Explaining ACCC vs Google: Clash Over Paying Media Companies For News

Tech giants are facing tremendous pressure to pay publishers for their news content from across the world and Google is preparing for the fight in Australia. Recently, the competition regulator in Australia issued a draft bill- New Media Bargaining Code that wants to force the duopoly Facebook and Google to pay media companies for news.

The question arises, should Australia implement the new rules that will pave the way for other global regulators to follow the suit as the European regulators ramp up the pressure on the digital giants.

Here are all the latest updates you need to know over the row between Google and media companies and can have a huge impact on the regulatory agencies and governments right around the world.

Google’s Tussle With Publishers in Australia

The long-running tension between Facebook and Google with the media companies have been for years over how the former display content, with publishers demanding to be paid by the tech giants for the privilege.

Last month, Australian regulators the Australian Competition and Consumer Commission (ACCC) released a draft code –News Media Bargaining Code.  The code allowed news publishers in the country to negotiate compensation collectively or individually with the two tech companies for sharing or displaying their services. The draft code is aimed to address “bargaining power imbalances” between Australian news businesses and Google and Facebook.

The ACCC proposes a compulsory arbitration process and if the news businesses and digital platforms cannot strike a deal during the three-month negotiation and mediation process then the parties can select an arbitrator or there can be an assigned arbitrator by the Australian Communications and Media Authority. Non-compliance with the code would result in fines up to $10m per breach, three times the benefit obtained or 10% of a digital platform’s annual revenue in Australia, whichever is greater.

The code involves minimum standards that would require digital platforms to give news businesses 28 days’ notice of algorithm change that will affect the referral traffic or the placement of the news. It also requires the tech companies to provide news media businesses clear information about the data they collect through users’ interactions with the news content.

Why Did The Australian Government Introduce The Draft?

Google and Facebook have had a huge impact on Australia’s news industry as there is more than a 20% fall in the number of newspaper and online journalists since 2014 and the duopoly capturing a large share of digital advertising revenues. Earlier the plan was for a voluntary code. However, the Covid-19 pandemic resulted in a decline in advertising and revenues of news businesses as well as delayed the negotiations on payment. This led to the development of a mandatory code by the Australian treasurer, Josh Frydenberg to ensure a fair level playing field for news media companies. 

Google’s Response to the New Draft code

The cacophony over Australia’s proposed News Media Bargaining Code law, which is currently in drafts is gaining momentum with Google publishing an open letter to the users about it. Google users visiting the homepage were presented with an ominous pop-up message that warns, “The way Aussies use Google is at risk” and “their search experience will be hurt by the new regulation.”

This open letter from Google Australia managing director Mel Silva is a bold lobbying move that presents Google’s arguments against the new rules in front of million Australian users. Google argues that the proposed regulation would ‘put their free services at risk’ with data being handed over to big news businesses. 

It also argued that the law ‘forces’ to give an “unfair advantage” to news publishers alone in Google Search and YouTube because they would be given information that would help them “artificially inflate their ranking over everyone else”. The Guardian reports that eligible media companies must meet the criteria of having revenues exceeding $150,000 a year and must have a certain presence in the Australian market. This points out that most larger media houses will have access to the information. Google also said that the law is putting user data at risk.

ACCC Hits Back With A Quick Response

The consumer watchdog was swift in its response, labeling the post as ‘misinformation.’ In the statement released, it said that Google would not be required to charge Australians for its free services unless it chooses to do so. Similarly, Google doesn’t need to share any additional user data unless it wants to.

Google Makes a Comeback

Google issued a strong rebuttal in its response to ACCC claims. It retaliated saying,

“We strongly disagree and are concerned that our view of the Code has been represented this way during a consultation phase.”

In response to the ACCC claims that Google would not be required to charge for free services,  Google explained with an example that the code requires them to provide advance notice over changes in algorithms and said, 

“Even assuming Google could comply with this provision, it would seriously damage our products and user experience. It would impact our ability to continue to show users the most relevant useful results on Google Search and YouTube.”

The search giant also disagreed with ACCC claims that Google would not require to share data and said that the codes require that.

“[It] requires Google to tell news media businesses what user data we collect, what data we supply to them, and ‘how the registered news business corporation can gain access to’ that data which we don’t supply to them.” 

“This goes beyond the current level of data sharing between Google and news publishers.”

What Did Facebook Say?

Facebook had far less to say for now – William Easton,  MD for Australia & New Zealand said in a line,

“We are reviewing the Government’s proposal to understand the impact it will have on the industry, our services and our investment in the news ecosystem in Australia.”

However, Facebook had earlier expressed disappointment over making voluntary ACCC code to mandatory and described the news as “highly substitutable” content.

Will This Make Way For U.S Publishers?

In the U.S, The News Media Alliance, a trade association that represents 2000 publishers is promoting a bill named  Journalism Competition and Preservation Act, a law that would allow news companies to negotiate with online platforms regarding the terms on which content is distributed. However, at present competition law does not allow this.

Regulatory Changes Elsewhere in Europe

Spain and Germany had previously passed similar laws on the usage of news snippets but couldn’t manage to extract payments from Google or Facebook. In 2014, Spain made payments to publishers mandatory, Google chose to shut down its news service. Google threatens a similar response to French new laws as well.

In April this year, France’s competition authority ordered  Google to negotiate with publishers over payment for using their news content – such as images, videos, or article extract. However, Google refused to compensate for displaying the content and setting up a legal fight against new EU copyright laws.

Last year, the EU introduced new copyright rules that require tech companies to license the content from rightsholders.

Does This Mean Google and Facebook Don’t Pay Publishers?

The answer is Yes and No. They pay to some publishers. In June, Google said it would pay certain media outlets it will feature in their news service (not released yet)  in Germany, Australia, and Brazil. Terms of the deal weren’t disclosed. However, after the competition watchdog proposed the new code, Google informed local publishers that plans of licensing products – Publisher Curated News -are put on hold until further notice.

Another BIG Question, What’s Next?

As Google prepares for the ACCC fight, it would be interesting to watch the tide turning in which direction and how this landmark move will change regulations across the world.

The consultation on the draft proposals concludes on 28th August with final legislation is expected to be introduced shortly after the conclusion of consultations.

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