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Australia’s News Media Bargaining Code: an update

November 15th, 2020

We’re approaching the end of the year, and the finalization of Australia’s draft News Media Bargaining Code: a proposed law that would govern the relationship between news businesses and digital platforms.

How the final Code is designed and enforced matters to millions of Australians who rely on digital tools like Google Search, and may well have broader, global ramifications—so this is a critical stage.

Over the past few months, we’ve made it clear that while we have serious concerns about the way the draft legislation is framed, we’re committed to working with the Government and the Australian Competition and Consumer Commission (ACCC) to get to a version of the Code that’s workable and fair for platforms, publishers and all Australians. We’ve also reinforced our willingness to help support the news industry, including the recent announcement of an AU$1.38 billion global investment in partnerships with news publishers and the future of news, for a new product called News Showcase.

While we have come to the table with new commitments, we’ve seen major news businesses doubling down on their argument that the Code should be built on an uncommercial and one-sided negotiation model, unprecedented in Australia, that misconstrues the “value transfer” news businesses claim to provide to Google— and ignores the more than $200 million in annual value that Google provides to publishers. In other words, major news businesses would simply be entitled to discuss the amount of revenue they’d like to be transferred from Google’s accounts to theirs.

Fundamentals for a workable code

Now, as we move towards the last parliamentary sitting weeks of 2020, we want to reiterate the fundamentals that we believe must underpin any final, workable Code, so Australians can continue to have full and fair access to Google services.

It must be fair

The draft Code’s arbitration model looks only at one side of the exchange (notwithstanding what the ACCC itself has said about the value that Google provides to news businesses). This leaves news businesses free to make extreme claims without digital platforms being able to respond effectively, making an unfair outcome inevitable. No business, in Australia or around the world, could accept this kind of extreme and unreasonable set-up.

It must be principled

The Code should preserve a system where publishers are free to decide whether their content can be found in Google Search or Google News (and how much preview information they include), rather than imposing a system that forces Google to include snippets and links to news content, and to pay for that information to appear in search results.

No other Code of Conduct in Australia forces one company to provide services to another company and pay them for the services they benefit from.

But not only would this be unprecedented, but it would also undermine the principle of a free and open internet, built on the availability of links, snippets in search results, and the ability to link between websites without advance permission. This long-established principle is the bedrock of the digital economy and the enormous benefits it creates for people and businesses in Australia and everywhere else.

It must be technically feasible

The Code’s algorithm notification requirements have to reflect the way we operate Google Search, which includes thousands of updates every year. Requiring that Google gives publishers advance notice of every algorithm change is technically impossible—and even if it was achievable, it would give news businesses an unfair advantage over every other website owner, further undermining the open internet, and leaving users worse off. This requirement of the draft law should be amended to require only reasonable notice about significant actionable changes.

The path forward

To put it plainly: we support a Code, but we cannot agree to one that doesn’t incorporate these fundamental elements. No responsible business would cross these red lines. But there is a way forward that we believe achieves the goals of both publishers and the regulators, and which is realistic and fair for all parties.

This approach would have two complementary elements.

First, a final version of the Code that includes standard arbitration (not the extreme and unusual ‘baseball arbitration’ model) and is based on comparable transactions.

Second, commercial agreements between Google and news businesses to help fund the future of media in Australia. We have supported the news industry in multiple ways for many years, from helping train journalists to helping publishers find new revenue streams. And we’ve shown that we’re willing to pay to license content through products like News Showcase.

We’ve already signed agreements for News Showcase with 200 publishers globally and are making progress with many more around the world, including in France. Australian publishers were some of thefirst in the world to sign these deals. We’re eager to build on this initial commitment in the years ahead, but we can’t do that without a resolution on the Code and the uncertainty and risk that come with it.

As work on finalizing the Code continues, we’ll keep making the case for an approach built not on unprecedented arrangements, but on a fair, workable Code and mutually beneficial, commercial discussions between publishers and digital platforms. Australia’s future as a strong digital economy depends on it.