4 Feb 2021

Google vs Australia - the world is watching

From The Detail, 5:00 am on 4 February 2021
Australian Prime Minister Scott Morrison.

Australian Prime Minister Scott Morrison says Australia makes its own rules over how things work there.  Photo: AFP

Google and Facebook are threatening to pull out of Australia over plans to make them pay publishers for their stories.

Today The Detail looks at why the digital giants are looking at the drastic move, and at the backlash - with one Kiwi adman saying it's bully behaviour and Australia should tell them to "go and get stuffed". 

The Financial Times has even compared the situation to the iconic Crocodile Dundee scene where a baddie flourishes a knife at our heroes - only to be trumped by a bigger knife. The message is Google would be better off agreeing to a deal than provoking angry lawmakers.

"The whole world is watching this one," says tech commentator Paul Brislen.

The stoush is over the proposed News Media and Digital Platforms Mandatory Bargaining Code expected to come into force this year.

Australia says it's a world first and will address the bargaining power imbalance between news media businesses and digital platforms.

Google and Facebook say it’s unfair and unworkable, and that the whole model of internet searches relies on links to information being freely available, with the searcher making the choice of which platform to turn to. 

But Brislen tells The Detail's Sharon Brettkelly that when you do an internet search under news stories, the result will pull out not just a headline and a link, but also some of the copy. 

"They're very careful not to have too much copy - just enough so that they can say it's a snippet rather than just cutting and pasting your story and sticking it up online. I think that's where they cross a line. This is them actually republishing RNZ, New Zealand Herald, Stuff, TVNZ - republishing their content and that's quite a different kettle of fish to just sharing a link. That's an added twist to the tale."

Not only that - Google, in a short term experiment, has been burying news links from some commercial media outlets, using an algorithm to hide them - meaning it's not even a neutral platform any more. 

"So now they're deciding who gets to be linked to and who doesn't - and that again is crossing a line," says Brislen. 

News media producers argue Google and Facebook are making money (through advertisements) out of the content they produce, and they want a share of that revenue, especially at a time when many mainstream news organisations are struggling for survival. 

The social media giants say news results are just a tiny fraction of the content they share - less than one percent - and they're willing to hand over a very small amount of money as a result. 

"The impact that these (technology) companies have had on publishers has been absolutely devastating," says Brislen. All of the revenue has gone to digital content." 

In the Australian market, for every $100 spent on advertising, Google gets $53, $28 goes to Facebook, and the remaining $19 is shared by everyone else.  

Google made the threat to pull out of Australia during a Senate inquiry into the proposed new law, but Kiwi adman Ben Goodale says Australia should call their bluff. 

He points out that market was worth $4.3 billion in 2018, and Facebook took more than half a billion.

In today's podcast he talks about the likely result if the tech giants left, and the effect it would have on both Australia and New Zealand.