Google’s Aussie threat blasted


Google is sending "warnings" to millions of Australians this week in what looks like the start of a fierce campaign against new rules that could force the firm to pay for the news it uses on its platform.

And the trillion-dollar company is making bold claims to users: alleging proposed laws from the Australian Competition and Consumer Commission will put everything from users' privacy to the viability of Google's free services at risk.

But ACCC chairman Rod Sims branded some of these warnings as "misinformation".

We put these claims to the test against the draft legislation, and this is what you need to know about Google's new "open letter" and what a news code would really mean for everyone.

Communications Minister Paul Fletcher has also blasted Google.

"One of the things that struck me was this item that pops up when you do a google search refers to the 'big media' companies," he told Sky News host Peter Stefanovic on Tuesday.

"Now let's get some numbers in this debate. Google has a market capitalisation of 1200 billion US dollars.

"The market capitalisation of News Corp - the biggest of the Australian news businesses - is $US9 billion. Nine Entertainment Ltd is $US2 billion.

"This language which attempts to characterise one side of this policy interaction as 'big businesses' - and by implication the other side not a big business, let's be clear this is about the proper commercial terms for dealings between news media businesses."

CLAIM: The ACCC news code could "put the free services you use at risk in Australia".

FACT: Only Google can set the price of its products and services in Australia and elsewhere.

As ACCC chairman Rod Sims put it, "Google will not be required to charge Australians for the use of its free services such as Google Search and YouTube unless it chooses to do so".

For context, Google collected $4.8 billion in revenue from Australia in 2019, including $4.3 billion in proceeds from digital advertising. It made $161 billion in revenue worldwide.

And, in January, Google's parent company Alphabet became the fourth tech firm to reach a market cap of more than one trillion dollars.

ACCC chairman Rod Sims headed an 18-month investigation into the dominance of digital platforms in Australia. Picture: AAP
ACCC chairman Rod Sims headed an 18-month investigation into the dominance of digital platforms in Australia. Picture: AAP


CLAIM: "It will create an uneven playing field when it comes to who makes money on YouTube."

FACT: YouTube is not mentioned in the draft law behind the news bargaining code.

The legislation lists Google Discover, News, and Search as "designated digital platform services," along with Facebook's News Feed, including Groups and Pages, Facebook's forthcoming News Tab, and Instagram. YouTube is not named.

Google's "uneven playing field" phrase might also sound familiar.

When announcing the news bargaining code, Federal Treasurer Josh Frydenberg said it was designed to create a "level playing field" for digital platforms and Australian media businesses, which had been forced to work with them.

"It's about a fair go for Australian news media businesses, it's about ensuring that we have increased competition, increased consumer protection, and a sustainable media landscape," Mr Frydenberg said.



CLAIM: "YouTube may be obligated to give large news publishers confidential information about our systems that they could use to try to appear higher in rankings on YouTube, disadvantaging all other creators. This would mean you receive fewer views and earn less."

FACT: YouTube is not named in the draft law and does not fall under the news bargaining code.



CLAIM: "The law would force us to give an unfair advantage to one group of businesses - news media businesses - over everyone else who has a website, YouTube channel or small business. News media businesses alone would be given information that would help them artificially inflate their ranking over everyone else, even when someone else provides a better result."

FACT: News companies will not be able to "game" Google's algorithm to climb search rankings with information they receive under this new code of conduct.

Under the law, Google and Facebook would give registered news organisations 28 days' notice of changes that would "significantly" affect the way their content would be presented online.

Last year, Google Australia managing director Mel Silva said it already provided news organisations with "extensive guidance on search ranking".

Google could also choose to issue notice of these changes to other companies - or publicly publish them - to avoid favouring news organisations.

The news code would also require Facebook and Google to ensure they are "appropriately recognising original news content". Google said it made changes to achieve that last year.

Google Australia managing director Mel Silva wrote an “open letter” to the company’s Australian users that is published on the company’s search page. Picture: Supplied
Google Australia managing director Mel Silva wrote an “open letter” to the company’s Australian users that is published on the company’s search page. Picture: Supplied


CLAIM: "We deeply believe in the importance of news to society. We partner closely with Australian news media businesses - we already pay them millions of dollars and send them billions of free clicks every year. We've offered to pay more to license content."

FACT: Google announced a plan to pay some small Australian publishers for news content in June, just weeks before the announcement of the ACCC's news bargaining code.

Critics branded the move an attempt to evade action widely anticipated from the competition watchdog.

Google has now suspended these deals with outlets including Crikey, The Saturday Paper, and InDaily.

Google says it sends news organisations "free clicks" by using their content on its platform; but that platform also uses the traffic it gets from listing news stories to sell millions of dollars in digital ads every year.



CLAIM: "Big news businesses can demand large amount of money above and beyond what they earn on the platform, leaving fewer funds to invest in you, our creators, and the programs to help you develop your audience in Australia and around the globe."

FACT: Google and Facebook have three months to negotiate with media organisations to decide on payments for the content they create.

If the parties can't agree, each will be asked to make a "final offer" on what they think is fair. An independent arbiter will decide which offer is the "most reasonable" within 45 days.

The model is designed to ensure both parties do not demand "above and beyond" what is fair.


CLAIM: "You trust us with your data and our job is to keep it safe. Under this law, Google has to tell news media businesses "how they can gain access" to data about your use of our products."

FACT: Google and Facebook will be asked to share some data they collect from users but only about how they interact with news content.

The ACCC says this could include "how long users spend on an article, how many articles they consume in a certain time period" and other ways they use news content.

They will not be able to access users' location data, internet search history, contact details, or information about their friends like digital platforms do.

Originally published as Google's Aussie threat blasted