Why Google caved to Australia, and didn’t
Illustration: Alex Castro / The Verge
On February 16th, I wrote that Australia’s News Media Bargaining Code threatened to splinter the internet.
On February 17th, the splintering arrived: Google cut a deal with News Corp.
that will ensure its services continue to be provided in Australia, and walked away from the bargaining table and began preventing people from sharing news links from Australian publishers around the world.
I think basically did the right thing, and Google basically did the wrong thing, even though Google had a much tougher call to make. Today, let’s talk about why the tech giants made the decisions that they did, why Australia’s shakedown is rotten, and what’s ly to happen next. (If you didn’t read my piece on the subject, it offers a lot of useful context for what follows.)
In development for three years, the bargaining code is intended to give Australia’s heavily concentrated media industry more leverage as publishers seek direct payment from Google and for the right to display links to their work.
It does this by forcing the platforms into binding arbitration with publishers who bring cases, and puts the decision for how much the platform has to pay the publishers into the hands of the arbiter.
Each side throws out a number, and the arbiter picks the one they think is most fair.
By design, the arbitration process favors the publisher. Also by design, it encourages platforms to avoid the process altogether by signing one-off deals with individual publishers in hopes that they can get better terms that way.
Over the past few days, Google has been signing deals with the biggest publishers in Australia for exactly this reason.
Seven West Media got a deal, Nine Entertainment got a deal, and on Wednesday, one of the country’s biggest conglomerates — Rupert Murdoch’s News Corp. — got its deal.
In exchange for an undisclosed sum, Google will feature News Corp. articles in its News Showcase product in Australia and beyond.
“Among the News Corp publications joining Google News Showcase will be the Wall Street Journal, Barron’s, MarketWatch, and the New York Post; in the UK: the Times and the Sunday Times; and the Sun; and in Australia a range of news platforms, including the Australian, news.com.au, Sky News, and multiple metropolitan and local titles,” the company told me in a statement.
As announced, the deals pertain to Google News Showcase, a tab within Google News that contains licensed content from official partners.
But the people I’ve spoken with are operating under the assumption that if there’s a deal between Google and a big publisher in Australia, that publisher either can’t or won’t be dragged to arbitration for showing links and snippets of text in search results.
Search, of course, is what Google cares about the most, which explains why the company caved. Removing links to news stories from Google would break the search engine in Australia, opening it up to rivals. And so the company signed a bunch of deals under duress.
(It’s worth mentioning that any Australian publisher aggrieved by an unfair exchange of value with Google here could opt search results at any time by adding one line of HTML to their website. But almost none of them do because traffic from Google drives significant advertising and subscription revenue to them.)
With its moves today, Google has now invited every other country to pursue a similar protection racket. Parliament members in Canada and the European Union have already endorsed measures similar to Australia’s. And a basic tenet of the open web — that hyperlinks can be freely displayed on any website — just took a body blow.
I’d feel better about this if publishers said a single word about how much of their new Google revenue they planned to spend on journalists’ salaries or news gathering.
They didn’t, though, and why would they? Australia’s bargaining code doesn’t say one word about requiring that any of this money be spent on journalism, either.
Un Google, ’s core service doesn’t rely heavily on news articles. The company estimates that only about 4 percent of posts on the network are works of journalism. It is not all that hard to imagine opening up and scrolling for a few minutes, never to see a link to a news article at all — and in fact, millions of people do this every day.
And so it is perhaps less surprising that when Google blinked at Australia’s demand, walked away. Here’s William Easton, ’s managing director for Australia and New Zealand:
While the government has made some changes, the proposed law fundamentally fails to understand how our services work.
Unfortunately, this means people and news organisations in Australia are now restricted from posting news links and sharing or viewing Australian and international news content on .
Globally, posting and sharing news links from Australian publishers is also restricted.
To do this, we are using a combination of technologies to restrict news content and we will have processes to review any content that was inadvertently removed.
