Small businesses and Australia’s Media Bargaining Code

In what has been an incredibly tough year, Australia’s small and medium businesses have kept our economic engine going—protecting jobs and providing vital services in their communities. 

Throughout this time, we’ve made sure business owners know Google’s tools and services are there to help. Small businesses are using our affordable ad services to advertise where they couldn’t before, and connecting with new customers via free listings on Search and Maps. We’ve also helped businesses operate online through national digital skills training. 

As Australia starts to look towards economic recovery, we’re concerned that many of these businesses will be affected by a new law being proposed by the Australian Government—the News Media Bargaining Code—which would put the digital tools they rely on at risk. 

While we don’t oppose a code governing the relationship between digital platforms and news businesses, the current draft Code has implications for everyone, not just digital platforms and media businesses. We wanted to explain our concerns and how we believe they can be addressed in a way that works for all businesses. 

How does the Code impact small businesses? 

The draft code affects small businesses because it would weaken Google services like Search and YouTube. These services created more than 130 million connections between business and potential customers in 2019, and contributed to the $35 billion in benefits we generated for more than 1.3 million businesses across the country. But they rely on Search and YouTube working the same for everyone—so that people can trust that the results they see are useful and authoritative, and businesses know they’re on a level playing field. 

Under the draft code, we’d be forced to give some news businesses privileged access to data and information—including about changes to our search algorithms—enabling them to feature more prominently in search results at the expense of other businesses, website owners and creators. 

For example, a cafe owner might have made their way to the top spot in Search results for a particular query over time, thanks to popularity, search interest and other signals. But if the draft code became law—giving some publishers an advanced look at algorithm changes—they could potentially take advantage of this and make their web content appear more prominently in search results. 

Likewise, if you ran an independent travel website that provides advice to people on how to plan local holidays, you might lose out to a newspaper travel section because they’ve had a sneak peek at changes to how Search works. 

That’s an unfair advantage for news businesses. Businesses of all kinds would face an additional hurdle at a time when it’s more important than ever to connect with their customers. 

A bad precedent 

The draft code would also create a mandatory negotiation and arbitration model that only takes into account the costs and value created by one party—news businesses. The code’s provisions mean costs are uncapped and unquantifiable, and there is no detail on what formula is used to calculate payment. 

Regulation framed in this way would set a bad precedent. Most businesses support sensible regulation—but not heavy-handed rules that favour one group of companies over all others. Australian entrepreneurs like Mike Cannon-Brooks, Matt Barrie and Daniel Petrie have made the point that a market intervention like this would deter international companies from operating in Australia, risking jobs and investment just as we need to be focusing on the recovery from COVID-19. 

And it’s not just business leaders who’ve spoken out. Over the last few weeks, we’ve heard a cross-section of Australia’s business community, from local retailers and restaurants to YouTube creators, and we’re deeply grateful for their support. 

The way forward 

The issues with the draft code are serious, but we believe they can be worked through in a way that protects full and fair access to Search and YouTube for every Australian business. We’ve made it clear that we want to contribute to a strong future for Australian news, and we’re engaging constructively with the Government and the ACCC to try to find a resolution — making proposals for changes that would support a workable code. 

Throughout 2020, we’ve worked with business owners across Australia to help them get through the challenges of the fires and the pandemic, whether by providing digital tools, direct assistance, skills training or advice, and we hope to continue providing that support long into the future. 

We know how tough this year has been, and we’re going to keep doing everything we can to make sure that the final version of the code supports Australia’s amazing businesses.