisdiction of a court or tribunal (including rights to judicial review or rights of appeal)?

NO

Criminal offences

·                     Clause 111 “Offences relating to information-gathering powers and misleading or deceiving Authority”

Clause 111 was considered necessary to ensure that the proposed new information gathering tools would have sufficient penalties for non-compliance. A failure to provide information when required to do so, or presenting false information that may alter the legislation’s application or substantively change how an arbitration decision is made, significantly undermines the Bill. The mischief clause 111 is seeking to penalise are analogous to obstruction of similar competition regulators, such as the Commerce Commission and Financial Markets Authority, and was considered necessary to ensure the BSA could effectively oversee the framework.

Civil penalties

·                     Clauses 84 – 86 “Undertakings”: enables the BSA to accept an undertaking to pay compensation to avoid, remedy, or mitigate any actual or likely adverse effects arising from a contravention.

·                     Clauses 87 – 89 “Corrective notices”: enables the BSA to issue notices if a person has, is likely to, has attempted to, or has been involved in a contravention of the legislation. The notice may require the person to take steps to avoid, remedy, or mitigate any effects arising from a contravention, ensure that a contravention is not repeated, or ensure a contravention does not occur.

·                     Clauses 90 – 93 “Warnings”: enables the BSA to issue a warning about any matter relating to a person under the Bill and may require the warning be prominently disclosed.

·                     Clauses 95 – 99 “Pecuniary penalties”: enables the BSA to apply to the High Court for a pecuniary penalty order if the court is satisfied the person has, attempted to, or been involved in, a contravention of a civil liability provision. Pecuniary penalties under the Bill have been separated into tiers that reflect the severity of the contravention with proportionate penalties.

·                     Clauses 100 – 103 “Injunctions”: enables the BSA to apply to the High Court for an order restraining a person from engaging or continuing to engage in conduct that does or may constitute a contravention. The injunctive order may also require a person to do an act or a thing if refusal or failure to do so would be a contravention of legislation.

Civil penalties were considered necessary to generally ensure compliance with the Bill and prevent harm from occurring through contravention. Manatū Taonga has adopted a graduated response model for the BSA to manage unlawful behaviour under the Bill. We consider this approach enables the BSA to be flexible in how it approaches non-compliance and has the tools to incentivise positive behavioural change without requiring pecuniary penalties as a first measure.

3.4.1. Was the Ministry of Justice consulted about these provisions?

YES

MOJ was consulted on the appropriateness and quantum of the suggested civil and criminal penalties with the Bill. MOJ was supportive of the Bill’s graduated response model as a way of ensuring compliance with the Bill without relying solely on pecuniary penalties. MOJ also queried whether the quantum for pecuniary penalties was set at the right level, considering fines for similar behaviour in other legislation were set at a lower level.

Manatū Taonga clarified that the high level of fines was considered appropriate given the substantive resources available to parties that may be captured by the Bill. It was essential that penalties under the Bill were both proportionate to the mischief being penalised as well as sufficiently dissuasive to prevent parties from paying fines to circumvent their obligations.

3.5. Does this Bill create, amend or remove any provisions relating to the collection, storage, access to, correction of, use or disclosure of personal information?

YES

Part 4 empowers the BSA to obtain or share information where it is necessary or desirable to fulfil their obligations under the Bill. Although Manatū Taonga considers information obtained or shared under Part 4 to primarily include commercial information, there is scope for personal information to be included. Manatū Taonga considers Part 4 does not detract from, or limit, the Privacy Act 2020 or its Information Privacy Principles (IPPs). The Bill reaffirms the Privacy Act’s IPPs by ensuring that personal information is only collected and shared where there is a lawful purpose that is connected with the BSA’s statutory functions. The Office of the Privacy Commissioner has been consulted on the Bill.

3.6. Has there been any external consultation on the policy to be given effect by this Bill, or on a draft of this Bill?

YES

Manatū Taonga has undertaken consultation with news media entities, digital platforms, mediation/arbitration experts, and international likeminded partners on the Fair Digital News Bargaining Bill. The feedback from stakeholder is summarised at Appendix 1.

3.7. Have the policy details to be given effect by this Bill been otherwise tested or assessed in any way to ensure the Bill’s provisions are workable and complete?

NO

4.1. Does this Bill contain any provisions that could result in the compulsory acquisition of private property?

NO

4.2. Does this Bill create or amend a power to impose a fee, levy or charge in the nature of a tax?

NO

4.3. Does this Bill affect rights, freedoms, or impose obligations, retrospectively?

NO

4.4. Does this Bill:

(a)   create or amend a strict or absolute liability offence?

NO

(b)   reverse or modify the usual burden of proof for an offence or a civil pecuniary penalty proceeding?

