Google hits back at the Australian government’s plans for a News Media Bargaining Code

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The search giant has upped its campaign against a draft code from the Australian Competition and Consumer Commission (ACCC) which would force digital platforms to pay news media companies for their content.

Key takeaways:
  • Google has written a ‘13 things you need to know about the News Media Bargaining Code,’ setting out some of their concerns. “We are not against a law that governs the relationships between news businesses and digital platforms,” they claim. “But the current draft Code is unworkable.”
  • This follows an open letter they published a few weeks ago, which was shown to Australian users visiting Google’s pages. “The way Aussies use Google is at risk,” the popup read. “Your search experience will be hurt by the new regulation.” 
  • The code allows news publishers to negotiate for payment with sites like Google and Facebook if their content is featured on their services

It’s a complicated issue, and although it would be easy to pin the blame wholly on Google as the big bad tech giant, the code does actually throw up some problems that would impact the wider digital ecosystem, not just publishers.

Google’s grumbles:

  • An obligation to share details about algorithm changes. They argue this would provide an “unfair advantage to large news businesses” and help them feature more prominently in organic search results at the expense of smaller publishers, businesses and creators.
  • A requirement to tell news media businesses about how they can get access to data that Google collects but doesn’t supply to them. Google says there is a lack of detail on safeguards for news businesses wanting access to sensitive data.
  • An “unfair arbitration process”. Under the code, Google and news organisations would have three months to negotiate a payment amount before going to arbitration. Google argues that this process “is set up to encourage news businesses to make unreasonable and exorbitant financial demands.”

The ACCC says that the negotiation process is designed to secure a fair payment for journalists’ work, and is designed to “address a significant bargaining power imbalance between Australian news media businesses and Google and Facebook.”

The timeline so far:
  • The introduction of the code from the ACCC follows a 2019 inquiry in Australia that concluded Facebook and Google take a disproportionate share of online advertising revenue, despite large amounts of content coming from publishers and media organisations
  • The first draft of the News Media Bargaining Code was released on July 31st. The ACCC is accepting submissions on the draft until 28th August.
  • Google’s lobbying of Australian users began on August 17th with the publication of an open letter. The ACCC swiftly published a rebuttal letter, claiming that Google’s open letter contained “misinformation” about the code.
  • ‘13 things you need to know about the News Media Bargaining Code’ is published on August 24th, setting out a number of questions, answers and concerns the search giant has about the impact the code could have.

Isn’t the code a good thing for publishers? Yes and no. The two companies do have a monopoly on the market, and this can make negotiations around fair terms difficult. But there is also a lot of misunderstanding about the nuances of the ecosystem.

Google, Facebook, and other tech giants have hoovered up ad spend at the same time as publishers have seen revenues slowly slip away. But this isn’t because they’re taking it from publishers. Essentially, it’s because they have built global advertising products around intent and search. But this isn’t in competition with publishers, it’s an enabler.

  • “Publishers are in the display advertising business. And in the display advertising business, Google is an ad tech supplier,” explained Google’s Head of News Ecosystem Madhav Chinnappa, trying to set the record straight about Google’s place in the ecosystem.
  • Media analyst Thomas Baekdal argued that publishers don’t understand in general how Google works and how they make money, so any sort of payment for news snippets would make them no money anyway.

Worth noting: Google launched a licensing program in June to pay for quality content from publishers for an upcoming news experience. They released an update on this last week, with a list of publishing partners they are working with to shape the product.

  • “As we get closer to a public launch, we’re especially grateful to these initial partners for working together to build a product that enables people to become more informed and provides additional financial support for news publishers,” the update said; a very pointed reference to the Australian news media debacle.

The last word: This isn’t the first time a governing body has come together to try to extract payment from Google. Last year, France became the first country to implement the EU’s ‘Copyright Directive’ law that would force Google to pay a ‘snippet tax’ for using extracts of publisher’s articles. 

Google refused to pay, and said they would leave search results for French publishers blank if they were forced to. France conceded in the short term, but opened an antitrust case, which it won the first round of in April.

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