Google Escalates Dispute With Australia by Threatening Search Shutdown
By Mike Cherney
SYDNEY--Google threatened to shut down its search engine in
Australia if a proposed law requiring tech giants to pay publishers
for news isn't changed.
The warning escalates the long-running battle pitting the
Alphabet Inc. unit and Facebook Inc. against the Australian
government, whose efforts to compel tech companies to pay
publishers is being widely watched globally and could offer a model
for other countries. Last year, Facebook said it would restrict
Australian users from sharing news articles on its platforms if the
proposal became law.
The Australian code would require binding arbitration if
publishers and the tech companies can't reach a deal on
compensation. Media companies in Australia, including the local
subsidiary of News Corp, owner of Wall Street Journal publisher Dow
Jones & Co., have supported that provision, arguing that it
would prevent the tech giants from walking away from
Mel Silva, Google Australia's managing director, told a
parliamentary committee Friday that under the so-called news-media
bargaining code, Google would have to pay publishers for links to
news articles that appear in search results. That would set an
untenable precedent, she said, noting that unrestricted linking
between websites is fundamental to how its search engine
"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," she said. "That would be a bad outcome not just for us,
but for the Australian people, media diversity and small businesses
who use Google Search."
Google and Facebook collect ad revenue based on visits to their
sites and can increase their traffic by including links to news
articles. But they argue that publishers also benefit because the
links send readers directly to publishers' websites.
After long resisting paying for content, tech companies have
recently made deals with some publishers globally. This week,
Google reached an agreement with a French publisher association
that provides a framework for determining compensation when
negotiating with individual publishers.
Australian Prime Minister Scott Morrison didn't offer any
concessions Friday. His government decided to pursue a mandatory
code after an effort toward voluntary protocols floundered. The
parliamentary committee will release a report on the code by Feb.
"Australia makes our rules for things you can do in Australia,"
Mr. Morrison said. "People who want to work with that in Australia,
you're very welcome. But we don't respond to threats."
Simon Milner, vice president of public policy at Facebook
Asia-Pacific, told the parliamentary committee that his company
wants to reach deals with Australian publishers. But the code gives
publishers near-complete control of negotiations, he said, which
will encourage unreasonable demands.
"Rather than increasing investment in news and journalism, it
will have the opposite effect," Mr. Milner said of the proposed
Chris Janz, an executive at Nine Entertainment Co., which has
radio, television and print assets, including the Sydney Morning
Herald, told the committee that Google recently experimented with
removing local news from its search engine. He said that deprived
Australians of up-to-date information on the local coronavirus
situation and illustrated Google's market power.
"Their market credibility, business models and substantial
valuations have been built on having free and unfettered access to
quality journalism and content," Mr. Janz said. "Content that is
created and funded by others."
Google's Ms. Silva suggested that the code could be changed so
that it applies not to links in its search engine but to a new
product called News Showcase, which pays publishers and allows them
to curate panels of news that appear on Google services. Ms. Silva
also suggested changes to the arbitration process and rules
determining when Google has to notify publishers of algorithm
changes that could affect the search rankings.
Rob Nicholls, an associate professor at the University of New
South Wales Business School who focuses on competition law, said
the government and the tech companies would likely reach a
compromise. Google's threat appears less credible than a
more-limited measure such as Facebook's restricting the sharing of
news articles, he said: It "sounds like an overreach, and in
negotiations in Australia, if you overreach you're likely to have
to backpedal a lot."
Write to Mike Cherney at firstname.lastname@example.org
(END) Dow Jones Newswires
January 22, 2021 02:10 ET (07:10 GMT)
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