So, what is the law all about The Mandatory Bargaining Code is an unusual piece of policy. It attempts to address two problems in one hit how to tax large, multinational technology companies and how to ensure that Australia maintains a strong, independent media. The code's solution is to mandate transfer payments from the tech companies to news media organisations. At this point you could be forgiven for thinking 'But isn't Australia a market economy?' And that's one of the most perplexing aspects of the new law. What it effectively does is require one industry to pay money to an unrelated industry. This is like forcing computer manufacturers to sustain typewriter manufacturers. The underlying assumption is that Google and Facebook derive benefit and revenue by helping users access links to news stories. That is true to an extent, but by that logic every single business that receives a referral from a platform should be paid for it. If I searched the menu of a local restaurant, Google would have to pay that restaurant for my action. That model ignores the benefit businesses derive from the referral business, creates odd incentives and is not scalable. The other unusual feature of the law is that it doesn't apply to any company. The intention behind the legislation was to use it as a threat rather than to have it actually apply to the companies. In this respect it's a little like a democratic version of a shakedown. If the companies don't agree to pay news media outlets enough money in private deals, they face the risk of being designated by the Minister and forced to abide by the code. The code's mandatory provisions are so onerous that the tech companies are highly incentivised to make generous payments to media companies to avoid the provisions. The payments agreed to in private deals can easily exceed revenue actually generated by the platform from displaying the news links. This is because the amounts they would be forced to pay under the code would likely be far higher, so it is better to overpay outside the scheme than risk falling under it. As you might suspect, a law that proposes giving news organisations money for doing nothing new was received well among news businesses. Politically, it was an astute way to go after the tech giants because there was not a dissenting voice to be heard in the Australian mainstream media. The downside was that it meant there was little exploration of alternative policy approaches, or some of the longer-term consequences of the code.