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Google agrees to pay French publishers for news, but threatens to exit Australia if media code becomes law

In a high-stakes drama unfolding across the globe, Google indicated just how much it’s willing to bend, before it reaches what it considers to be a breaking point. 

First, in a major digital copyright deal announced yesterday, Google said it will pay French publishers for news. 

The agreement comes after several months of talks between Google France and the Alliance de la Presse d’Information Generale (APIG), which represents France’s media groups. 

It establishes a framework within which Google will negotiate individual licensing agreements with publishers, and allow for participation in News Showcase, a new licencing program recently launched by Google to provide readers access to enriched content.

“Today’s agreement with APIG is a major step forward. It confirms Google’s commitment to compensate publishers appropriately under French law, and opens up new opportunities for our publisher partners. We are happy to contribute to the development of news publishers in the digital age, to further support journalism.”

Sébastien Missoffe, CEO of Google France

Not many other details were disclosed, including how much money would be distributed to publishers, and exactly how the remuneration would be calculated. 

France was the first country to adopt contentious new EU copyright laws which made digital platforms liable for infringements. The deal, which Google describes as a sustainable way to pay publishers, is likely to be closely watched by other platforms such as Facebook, a lawyer involved in the talks said.

Meanwhile, the scenario played out very differently down under. 

Just hours after Google reached the content-payment deal with French news publishers, the internet giant threatened to massively limit its services in Australia.

Australia’s antitrust authority—the Australian Competition and Consumer Commission (ACCC)—has introduced new rules to force digital platforms to pay news publishers, but Google refuses to play ball.

The code sets out a framework to force digital platforms to pay media companies for news content, requires Google and Facebook to enter mandatory arbitration with media companies if they cannot reach agreement over the value of their content within three months, and requires the platforms to give the news businesses 14 days’ notice of algorithm changes.

There are also non-discrimination provisions to stop the tech giants taking retaliatory action such as removing content or punishing organisations that participate in the code.

Google threatened to pull its search engine from the entire country if the news media bargaining code, in its current form, goes into effect.

Google Australia and New Zealand VP Mel Silva said that the proposed law remained “unworkable”, and the company was prepared to exit the Australian market.

“If this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia,” Silva told Australia’s Senate Economics Legislation Committee, adding that it “would set an untenable precedent for our businesses and the digital economy. It’s not compatible with how search engines work or how the internet works.”

“We have had to conclude after looking at the legislation in detail we do not see a way, with the financial and operational risks, that we could continue to offer a service in Australia.”

Mel Silva, Google Australia and New Zealand VP

She described the ultimatum as a “worst case scenario,” adding: “It’s not a threat. It’s a reality.”

Google is getting some strong support in defence of this argument. 

The inventor of the World Wide Web, Tim Berners-Lee, has also raised concerns that Australia’s proposed code could fundamentally break the internet as we know it. 

Facebook executives, who also gave evidence at the Senate hearing, also vehemently rejected the code in its current form, according to The Sydney Morning Herald.

Simon Milner, Facebook’s VP for public policy Asia-Pacific, restated the company’s ultimatum that it may resort to blocking news content on its Australian site. He said the move would be “a potential worse case consequence”, adding it was “absolutely not a threat” but designed to inform the policy process.

“The great majority of people who are using Facebook would continue to be able to do so, but we would no longer be able to provide news as part of the Facebook product,” Milner said, adding that having news content on Facebook provided “almost no commercial value to Facebook”.

The ACCC on the other hand believes the proposed law addresses “a significant bargaining power imbalance between Australian news media businesses and Google and Facebook.” The duopoly doesn’t concur.

“We’ve assessed the impact of this legislation on our business and it is untenable risk for our Australian operations.”

Mel Silva, Google Australia and New Zealand VP

In Silva’s opening statement and an accompanying post on the Google blog, the company proposed technical amendments that would allow it to pay publishers for value, without breaking Search. 

It also pointed out that Google simply links news and doesn’t show full articles, it isn’t the reason for the decline in newspaper revenue, and that Google contributes $53 billion in benefits to Australia each year. 

The United States government has also asked Australia to scrap the proposed laws, and suggested Australia should pursue a voluntary code instead.

“We don’t respond to threats,” Australia Prime Minister Scott Morrison fired back after Google threatened to pull Search from Australia. “Australia makes our rules for things you can do in Australia. That’s done in our parliament. It’s done by our government. And that’s how things work here in Australia.”

Right now, over 94% of web searches in Australia are done on Google. If both sides refuse to budge, the most popular search engine by far might simply disappear overnight from the country. 

Just yesterday we’d warned publishers that the Internet as we know it is changing. We just had no inkling how soon those words might come true!