NO

4.5. Does this Bill create or amend a civil or criminal immunity for any person?

NO

4.6. Does this Bill create or amend a decision-making power to make a determination about a person’s rights, obligations, or interests protected or recognised by law, and that could have a significant impact on those rights, obligations, or interests?

YES

Registration of news media entities and operators of digital platforms

The Bill will enable the BSA to make determinations that will decide whether a news media entity or an operator of a digital platform can be required to enter mandatory bargaining under the legislation. A registration decision has the potential to substantively impact the interests of a news media entity or a digital platform. The Bill provides prescribed criteria that the BSA must follow when making a registration decision, including an assessment of the bargaining power imbalance between the parties, and clear procedures for how a registration decision is made, including consultation requirements. The BSA would also be required to maintain a public register of registration decisions, with reasons provided for the decision. The BSA will be funded under Budget 24 to obtain the necessary resources and expertise to make registration decisions and can seek additional guidance from competition experts. Registration decisions made by the BSA are not final and can be appealed under ordinary processes of judicial review.

Digital platform exemption

The Bill will also enable the BSA to determine whether a digital platform should be exempt from registration, and therefore, exempt from the stepped bargaining process. A digital platform exemption pathway was considered necessary for the Bill to incentivise digital platforms to enter commercial arrangements voluntarily. An exemption decision can impact digital platforms by changing their obligations under the legislation and the interests of news media entities who may be relying on mandatory bargaining to obtain a deal. The Bill provides clear procedures for a digital platform applying for an exemption and robust criteria to guide the BSA’s decision-making including whether the digital platform is already making a fair contribution to the sustainability of the New Zealand news media sector, the size and resources available to the digital platform, and the extent to which news content agreements have been entered into voluntarily (including agreements with Māori news media entities). The BSA would also be required to consult with parties that would likely be affected by an exemption decision and publicly register the decision to ensure affected parties are aware of the decision and the reasons for why the decision was made. Exemption decisions made by the BSA are not final and can be appealed under ordinary processes of judicial review.

4.7. Does this Bill create or amend a power to make delegated legislation that could amend an Act, define the meaning of a term in an Act, or grant an exemption from an Act or delegated legislation?

YES

Regulations that define or amend a term in an Act

·         Clause 4: amending the definition of “law enforcement or regulatory agency”

·         Clause 4: amending the definition of “recognised regulatory body”

·         Clause 7: amending the definition of “digital platforms”

Creation of these clauses was considered necessary to ensure the Bill can remain current with changes in a flexible and dynamic technology sector, as well as the media regulation sector that may be undergoing significant change as part of a government review. Manatū Taonga consider these clauses are sufficiently limited and are consistent with the provisions and intent of the Bill.

4.8. Does this Bill create or amend any other powers to make delegated legislation?

YES

Regulations, in addition to those described in 4.7, include:

·         Clause 2(3): bringing in the bargaining process provisions earlier than the Bill’s longstop date

·         Clause 45(2)(d) and 45(2)(e)(ii): prescribing any additional mandatory or option terms for final offers

·         Clause 112(3): enabling the independent regulator to create a bargaining code

·         Clause 117(3): specifying additional prohibited provisions from collective bargaining agreements

·         Clause 123(1)(a): prescribing procedures requirements, and other matters for any register kept under this Act

·         Clause 134(1)(e): prescribing any manners in which a notice may be served under the Bill

These regulations were considered necessary as they cover matters of technical detail that would not be appropriate to utilise Parliamentary time. As well, the matters these regulations cover, such as register requirements, prescribing fees, and service of notices, need to be sufficiently flexible to ensure they are fit for purpose and may need to be changed frequently.

4.9. Does this Bill contain any provisions (other than those noted above) that are unusual or call for special comment?

YES

The Bill provides for an exemption to sections 27 (restrictive trade practices), 30, and 30C (cartel behaviour) of the Commerce Act 1986 for registered news media entities engaging in news content bargaining as a collective (clauses 115 – 122). These clauses provide a streamlined pathway for news media entities to collectively bargain without needing to apply to the Commerce Commission. This provision was considered necessary to enable New Zealand’s relatively small news media sector to bargain effectively collectively which helps reproportion the bargaining power imbalance that exists between large digital platforms and news media entities. The status quo pathway under the Commerce Act was considered too time consuming for news media entities who may need to seek a commercial agreement urgently to maintain sustainability and lower the bar to entering collective bargaining for smaller news media entities. Manatū Taonga consulted with the Commerce Commission and the Ministry of Business, Innovation and Employment’s competition team to ensure the collective bargaining exemption was not broader than necessary to achieve the intent of the legislation or enabling any behaviour that may be damaging to competition.