The Media Bargaining Code Showdown: Google vs Australia

Posted by Julia Foley on Feb 10, 2021. Reading time: 6 mins
Goodbye Google? Will the Big G leave Australia for good?

Imagine a world without Google. That could soon be the reality in Australia as the current government is trying to get Google and Facebook to pay for news content. This new law will fall under the News Media Bargaining Code, a new legislation currently under Senate inquiry.

Google would also be required to give news sites preferential rankings and advanced notice of any algorithm changes for search results. Initially, this concept of having some sort of control on how much power Google has in a particular country is a reasonable request. But the technicality of what Australia is asking from Google is a fundamental change on how a search engine seeks results.

Tim Berners-Lee, regarded as the founder of the world wide web, has argued that asking platforms to pay news media businesses for posting links to their content undermines the concept of a free internet.

In a recent article with The Guardian, he claimed the draft code “risks breaching a fundamental principle of the web by requiring payment for linking between certain content online.” Click here to read more.

Yet Google has already reached an agreement with France to pay news publishers for content. This is a big change in the digital marketing and search industry, as this affects both SEO and SEM businesses. Let's unpack this together.

 

Why is the Australian Government doing this?

It’s important to view this in context of how print and news media has declined over the past 20 years. AlphaBeta data from the 2018 report into the Australian Media Landscape showed from 2002 to 2018, global newspaper revenue fell from $4.4billion USD per year to $3billion USD.

With this substantial decline as the precedent, countered with the fact 81% of all digital advertising is shared by tech giants Facebook and Google, it’s clear to see where the power currently sits.

However, Google and Facebook didn’t “steal” every dollar lost from the print news media market. The Internet Did!

Like many jobs, markets and industries, the creation of the internet has fundamentally changed how industries work and function and, in doing so, has consequently changed the way we consume and enjoy media.

News media companies failed to modernise and adapt to the new digital landscape, which ultimately saw them left behind due to the failures of their own business models.

The Australian Government wants a fair agreement that compensates news outlets for these services. However, it would be wise of us all to take our rose-tinted glasses off for a moment to ask ourselves where the money news publishers would receive would actually be going.

I would look at this media code with scepticism given one of its biggest endorsers is Rupert Murdoch. One can only imagine the conversations and influence the one man who owns the majority of media in Australia would have on Parliament House.

 

What is Google’s Perspective?

Google is arguing that forcing the search engine to pay for organic site links, which they actually funnel traffic towards, is unreasonable.

Not to mention the fact that Google drives traffic to news websites anyway. So, Google has used the threat of leaving Australia without access to their search engine as a response.

However, this is the first digital platforms inquiry by the Australian competition and consumer commission that proposes a fundamental change to alter the internet ecosystem as we know it.

 

Google’s counter-answer for this is the Google News Showcase. They would pay news publishers for featuring snippets of their content in the news feature of Google Search.

This solution is what allowed an agreement to be reached in France, where Google now pays media outlets for news content to appearing this section.

While it’s too early to tell the success of this or even how much this has cost Google, this sets a precedent for all news publishers to be compensated for their content.

Chris Janz, Nine Publishing’s Managing Director argues “the take-it-or-leave-it terms are set by Googleand doesn’t address the bargaining power imbalance of Google’s core search product identified by the ACCC.”

It’s important to note that Google and Facebook combined are larger than the entire Australian Stock Exchange, so the bargaining power is colossal in comparison.

 

What this means for Australians

If Google leaves Australia without their search engine function, it will only drive other search engine competition, where a media code will be in place anyway to compensate publishers for some of their content.

If this is the hard line they are taking, Google leaving the country simply leaves the door open for a competitor to take their place as the search engine of choice. It would also lose the advertising money that ultimately is where Google makes most of their income.

The most concerning outcome is the loss of revenue will undoubtedly be felt by smaller businesses who utilise Google Ads for lead generation. However, it is likely most of this would simply move to another search engine like Bing, or Yahoo. , both of which have PPC functions that can provide ads in similar form to Google.

Alternatively, we could see an increase in search engines like StartPage or DuckDuckGo which purposefully protect data and do not allow advertisers to track users across websites.

Ultimately, it's purely a waiting game until the binding arbitration is over, given Google and Facebook will not accept the code in its current form, and the Australian Government doesn't seem to be backing down either.

While the court of public opinion isn’t going to affect the ultimate outcome of this case, Google just placed the below pop up on all search results.

In terms of Refuel Creative clients, we aren’t convinced Google will follow through with their threat to stop the search function in Australia. They are too profitable, too popular and it sets a dangerous precedent for when other countries attempt to include a media bargaining agreement with them.

We’ll keep up with the changes as they come and keep you informed if significant changes are implemented for the PPC ads.

Such as this important development from The Chaser...

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