The ACCC's 'bargaining code': A path towards 'decentralised regulation' of dominant digital platforms?

CEPR Policy Insight No 105

Cristina Caffarra, Gregory S. Crawford

New law for a Mandatory Bargaining Code has been introduced in Australia to implement a decision that publishers should be compensated for use of news content by giant digital platforms. This reflects a policy view that the large disparity in bargaining power between platforms and individual publishers requires positive intervention to support quality journalism and news production. This Policy Insight argues that the Code as formulated by the ACCC has desirable properties in line with bargaining theory (including the use of 'final offer arbitration' as a backstop); it also leaves implementation of the regulation to the parties involved, not to an agency suffering from extreme asymmetric information. At a time when the design of regulation for 'gatekeeper' platforms is very much top of the agenda, this 'decentralised regulation' approach should be considered as part of a menu of possibilities in multiple settings.