Google and Australia Are Fighting Over News. Here's What You Need to Know

Google has threatened to pull its search business from Australia if regulators don’t modify a proposed law that would force tech giants to pay royalties to publishers. The claim to pull the service, made by Google Australia and New Zealand managing director Mel Silva at a Senate inquiry Friday, has sparked heated responses. “We don’t respond to threats,” returned Australian Prime Minister Scott Morrison. This ongoing battle is part of a wider global push to hold U.S. tech companies to account. Here’s a primer to help make sense of it. Australia's proposed law In a world first, Australia's proposed News Media Bargaining Code would require Google to negotiate individual payments with local news companies and broadcasters whose links are displayed in its search results. Silva said 95% of searches in Australia are done through Google. If a deal cannot be struck, a government-appointed arbitrator will decide how much Google pays. The code would extend to other platforms such as Facebook. Google’s argument As you can imagine, Google has some issues with this. While the search giant claims it’s keen to help create a version of the law, it states that the proposed legislation is unworkable for at least three reasons. First: By requiring it to pay to display snippets for every link, the law would undermine the concept of the open internet. Second: The arbitration process could lead publishers to make unreasonable demands. And third: The law would require Google to give news publishers 14 days’ notice of certain algorithm changes. Google calls that “special treatment” that other sites would not get. Google also points out it is not the reason for the decades-long decline in newspaper revenue. Instead, it points to its Google News Showcase licensing program—where it pays some 400 global publishers $1 billion to display its news as story panels on the Google News app. Evidence, the company says, of supporting news and journalism. Silva told senators that last year, Google paid about 59 million Australian dollars ($46 million) on revenues of AU$4.8 billion ($3.7 billion). Nonetheless, as with most countries, the media industry is suffering when the large majority of digital advertising spend is being funneled to Google and Facebook. The publisher view The proposed legislation is fit for purpose, said Angela Mills Wade, executive director of trade outfit the European Publishers Council. “[Google’s] latest threat is only possible because Google enjoys a preeminent bargaining position through its near-total monopoly of search,” she said. “They simply set themselves above the law and normal business conduct, which only monopolists can do," she added. "Regulators are intervening—and not only in Australia—to restore balance in negotiating positions between publishers and monopolists.” The proposal has its critics Governments' handling of tech regulation has been ham-fisted in the past. Analyst Ben Thompson goes into detail about how the language of the legislation, the terms of which remain to be bargained over, are murky. Thompson also points out that publishing mogul Rupert Murdoch, whose media empire has its roots in Australia, is a longtime critic of Big Tech. Murdoch has "finally convinced the government to tax the two companies and deposit the proceeds directly in his pocket," Thompson said. The U.S. response Despite the U.S. marshaling its own forces against Google, last Monday U.S. trade representatives Daniel Bahar and Karl Ehlers asked Australian lawmakers to scrap the proposals. “The U.S. government is concerned that an attempt, through legislation, to regulate the competitive positions of specific players ... to the clear detriment of two U.S. firms may result in harmful outcomes,” wrote Bahar and Ehlers, under the letterhead of the Executive Office of the President. Liberty, equality, fraternity This week, Google also reached an agreement with an association of French publishers over how it will pay for the use of their content in Google News Showcase. This is the country-level version of the pan-European directive, "the neighboring right" for news agreed to in 2019, but doesn't go as far as the Australian law would. This framework of an agreement does not include snippets, which is what Google and Australian regulators and media are tussling over. L’Alliance de la Presse d’Information Générale (APIG), which represents the interests of some 300 political and general information press titles in France, announced the framework agreement Jan 21. after months of negotiations and some political back-and-forth. The amount Google will pay is unclear but it has, according to TechCrunch, struck individual deals with publishers including Le Monde, Le Figaro and Libération. The Spanish precedent In 2014, Google withdrew Google News from Spain, with little impact on the search giant. The move didn't lead to other countries following suit. In Australia, the government has suggested that Google—aware that the global opinion of tech companies has soured—is concerned about the precedent its legislation would set.