Google inks landmark agreements with Australian media giants

Google and Facebook are taking strikingly different approaches to a proposed Australian legal measure that would require them to pay publishers for using their content.  

On Wednesday, Rupert Murdoch’s News Corp. signed a three-year agreement to be paid by Google for its news content. It follows an earlier deal with Seven West and an expected deal with Nine Entertainment, both Australian media behemoths. The deals are designed to help Google comply with a proposed Australian law that could potentially require it to pay for articles surfaced by its search engine.

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On the same day, Facebook said it would prevent Australian publishers and users from sharing news stories on the social network. 

“The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content,” William Easton, who runs Facebook’s Australia and New Zealand operations, wrote in a blog post. “It has left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia. With a heavy heart, we are choosing the latter.”

The starkly different approaches by the two tech giants come as the Australian government considers the News Media Bargaining Code, which would force the companies to pay news publishers for using their content. Debate over the proposal grew so contentious that Google threatened to pull its search product out of the country. Last week, a Senate committee recommended that the bill, which also covers Facebook, pass through Parliament and become law.

Google’s deals could be harbingers of similar licensing agreements around the world. A member of the European Parliament told CNET last week that he hopes to integrate measures similar to those in Australia’s code into upcoming legislation, and a Canadian minister has cited Australia’s example as reason to push Google and Facebook into paying publishers in his country. 

“If Australia succeeds in passing the law and showing that it works, it could be a precedent for others,” said Daniel Gervais, professor of law at Vanderbilt University, “for Canada, New Zealand and perhaps others.” 

Facebook said the code doesn’t take into account the social network’s role in driving readers to publishers. In the blog post, Easton says news content is less than 4 percent of what people see in their News Feeds but last year “generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million ($315 million).” 

Showcase showtime

If it becomes law, the code would give Google and Facebook 90 days to reach licensing agreements with qualifying Australian publishers for the news content that appears in Google’s search results and Facebook’s feed. If no deal is made, government-appointed arbitrators would hand down a binding decision on how much the tech titans pay. Google worried this could result in it being made to pay for Google search links, which it argued would forsake the principles of an open internet.

The deals with Australia’s media companies are being done through Google News Showcase, a global initiative through which Google has committed $1 billion to news publishers. Outlets that sign up to News Showcase are paid to provide a curated list of stories to appear in Google News apps. Apart from Australia, News Showcase is live in the UK, Brazil, France and Germany. 

Google says it’s “invested significantly” in helping news organizations, including $1 billion in partnerships through News Showcase. The company has partnerships with more than 500 publications.

When News Showcase launched in Australia in early February, the seven publications that originally signed up reportedly received between AU$200,000 and AU$2 million (US$150,000 to US$1.5 million) from Google. When Google previously asked Nine to join News Showcase, Nine balked. “This is what monopolies do, they put an offer, in the form of Google Showcase, but not offer to negotiate,” a Nine spokesperson said in early February. 

So what changed? Sundar Pichai, CEO of Google-parent Alphabet, has reportedly had “constructive” conversations with Australia Prime Minister Scott Morrison. But with the code looking more likely than ever to become law, the prospect of paying news outlets for Google search links appears to have been too costly a risk to run for the tech giant. 

Fair for all

The code isn’t without critics who worry it’ll disproportionately benefit media giants like News Corp, making it harder for smaller publishers to compete. Though the code’s stated aim is to balance the gap in bargaining power between publishers and Big Tech, some worry it doesn’t address the gulf in bargaining power between large and small publishers.

“These deals [with Nine and Seven] show that larger media companies clearly have more bargaining power,” said James Meese, a senior lecturer of media studies at Melbourne’s RMIT University. “It’s important to watch how the code rolls out to make sure that smaller companies can get a fair deal.”

This is an issue that’ll dog governments around the world should they decide to follow Australia’s precedent. It’s already surfaced in France, reports the Australian Broadcasting Corp., as many independent outlets were left out of a $76 million agreement between Google and APIG, a group representing 121 French publishers.