And just that, news articles originating in Australia disappeared from .
Easton says that in the past year, sent more than 5 billion clicks to Australian publishers, whose value he estimated at AU$407 million. If the current situation holds, will send those same publishers zero clicks — a move that, I imagine, may force publishers to recalibrate in their minds the relative value that and publishers provide one another.
Of course, many critics were apoplectic that had taken this move, calling it a vile act of censorship, unchecked greed, and destruction of the public sphere.
Certainly the execution of the ban left something to be desired.
Rather than building a blacklist of news sites to restrict, tried using its machine learning systems to identify news publishers, and the systems went predictably haywire.
There were reports that government and emergency pages, nonprofit groups, and the Bureau of Meteorology could no longer share.
Given how long the possibility of restricting links has loomed, you’d think would have better prepared for it to arrive.
And while I don’t want to make light of these mistakes, to the extent that they teach ’s user base to seek their news elsewhere, they can serve a noble purpose.
I don’t know a single journalist who feels comfortable with social networks being anyone’s primary source of news, particularly after years of daily reporting on the misinformation and conspiracy theories that so often thrive on them.
And so it is more than a little strange to see so many people insisting that is obligated to share publishers’ content, on whatever terms those publishers set.
Some, OneZero’s Will Oremus, have noted that removing high-quality news sources from will ly mean a boost for lower-quality blog posts, memes, and other junk. That seems fair, and I do think it bears watching.
But what if, in the meantime, Australians simply… visit websites? Subscribe to newsletters? Read… books? I realize I sound hopelessly naive here.
But if this is the beginning of more people coming to understand the value in visiting trusted news sources directly, I think we’d all be better off. Publishers included!
In reality, though, I suspect the great Australian news outage of 2021 will be short-lived. Australia’s treasurer, a leading figure in the negotiations, said he spoke with Mark Zuckerberg today and that negotiations continue.
(Fun fact from The New York Times: Australia’s treasurer was also “the best man at the wedding of Ryan Stokes, who is a son of Kerry Stokes, the billionaire owner of Seven West Media, one of the companies that have reached a deal with Google.”)
“We will continue to engage with the government on amendments to the law, with the aim of achieving a stable, fair path for both and publishers,” told me today when I asked for an update.
In the meantime, though, I’m glad called publishers’ bluffs.
III. What’s next
I wish Australia would take ’s rejection as a sign it should rethink its approach to media regulation entirely. It could just tax companies their revenues, for example.
It could earmark those revenues to support journalism — nonprofit public media, even, which has consistently been shown to have powerful civic benefits.
Or it could pursue a bargaining code that requires big media conglomerates to create and support jobs in journalism, rather than simply accept tens of millions of dollars and spend them however they — or just return it to shareholders.
In reality, though, none of that seems ly to happen. Google’s capitulation means that Australian crony capitalism is now ly to be exported worldwide.
Legacy media outlets will become richer — and also more dependent on the tech giants that they excoriate daily for having too much power over them.
All the while, the media industry will continue to consolidate, and it will be harder to get or keep a job in journalism.
A bargaining code that truly sought to level the playing field between the platforms and the public would take these realities into account. There is still time to amend it before Parliament takes a vote, and here’s hoping that lawmakers do — both in Australia and beyond it.
This column was co-published with Platformer, a daily newsletter about Big Tech and democracy.
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Why banned (and then unbanned) news in Australia
is blocking Australians from sharing news links in response to a proposed law that would force the company to pay for news. Robert Cianflone/Getty Images
If you’re an Australian user who loves to share the news on your timeline, you may have noticed something different recently: You can’t.
In the next few days, though, things should go back to normal.
Less than a week after suddenly banning news links for Australian users and shutting down Australian news pages to protest an upcoming law, says it’s gotten reassurances from the Australian government that it won’t be forced to pay publishers but will instead be given the chance to negotiate agreements with them — which it’s already starting to do. According to the Sydney Morning Herald, has agreed to pay the major Australian media company Seven West Media for news content and is in negotiations with another called Nine Entertainment.
