Australia’s largest commercial news publishers have fired back at Google’s defense that it is similar to a newsagency window in the ongoing debate over establishing a mandatory code of conduct between platforms and publishers. 

In response to the government’s decision to “address bargaining power imbalances” by imposing a binding code of conduct between publishers and digital platforms, Google on Sunday accused the government of moving the goal posts and sought to correct “some misconceptions” about its revenue model.

In a company blog post, Google Australia managing director and VP, Mel Silva claims Google had been “working constructively” with publishers on the code and was “on track” for the original voluntary code of conduct – a view not shared by regulators overseeing the negotiations.

Silva also downplayed Google’s advertising revenue from news content and compared the advertising giant’s role with news publishers to that of a poster in a newsagency. But in the internet age, she says publishers no longer have to pay for that poster.

Google Australia managing director and VP, Mel Silva. Image: LinkedIn.

“Publishers provide posters with headlines for newsagents to display in their windows to help draw customers to buy papers.

“In contrast, Google Search sends readers from Australia and all over the world to the publishers’ sites for free – helping them to generate advertising revenues from those audiences and convert them into paying subscribers.”

According to Google’s Australia boss, the search giant sent more than two billion visits to Australian news sites from Australian users and “billions more” from around the world.

Publishers respond

News Media Works, a group representing News Corp Australia, Nine and Seven West Media issued a response to Silva’s post.

In a statement, News Media Works CEO Peter Miller said, “Google contends that news publishers have long paid newsagents – traditional retailers – to distribute newspapers, acknowledging the value of acquiring audiences. Google also contends it sends readers to newspaper sites for free. 

“This really misses the point. While both newsagents and Google have built their businesses off the back of news, only newsagents pay for the publications and content they distribute.”

Miller also challenged Google’s claims about how constructive it had been in the previous negotiations for a voluntary code of practice.

“It is clear, notwithstanding protestations of the digital platforms that they are working constructively with publishers, the Government and the ACCC were unconvinced of progress in getting to the nub of the issue – digital platforms coming to terms with their bargaining power being recalibrated so that they pay for news.” 

Google’s logic

Google argues it does not make a lot of money from news content in its search results or news channels because, Silva writes, such searches “very rarely return ads” and Google only makes money when a user clicks on the ads (not when they are displayed).

Silva also argues publishers retain control of how their content is displayed in search results, including setting the length of snippets or turning them off altogether.

“All publishers on the internet want to be found by new users, alongside businesses that include news media interests. Publishers have always been able to decide whether their content shows up in Google Search. Most choose to be found via Google to attract more visitors to their sites.”

But with a 90 per cent search engine market share, publishers have little choice but to appear in Google’s results. And each time a user visits Google in search of news their information is tracked well beyond the search page, part of a model that generates Google Australia billions in revenue each year.

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