Google today claimed Australian users and content creators will suffer under the incoming News Media Bargaining Code, calling on them to “get involved” in opposing it, and vowing to “do everything we possibly can to get this proposal changed”.

The search and advertising giant today began displaying a warning notice about the proposed regulation on some Australian users’ search page.

Google is including a warning notice about proposed regulation in Australia on its search page.

The draft regulation, developed by the ACCC following extensive investigations into digital platforms and their impact on local media, allows commercial news businesses to bargain with Google and Facebook to be paid for the news the tech giants publish on their services.

The ACCC says the code will address bargaining power imbalances and help fund journalism because the tech giant’s previous refusal to pay for news content has hurt publishers’ advertising revenues.

Under the News Media Bargaining Code, if agreements on paying for news content aren’t reached between Google or Facebook and news publishers within three months the process moves to compulsory arbitration by a media regulator which selects one of either the tech giants’ or the news publishers’ proposals under a binding decision.

Breaches of the agreement can result in large fines and potential legal action with a maximum penalty of the higher of $10 million, 10 per cent of the digital platform’s turnover in Australia in the past 12 months, or three times the benefit obtained by the tech giant as a result of the breach.

The new code and potentially severe penalties makes Australia one of the most aggressive countries in trying to make the tech giants pay for news content.

But Google insists the new code will lead to a “dramatically worse Google Search and YouTube” and could mean it will be forced to surrender data to “big news businesses”.

In an open letter, Google Australia managing director, Mel Silva denounced the regulation, labelling it “not fair” and claiming it would lead to news publishers making “enormous and unreasonable demands that would put our free services at risk”.

Mel Silva, managing director at Google ANZ.

While Google does not charge for most of its online services it uses the data users provide to generate billions of dollars in advertising revenue, dominating the online advertising industry along with Facebook, and helping to make Google parent Alphabet a trillion dollar company. 

Silva says users’ search data may be at risk under the code.

“Under this law, Google has to tell news media businesses “how they can gain access” to data about your use of our products,” Silva writes. “There’s no way of knowing if any data handed over would be protected, or how it might be used by news media businesses.”

However, analysis of the new rules by UNSW associate professor Rob Nichols found tech giant would not be required to hand over user data

“There will be an obligation on Google and Facebook to give businesses clear information about the nature and availability of user data collected through users’ interactions with the news,” Nicholls wrote in The Conversation last month when the code was revealed.

“This does not mean Google or Facebook must share the data itself — only that news businesses will be informed of what kind of data are being collected.”

YouTubers will face ‘negative consequences’

Today, head of Youtube APAC, Gautam Anand, claimed the new rules will harm smaller content creators, despite Youtube not being covered under the code unless both parties agree.

Anand does not mention this in in a blog post published today but argues the code “provides unfair advantages to large news businesses over anyone else online, including the very creators that make YouTube, YouTube”.

The regional head of Youtube says the company may be obligated to give large news publishers “confidential information” about search algorithms that would give them an advantage over other Youtube creators. He also claims the payments to news publishers would leave fewer funds to pay other Youtubers, and, like Silva, suggests user data is at risk of being handed over to news publishers.

Anand writes, “The imbalances created by this proposed law could potentially affect all types of Australian creators, far beyond those who focus on news: from vloggers, to educational creators, to music artists and beyond. 

Anand says there is more coming from Google on the issue, including ways for users to “get involved”.

The draft code is open for public consultation until the end of this month.

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