Australia has now passed the News Media and Digital Platforms Mandatory Bargaining Code, which could force and Google to pay publishers if they host their content.
The law is a response to years-long complaints from news outlets around the world about the role that Google and — and their mammoth digital ad businesses — have played in the decline of journalism and the decimation of its business model in the internet age.
The two companies responded to the then-potential law in very different ways: Google made deals with Australian news publishers; decided to cut them off entirely.
After a few days of Australians seeing what was without the news, a sizable amount of worldwide backlash against the company, and talks with the Australian government that resulted in a few last-minute changes to the law, decided that the new terms were good enough for its ban to end. The law passed a few days later.
Previously, had banned all users from sharing links to Australian news sources, Australian publications’ pages from hosting any of their own content, and Australian users from sharing any news links, Australian or international. Here’s what the platform looked during the great news blackout:
This is what happened when anyone in the world tried to share a link to an Australian news source. This is what Australia’s news pages looked .
also blocked anything it thought was an Australian news source — which included several sites that were decidedly not news outlets. There were reports of government pages being restricted, for example. (Also, bike trails.)
Even non-Australian news pages, Vox.com, were blocked for Australian users.
The overzealous ban, however, was apparently intentional and maybe even a little bit punitive.
“As the law does not provide a clear guidance on the definition of news content, we have taken a broad definition in order to respect the law as drafted,” told Recode when it initially imposed the ban. “However, we will reverse any Pages that are inadvertently impacted.”
Australian Prime Minister Scott Morrison said ’s move would only make his government more determined to pass the law — and might encourage a few other governments to do something similar.
“’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing,” Morrison wrote in a post.
“These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of BigTech companies who think they are bigger than governments and that the rules should not apply to them.”
He added: “We will not be intimidated by BigTech seeking to pressure our Parliament as it votes on our important News Media Bargaining Code.”
The law hated but Google is learning (and paying) to live with
The law, which passed on Thursday, says that digital platforms and Google have to pay news organizations if their content is featured on those platforms, in Google search results or shares, unless they make enough deals with those organizations outside of the law.
If the platforms and the publishers can’t come to a payment agreement, they’ll go before an arbiter who will decide a fair price for them that they will have to pay, or else face significant penalties.
The treasury minister decides which digital platforms are subject to the law.
Google and , who dominate a digital ad business that pays them billions of dollars while news organizations go bankrupt, have been vehemently opposed to the law. Over the past several months, both have threatened to take their services away from Australians if it were to pass.
Google blinked first, and began working out payment deals with Australian publications. A week ago, it announced a deal with Rupert Murdoch’s News Corp.
Murdoch, Australia’s exceedingly rich and powerful news magnate and native son, has been very vocal about wanting a law that forces digital platforms to pay his publications, and he may well have influenced the country’s decision to move forward with this law.
News Corp now has a multi-year deal with Google. Terms were not disclosed, but the New York Times reported it was worth tens of millions of dollars. Google also made a deal with Australia’s Seven West Media and has agreed to work out licensing deals with French publications as France considers a similar law.
, obviously, took a different tack. Its stated reasoning was that if Australians can’t share news links, and Australian news organizations can’t post their own content, then Australia’s law won’t apply to it — after all, there’s nothing to pay media companies for.
But there’s also no law in place yet. cut off Australian news publications before it really had to, which gave them, their government, and their readers a taste of what was to come if the media law went through.
might have been hoping that a preview of its platform without Australian news would make lawmakers more amenable to passing a version of the law that preferred. Now that Australian lawmakers have, in fact, added a few amendments, it seems that gamble was correct.
will still have to pay for the news one way or the other if it wants its platform to host links, but it has a little bit more control than it did before.
might be in the right here. It depends on whom you believe
While some have cheered Australia’s move, reasoning that anything that gets tech companies to pay news organizations back for the content (or ad dollars) they’ve used to build their own platforms is a net positive, other media analysts believe the law is a case of the government forcing companies to pay other companies — specifically, those owned by one of that government’s richest and most influential (former) citizens. What was well-intentioned may end up only making rich people even richer, with little benefit to anyone else.
