January 25, 2021
Australia is introducing a law that would make Google, Facebook and possibly other tech companies pay news publishers for their content. In response, Google threatened to remove its search engine from the country, fearing the law would set a dangerous precedent. Australian prime minister Scott Morrison said the country’s lawmakers will not respond to threats. News makes up 12.5 percent of Google searches there. In France, meanwhile, Google inked a deal with that country’s media publishers to negotiate individual license agreements.
BBC reports that the proposed Australian code would “tie Google and Facebook to mediated negotiations with publishers over the value of news content, if no agreement could be reached first,” which Google Australia managing director Mel Silva said is “unworkable.” She added that should the code as written becomes law, “it would give us no real choice but to stop making Google Search available in Australia.”
Google is the dominant search engine in Australia and the government there describes it as a “near-essential utility, with little market competition.”
News Corp Australia has lobbied the government to seek this regulation, especially in light of “a long-term decline in advertising revenue.” Google’s revenues “have increased markedly in the same period, amounting to more than $160bn (£117bn) globally in 2019,” with a reported gross revenue of $3.7 billion in Australia.
BBC notes that, “for Google to threaten to pull out of an entire country suggests the company is worried.” “Google says it wants to help fund original, local journalism,” it says. “But clearly it believes that what is being proposed in Australia could fundamentally hurt its business model if replicated elsewhere.”
Silva’s response is that that the proposed code is “not compatible with the free-flowing share of information.” Last week, Google blocked Australian news sites for about 1 percent of local users, as “an experiment to test the value of Australian news services.” Facebook has also “threatened to stop Australian users from sharing news stories on the platform if the law went ahead.”
Currently, of every $100 Australia spent on digital advertising, $81 goes to Google and Facebook “and COVID-19 has only made this worse.” Last year, Google made $4 billion from Australia and paid $45 million in taxes. Some Australians have expressed concern that if Google removes its search engine it might also remove Gmail, Google Maps and Google Home Services.
Both U.S. trade representatives and Internet founder Tim Berners-Lee have urged Australia to drop its proposed new code.
Bloomberg reports that Google and the French Alliance de la Presse d’Information Générale announced that the former “will negotiate individual license agreements with publishers, based on factors including contribution to political and general information, and the daily volume of publications.” Neither party shared financial details of the agreement, which European publishers have been advocating for over 10 years.
In October, Google said it “set aside $1 billion for a three-year period to pay select media outlets to display curated content on its news app.”