Australia’s Proposed Media Code Turns Up the Heat on Google and Facebook
4 MINS READ
Jan 22, 2021 | 22:03 GMT
Highlights
Australia’s pursuit of a media code that would force Facebook and Google to pay for sharing content from local media companies risks pushing the U.S. tech giants to pull some of their services from the country. During a Jan. 22 Australian Senate hearing, Google’s Managing Director for Australia and New Zealand Mel Silva said that if the country’s News Media and Digital Platforms Mandatory Bargaining Code is implemented in its current form, Google would have no choice but to remove Google Search from Australia. Later in the day, Facebook representatives echoed these remarks, threatening to pull Facebook News from Australia. In response to Google’s ultimatum, Prime Minister Morrison said that his country does not respond to threats....
Australia’s pursuit of a media code that would force Facebook and Google to pay for sharing content from local media companies risks pushing the U.S. tech giants to pull some of their services from the country. During a Jan. 22 Australian Senate hearing, Google’s Managing Director for Australia and New Zealand Mel Silva said that if the country’s News Media and Digital Platforms Mandatory Bargaining Code is implemented in its current form, Google would have no choice but to remove Google Search from Australia. Later in the day, Facebook representatives echoed these remarks, threatening to pull Facebook News from Australia. In response to Google’s ultimatum, Prime Minister Morrison said that his country does not respond to threats.
The new media code was formally introduced to parliament in December 2020, where it is now up for debate. The Australian Senate is expected to vote on the code sometime in the first quarter and it could be implemented by mid-2021.
The proposed code would force the two U.S.-based media giants to enter negotiations with Australian publishers over news content, requiring that an arbitrator decide the details of a contract if they cannot come to an agreement. Previously, Australia had argued that these new rules would only impact Google’s news platforms, but uncertainties around implementation raise potential risks for the company’s all-important search function.
Google and Facebook have argued that they are willing to enter agreements with publishers for content, highlighting deals struck in other countries. But both have also said Australia’s rules are far more expansive than other country’s requirements.
Both Google and Facebook have also criticized the proposed Australian code as being biased in publishers’ favor, giving them the upper hand in bargaining. Google has been quite concerned about the code’s requirements for paying for snippets and links, both of which are displayed in Google search results.
Australia’s tussle with Google and Facebook comes as large multinational technology firms face growing global pressure to share revenue with domestic media producers, exacerbated by the economic repercussions of COVID-19. Australia’s disputes with the two companies had been bubbling for some time, but the country’s pandemic-induced economic setbacks over the past year have brought those tensions to a boil.
Previously, Australia had been discussing rules around voluntary agreements. But in April 2020, the Australian Competition and Consumer Commission (ACCC) said that voluntary agreements were unlikely to be reached.
The ACCC’s determination, along with the financial blow Australia’s media companies have suffered amid the COVID-19 pandemic, ultimately led Prime Minister Scott Morrison to direct the commission to draft a mandatory code, yielding the new rules now at the heart of the Facebook and Google dispute.
Google and Facebook have made good on similar threats elsewhere, and could very well do the same in Australia if Canberra proceeds with the media code as-is.
Google followed through with similar threats to remove Google News from Spain at the start of 2015 after the Spanish government imposed a so-called “snippet tax” for using excerpts of news taken from Spanish media outlets.
Broader EU-level requirements have also led Google to change the way that it displays results and the level of snippets shown for news articles and sites. In 2019, for example, Google removed snippets from French Google News searches unless content producers opted out of the right to receive compensation, which led French media outlets to enter talks over concerns about losing site traffic.
However, compared with other global examples, the removal of Google Search in Australia would have a particularly severe impact on Australian businesses well beyond the media sector. While other search engines are available, the pervasive nature and familiarity with Google Search have led Australian companies to optimize their websites with Google directly in mind. In December 2020, Google Search accounted for 94.4% of the Australian search market share. Many other industries are also directly dependent on Google Search as a tool to carry out daily business operations. Its removal would thus create more economic and social pressures in Australia at a time when the country’s economy is already struggling amid the COVID-19 pandemic. To avoid such a disruptive outcome, Canberra will likely try to ultimately quell some of Google and Facebook’s concerns by modifying either the current rules themselves or the arbitration process. Australian legislators, however, remain unlikely to scrap the new media code entirely.
