AFR: Rod Sims’ big tech fixation blinds him to Murdoch’s monopoly

First published in the Australian Financial Review on 8 February 2021
It’s understandable that Rod Sims worries about emergent digital monopolies. They are huge. But the Australian Competition and Consumer Commission chairman’s fixation on new media monopolies has blinded him to existing ones – especially Rupert Murdoch’s 70 per cent stranglehold on print readership.

As Sims recently told The Australian Financial Review, Murdoch isn’t such a ‘‘big, bad guy’’. After all, he says, News Corp’s global market capitalisation is just a fraction that of Google or Facebook. This same attitude guided Sims to green-light Murdoch’s cementing of his undisputed domination in Queensland in 2016 through the acquisition of APN Australian Regional Media’s 12 daily newspapers, 60 community titles and 30 websites.

Murdoch already owned Brisbane’s The Courier-Mail, Gold Coast Bulletin, Townsville Bulletin and Cairns Post, plus local papers and The Australian. What was Sims’ rationale? Readers were ‘‘increasingly reading online sources of news, where there are alternatives’’. Sims’ decision had disastrous consequences. Only one of the APN dailies, the Toowoomba Chronicle, has survived. The others – spanning the Sunshine Coast, Fraser Coast, Ipswich, Gympie, Bundaberg, Gladstone, Mackay, Warwick, Stanthorpe, Lismore and Grafton – have all stopped, their newsrooms slashed and websites packed with non-local news.

Readers are now referred to The Courier-Mail, which is produced up to 800km away.

News Corp vowed to maintain APN’s ‘‘vibrant newspaper operations’’. In reality, Murdoch bought out his competitors, kept up appearances for a few years, then unceremoniously slaughtered them under the cover of COVID-19.

Sims should share responsibility for that result. Sims’ experience as an economist is acknowledged, 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.

Murdoch’s predatory behaviour continues through his assault on AAP Newswire, which he seeks to replace with his own NCA NewsWire. If he is allowed to succeed, Murdoch’s content will be seeded throughout the media, including at the ABC. Yet the ACCC’s response to this attempted power grab has been barely audible.

Sims doesn’t realise that Murdoch’s print monopoly remains the feedstock for most broadcast media, telling TV and radio stations which stories are important, and framing the issues. Murdoch’s Sky News Australia is now broadcast free-to-air across 30 regional markets and nationwide through taxpayer-funded Foxtel, and it has a bigger YouTube base than channels Nine, Ten and Seven combined.

Its agenda-driven programs are steadily radicalising the Liberal Party and Nationals base, dragging more MPs to the far right.

He should ask Rupert’s own son, James Murdoch, who quit the family business after decades in its inner sanctum. He accuses it of abusing its power to deny science, pursue hidden agendas, legitimise disinformation and sow doubt into public debate.

A company with a record of bribery, hacking into innocent people’s devices, and tolerating sexual predators such as Roger Ailes should not be allowed to dominate the flow of information in our democracy.

This attitude persists even after the attempted insurrection in Washington, which was in part the consequence of Fox News spreading disinformation about a ‘‘stolen election’’, and its weaponisation of grievance-based identity politics.

Murdoch’s outlets indulged the QAnon cult before the insurrection, and make apologies for it now. Fox News has charted the path for even more extreme voices. It remains Murdoch’s template for Australia.

We should act against digital monopolies and their aggressive data harvesting. Indeed, the national petition calling for a royal commission to ensure a strong, diverse news media identified Google and Facebook as warranting scrutiny. The record-breaking petition gathered more than 500,000 signatures, including mine and Malcolm Turnbull’s. But I remain wary of Sims’ proposed news media bargaining code, which establishes an income stream for news outlets that would shrink and grow with the ‘‘shareability’’ of their articles.

The incentive for news outlets is clear: produce greater quantities of sensational, less reliable content in pursuit of social media clicks. This TikTokisation of news content risks the degradation of reliable journalism over time.

The code also promises news organisations advanced notice of algorithmic changes – a distinct advantage for the few organisations that have the resources to capitalise on such information. Murdoch’s market power is set to grow under the Sims code. Unlike Sims, I don’t believe Australia must be paralysed working out which monopolistic demon to slay. Successive regulatory failures over many decades have delivered us monopolies on multiple fronts. The course is clear: a royal commission to focus a light on the problem and offer options for the future.

Given time and resources, a commissioner could review the latest evidence and best examples of media governance around the world. Only then would Parliament have an appropriate evidence base from which to make informed decisions to ensure a free and reliable media as the lifeblood of our democracy.