Journalism professor Jeff Jarvis called the law a case of “media blackmail” and said Google had “caved” to “the devil Murdoch.” , he said, either “stood on principle” or just decided news content for Australian users wasn’t worth enough to the company to have to pay for it.
But others pointed out that the way went about standing on that principle may have done more harm than good; that suddenly depriving users of a service on which they’ve come to rely (including pages that have nothing to do with the news that also got caught in the ban) will only make them angry at , not Murdoch or the Australian government. And the rest of the world wouldn’t look kindly on for the move, either.
“ managed to turn attention away from a flawed piece of legislation and on to its own reckless, opaque power,” wrote Emily Bell, director of the Tow Center for Digital Journalism at Columbia Journalism School. “Even for a company that specializes in public relations disasters, this was quite an achievement.”
said last week that it didn’t think the law “recognizes the realities of how our services work.” The social network believes that it’s actually the publishers that benefit from , not the other way around.
“Last year generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million,” said. (Take those figures, which have not been independently verified, with a very large grain of salt.
) And apparently barely needs news articles, which the company says makes up “less than four percent of the content people see in their News Feed.
” That might be because has, in recent years, intentionally deemphasized news links in News Feeds in favor of posts from friends and family, and removed the “Trending” box that featured links to news articles.
In fact, said, it lets news organizations use its services for free, posting links to their articles for users, who then click on those links and give those news organizations precious traffic.
What didn’t say was that this traffic isn’t worth nearly as much to those publishers as it could be, because and Google control the majority of the digital ads market and make most of the money from it, rather than the outlets whose content those ads are posted on.
This is why Australia wants to force them to pay those publishers fairly in the first place.
A few other places, including France and Canada — and even the much larger European Union — have suggested they might follow Australia’s lead, too.
claims that it’s not opposed to paying news organizations and had wanted to launch in Australia News, a platform on which the company would pay publishers to license their content, as it’s already doing in the United States and the United Kingdom. Those deals would, of course, be on ’s terms.
a boomerang, comes back around
The standoff came to an end less than a week after it started, with both sides claiming victory.
“After further discussions with the Australian government, we have come to an agreement that will allow us to support the publishers we choose to, including small and local publishers,” VP of global news partnerships Campbell Brown said in a statement to Recode. “We’re restoring news on in Australia in the coming days.”
The Australian government said it was introducing “further amendments” to the law, which appear to give more time to work out deals with news organizations and make investments in journalism, helping it avoid the mandatory arbitration it’s been so against. It’s very possible that the law won’t actually apply to anyone in the end, because and Google will be voluntarily paying enough news organizations to avoid it.
’s Brown also said that could very well re-ban the news in Australia if it doesn’t how things are going: “Going forward, the government has clarified we will retain the ability to decide if news appears on so that we won’t automatically be subject to a forced negotiation.”
In Australia, the question now becomes which news organizations will truly benefit from the law, or if most of that money is going to the major players with very little left for the small, non-Murdoch publications the law was supposed to help. If Google and are able to work out enough deals that the law no longer applies to them, smaller publications may still be left to accept whatever they’re offered. They may be the ultimate losers here.
Globally, this has shown that Google and will pay for news, but that they’ll do as much as possible for it to be on their own terms. was willing to cut off Australia’s news pages and links to bully an entire country passing a law it didn’t .
It may have won a few concessions here, but the rest of the world — including the United States, which is currently considering if Big Tech companies have too much power — may not have taken the lesson from this that wants them to.
Countries may be more motivated than ever to check ’s power before it gets much greater.
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