8 Facts about Google and the News Media Bargaining Code

Today we appeared at a public hearing of the Senate Committee that is reviewing a proposed new law, the News Media Bargaining Code. You can read Mel Silva’s opening statement here.

As we said at the hearing, we are committed to reaching a workable Code and see a clear path to getting there, but serious concerns with the current draft remain.

Here are some important facts we shared with the Committee at the hearing and in our recent submission:

Fact 1: Google supports a fair Code 

We’ve been clear that we don’t oppose a Code, nor are we opposed to supporting journalism––but how we do that matters. The current version of this law remains unworkable for Google, but we believe that the concerns we and others have raised can be addressed with reasonable changes. We have proposed a solution that would see Google pay publishers for value under this new law––without breaking Google Search.  

Fact 2: The draft Code is unworkable for Google in three key areas

1. Paying news sites for snippets and links: By designating Search together with an overly broad and vague definition of news, the Code effectively forces Google to pay to show links in an unprecedented intervention that would fundamentally break how search engines work. And the links we have to pay for are so broadly defined in the Code that we don’t know what is in or out. Right now, no website or search engine in Australia pays to connect people to other sites through links. The Code undermines one of the key principles of the open internet people use every day—something neither a search engine nor anyone who enjoys the benefits of the free and open web should accept. 
2. An unfair and unprecedented arbitration process: The Code’s one-sided arbitration model, which only takes into consideration publishers’ costs and attempts to discount the benefit publishers receive from Google, together with baseball arbitration — incentivises publishers to make enormous and unreasonable demands. It’s a model that discourages good faith negotiations and encourages the use of arbitration which is intended as a last resort. This system exposes Google to unreasonable and unmanageable financial and operational risk. You can read more on our concerns about the arbitration process here and here. 
3. Giving 14 days algorithm notification: The Code requires us to give news publishers special treatment—14 days’ notice of certain algorithms changes and ‘internal practices’. Even if we could comply, that would delay important updates for our users and give special treatment to news publishers in a way that would disadvantage every other website owner.

Fact 3: The Code as it stands breaks Google Search and puts our business in Australia at risk 

Paying for links and snippets undermines the basic principle of the internet––the ability to freely link between websites. Just like you don’t pay to include a hyperlink in an email, websites and search engines do not pay to provide links to third party websites. It would be like requiring the telephone directory to pay businesses to be able to include them—it simply makes no sense.

As we’ve been saying, we are committed to working with the Government to achieve a workable Code. However, the principle of unrestricted linking between websites is fundamental to the web and to Search. Coupled with the unmanageable financial and operational risk if this version of the Code were to become law it would give us no real choice but to stop making Google Search available in Australia. That’s a worst-case scenario and the last thing we want to have happen—especially when there is a way forward to a workable Code that allows us to support Australian journalism without breaking Search.

We believe there’s still time to get this right: with reasonable amendments there is a path to a workable Code that provides a framework in which Google can pay publishers for value under the Code without undermining Google search and the fundamental importance of linking freely. 

Fact 4: It’s not just Google who says paying for links and snippets damages the web

Many others have raised concerns that paying for links and snippets would undermine the fundamentals of the free and open web. This includes: 

• The Business Council of Australia said “...the requirement for digital platforms to pay for providing a link to another website runs counter to one of the fundamental tenets of the internet: the ability to link freely between content. The ability to freely make these connections has underpinned the creativity and sharing of knowledge enabled by the internet. This legislation undercuts this fundamental principle that has, for decades, enabled the internet to deliver real benefits to all Australians.”
• Tim Berners-Lee, the inventor of the World Wide Web, said the law “risks breaching a fundamental principle of the web by requiring payment for linking between certain content online”. 
• Scott Farquhar, co-founder of Australian tech company Atlassian, told The Australian on January 15: “The precedent of charging for links and snippets is a fundamental threat to the open internet, not just Google.”
• Vint Cerf, chief internet evangelist at Google, who’s also regarded as one of the ‘fathers of the internet’ said: “In its current state [the bill] represents a fundamental challenge to the free and open Internet, to the functioning of the country’s digital economy, and to Australia’s economic future…”

Many more submissions made to the Senate Committee and previously to the Australian Consumer and Competition Commission raise similar concerns. Read more about the submissions to the ACCC here.

Fact 5: Google has a proposal for amendments to the law that support journalism––without breaking Google Search. 

We’re proposing to pay publishers through Google News Showcase, not for links and snippets in Search. News Showcase is a licensing program we’re investing AU$1.3 billion (US$1 billion) in globally over the next three years to help news businesses publish and promote their stories online. Publishers would get paid for journalist’s editorial expertise and beyond-the-paywall access to their journalism. Nearly 450 publications in a dozen countries globally have already signed up, including six publishers in Australia.

Google News Showcase would operate within this new law, with binding arbitration on News Showcase as a backstop to resolve any disputes. While remuneration would happen through News Showcase, the other minimum requirements in the Code could continue to apply to Google Search. 

We’ve also proposed reasonable amendments to the arbitration model that will bring it in line with widely accepted models and lead to fair commercial outcomes, and algorithm notification requirements that are workable for Google and useful for news publishers.

Fact 6: Google links people to news––we don’t show full articles.

Google doesn’t “use” news content—we link you to it, just like we link you to every other page on the web—think Wikipedia entries, personal blogs or business websites. We sort through hundreds of billions of webpages to find the most relevant, useful results in a fraction of a second, and present them in a way that helps you find what you’re looking for—and then we take you to the source of that information.

Some large publishers have inaccurately accused us of “stealing” news content, but how we connect people with news content, such as articles from the Herald Sun or the Sydney Morning Herald, is no different than the way Search connects you to your footy team’s home page, a website with your favourite recipes, or official Government websites. We sent more than 3 billion clicks and visits to Australian news publishers in 2018—for no charge—allowing these publishers to make money by showing their own ads, showing other articles or converting people into new paying subscribers—driving an estimated $218 million worth of value.

Fact 7: Google is not the reason for the decline in newspaper revenue over time 

An analysis conducted for Google by the economists at AlphaBeta, shows that the loss of newspaper revenue resulted primarily from the loss of classified ads to online classifieds businesses such as Domain, Realestate.com.au, Carsales and Seek. Between 2002 and 2018, newspaper revenue fell from $4.4 billion to $3 billion. Of that decline, 92% was from the loss of classified ads, and most of these classified revenues went to specialist online providers that target niches such as job advertisements, second-hand goods, or real estate listings. Almost none went to Google. Google's revenue growth was primarily from new money being spent by businesses that would previously not have spent money on advertising.

Fact 8: Google contributes $53 billion in benefits to Australia each year

We are committed to Australia, and through our work here, have grown the digital economy and provided $53 billion in benefits to businesses and consumers each year. In 2002, Google Australia started with just one person in a lounge room, today, our team has grown to be 1,800 strong. Today, we support an additional 116,000 jobs across the country, and provide $39 billion in benefits to Australian businesses and $14 billion in benefits to consumers.