A workable publisher code for Australia

Editor’s note: This is an opinion piece that was
first published in the
Australian Financial Review
�on September 13, 2020. 

The Australian Competition and Consumer Commission’s media
bargaining code, which is designed to govern the relationship
between news media and digital platforms – including how news
content should be paid for – will have a big impact on the future
of the country’s digital economy and millions of Australians who
use platforms such as Google’s.

It’s vital we get it right before it becomes law, which is why
Google has engaged in good faith with the ACCC inquiry and
consultation process since it was launched in 2017.

Our position on the regulation is clear. We do not oppose a code
that oversees the relationships between news publishers and digital
platforms and we’ve been committed to playing a constructive role
in the process from the start. In fact, all the parties involved
here agree on two things: journalism is important to democracy, and
the business models that fund journalism have changed.

What we oppose is a mandatory bargaining code that’s
unworkable, both for Google as a business, and for Australians.

However, contrary to what some have claimed, Google hasn’t
‘‘stolen’’ revenue from news publishers. AlphaBeta research
conclusively shows that the fall in newspaper revenue between 2002
and 2018 was mainly the result of the loss of classified ads to
online classifieds businesses such as Domain, Realestate.com.au,
Carsales and Seek. Google’s advertising business grew because it
made advertising available to businesses that had previously been
priced out.

We don’t ‘‘use’’ or ‘‘steal’’ news content
either – we simply help people find what they’re looking for on
the internet, and link them to other websites, including news
sites. You don’t see full articles on Google.

Just as we contribute to the Australian economy by working with
more than a million Australian small and large businesses,
supporting almost 120,000 jobs, and paying tens of millions of
dollars in tax, we are willing to pay to help news businesses too.
As part of our broader efforts to support a strong future for
journalism, we are already paying several publishers to license
content for a new product, as well as helping train thousands of
journalists.

When it comes to new regulation, what we oppose is a mandatory
bargaining code that’s unworkable, both for Google as a business,
and ultimately for the Australians who depend on our services, from
the search engine to YouTube. And right now, the proposed code has
critical flaws that need to be addressed.

In its current form, the code would impose a one-sided
negotiation and arbitration model that is unlike any other
tried-and-tested model applied in Australia. It would consider only
the value news businesses are assumed to provide to Google – and
ignore the more than $200 million in value that Google sends to
publishers each year via ‘‘clicks’’ from search
results.

One-sided set-up

It wouldn’t consider our costs or the commercial agreements
with publishers we already have in place – and we have no
meaningful ability to appeal the arbitration. No business would or
should accept this kind of one-sided set-up.

The code would also force us to tell news businesses how they
can get access to data about Australians that they don’t already
have, raising concerns over how this information would be used. It
would require us to give a small group of news businesses 28
days’ notice of significant changes to search and YouTube
algorithms and describe how to minimise their effects.

Even if this were technically possible (it isn’t), it would
privilege certain Australian news publishers over every other
Australian who has a blog, YouTube channel or a small business
website, while slowing down improvements to the search function for
everyone else.

These issues are serious. But we don’t believe they are
insurmountable, and we’re working with the ACCC and the
government to help find a way through them. With reasonable
changes, we believe the code could be rebalanced in a way that
meets its intended purpose and makes it fair to all parties.

The negotiation model could be amended to take account of the
value both sides bring to the table, as the ACCC’s own concepts
paper advocated in May, and the arbitration rules could be brought
into line with commonly used methods in standard arbitration,
comparable codes and negotiations.

The requirement to share algorithm changes could be limited to
notifying news business about actionable changes, with reasonable
notice, and without obliging Google to tell a select few publishers
how they can take advantage of the system.

The data-sharing provisions could be tightened to make it clear
that Google is not required to share any additional data, over and
above what publishers are already entitled to see, protecting
information about how people interact with our sites.

The scope of the code could be better defined to apply to
designated services that Google provides, rather than being left
open-ended.

These changes would help create a fair, workable code. They
would mean Australian internet users continue to have full and fair
access to Google Search, YouTube and other services. And they would
mean that discussions about payments for licensing news content
could continue on a normal, commercial basis – rather than being
set up as an artificial, one-sided process that is certain to
result in unreasonable and uneconomical outcomes.

As the ACCC prepares its final recommendations, we have to see
the code in its bigger context.

Australia is a forward-looking country with an open, global
economy that attracts investment and job opportunities from around
the world. Our technology companies, digital entrepreneurs and
engineers are among the best in the world at what they do – and
fair access to tools such as Google Search and YouTube is part of
that success. Google believes in sensible regulation, but everyone
should distrust rules that give special treatment to some over
others.

There is a window of opportunity to shape an effective media
bargaining code that meets the needs of news businesses, of digital
platforms and, above all, of Australians. We should take that
opportunity – and then get back to the urgent work of building a
strong digital economy that can help fuel Australia’s future.

Source: FS – Social Media Blogs 2
A workable publisher code for Australia