Google Battles Regulators on News

Photo credit: iStockphoto/julkirio

When you use Google to access news and journalism content, is Google acting as a publisher or is it a platform?

This is one of the basic questions that is creating an argument between the internet giant and the Australian Competition and Consumer Commission (ACCC), which is trying to make Google pay media companies for news content.

Publishers had enough

The fight comes as the media industry, already hit hard by digital publishing, has been almost brought to its knees by the COVID-19 pandemic disruptions.

Regional newspapers have closed down all over Australia. News Corporation, for example, has announced it will cease printing 112 community and regional mastheads, and close 36 of them altogether. 

Over 150 newsrooms have closed down in Australia since 2019, according to the Public Interest Journalism Initiative.

So, as print journalism disappears into the dustbin of history, competition watchdog the ACCC has stepped into prevent media companies from also becoming extinct, or their business models unviable.

The ACCC has published a draft law which proposes forcing Google and Facebook to pay media publishers for their content.

According to ACCC chairman Rod Sims, the changes “address a significant bargaining power imbalance” between the digital companies and media publishers.

“A healthy news media is essential to a well-functioning democracy,” said Sims.

Internet giants are in good shape

While the media companies have struggled, Google Australia is in very good health.

The company made AUD 4.8 billion in revenue and this included AUD 4.3 billion in advertising, some of which appeared through the Google platform on web pages created by the media companies and carrying journalism they paid staff to create.

Meanwhile, revenue at News Corporation’s Australian assets fell by 16% over the last year.

Google claims it offers its services for free, but its critics say it not only makes money from the advertising on the media pages but harvests personal data which then enables the company to tailor advertising individually. In one view, this is a transaction as real as if money changes hands.

With this in mind, the ACCC’s Rod Sims demonstrates that new content brings significant benefits to the digital platforms, “far beyond the limited direct revenue generated from advertising shown against a news item.”

“News media businesses should be paid a fair amount in return for these benefits.”

The fight with the ACCC has seen Google put on hold negotiations it was having with several publishers on licensing their content.

The company, predictably, prefers to negotiate individual deals without being bound by regulations which might direct its behavior with all publishers.

Google hit back this week at an “open letter to Australians” in which Google Australia managing director Mel Silva says the changes will make Google and YouTube searches worse.

Google claims foul

The company is positioning itself not only on the side of consumers, but more on the side of smaller publishers and individuals who make money from posting videos, blogging and vlogging.

“The law would force us to give an unfair advantage to one group of businesses — news media businesses — over everyone else who has a website, YouTube channel or small business,” Silva said in her letter.

“News media businesses alone would be given information that would help them artificially inflate their ranking over everyone else, even when someone else provides a better result.”

He also claimed the ACCC’s changes would see people handing “your data over to big news businesses and would put the free service you use at risk in Australia.”

In response, the ACCC has pointed out that its changes do not require Google to charge for its services and that Google won’t be required to share any additional user data with Australian media publishers, “unless it chooses to do so.”

Deja Vu

It might be inconceivable for Australians to do without Google’s new service, but it has happened before when it withdrew from Spain under similar circumstances in 2014.

The internet giant clearly does not like being regulated and is now appealing to Australian users in its battle.

There is a lot at stake, beyond Google revenues. The traditional media sector is fighting for its life, small YouTubers and vloggers are trying to monetize, while everyone else is used to accessing almost everything for free.

Regulators haven’t been a big presence on the internet so far, but the ACCC shows they might be catching up.

How that plays out in coming months, and how it will shape the consumption and creation of news content is becoming a major battleground for the future of the Australian internet.

Photo credit: iStockphoto/julkirio