Google vs. Australia: the first battle for the future of the internet

Google threatens to remove its search engine from Australia

It’s no secret that traditional news media has been having a hard time. The balance of power between news sites and aggregator sites is a fight as old as the internet. In this effort, the Australian government proposed a law last year that would require companies like Google and Facebook to pay to link to news stories.

According to the Australian Competition and Consumer Commission (ACCC), the goal of the law is to “address bargaining power imbalances between Australian news media businesses and digital platforms, specifically Google and Facebook.”

It includes a set of rules for the publishers and social sites to adhere to, including publishing “core news,” maintaining editorial standards, and being primarily Australian in origin and intended audience.

However, Google did not take this lying down. About a week ago, a yellow warning sign appeared under the search bar in Australia that linked to an open letter from Google Australia’s managing director, Mel Silvia. They are threatening to shut down Google search from the country if the proposed law takes effect.

Google argues in their statement that this “puts Google’s business in Australia — and the services we provide more than 19 million Australians — at enormous risks,” and this monumental shift to how the internet works would lead to unforeseen consequences.

Google representatives did not respond to The Concordian’s request for comment.

“Many countries are contemplating link taxes or other forms of revenue sharing,” according to Robert Fay, managing director of digital economy at the Centre for International Governance Innovation (CIGI).

“In France, for example, Alphabet [Google] has agreed to negotiate licenses to pay for content,” said Fay. That French example is an agreement between news publishers and the Alliance de la Presse d’Information Générale (APIG), where publishers make a deal with Google to showcase their articles in search results for a negotiated fee, rather than just exposure. A similar program called Google News Showcase is in place in Germany and Brazil already.

The Australian law would force Google to pay for links to news sites, not for the content of the articles. 

John Hinds, president of lobbying group News Media Canada, thinks that the Australian model may be the way to go, and stated that “it’s the most effective model because it also has a code of conduct that also deals with some of the advertising issues beyond simply the idea of paying for content.”

The click economy relies on big services such as Facebook and Google to get eyes on pages. It was a mutually beneficial partnership for years, as news sites relied on the coverage that Google and Facebook could give them. In return, pages like Google and Facebook benefitted from consumers using their platforms by both finding and sharing articles. Both publishers and social sites take in ad revenue from the consumer looking at their respective pages.

Delphine Halgand-Mishra, senior fellow at CIGI argued that, “knowing that this article has a production cost to bring reliable information, then it is only fair that the media get a portion of the ad-revenue the online service providers gained thanks to users reading the article and spending time on the platform.”

Fey added that “Google’s concern is likely that if it agrees to what Australia proposes other countries will follow. That boat has left the dock. Google’s ultimatum is not in its best interest since, in the end, it would only lose market share if it begins to pull out of countries.”

This fight comes at a pivotal point in the information age (or misinformation age).

Traditional reporting has been falling on hard times since the internet became commonplace, not just in terms of diminished readership but also in the loss of advertising revenue. Ever since 2000, revenue for newspapers in both advertising and circulation has been unstable and declining, ad revenue dropping 44 per cent between 2006 and 2009 alone. Confidence in the news continues to be low, and layoffs in newsrooms only serve to compound the troubles.

The need for reporting did not go away, however, and reliable information has only since gone up in importance. The internet removed barriers to accessing information, while not proposing a way to pay for said information.

The path forward is not entirely clear now. These rules appear to be in defiance of net neutrality, the idea that the internet is a level playing field. Many different sets of rules are likely to be rolled out across the globe, with Australia and France perhaps only early forerunners of a larger movement.

“New problems could always arise from new legislation,” argued Halgand-Mishra.

“The devil is always in the details. No legislation is ever perfect. I think this legislation will mostly change the way Google pays news providers. Google will not pay in its own terms anymore.”


Graphic by Taylor Reddam

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