Despite major concessions to Facebook and Google in the latest version of the news media bargaining code, it remains “unworkable” according to the search giant who now argues it will place the entire open internet at risk.

Google says the code – an arbitration mechanism used to force digital platforms to pay for news content they use if an agreement can’t otherwise be reached with publishers – would “fundamentally break” how search engines work and “sets the groundwork to unravel the key principles of the open internet”.

The legislation enabling the code was revealed last week, including several concessions to the tech giants that had not been included in the previous proposal. Most notably any negotiations that end in arbitration must now consider the two way value exchange between publishers and platforms.

Both Google and Facebook had lobbied hard against the code all year, threatening to withdraw services and arguing any revenue they generate from publisher’s news content is eclipsed by the exposure and traffic they send back. Both companies estimate the value they provide major news publishers to be hundreds of millions of dollars.

Nine was incensed at the concessions to the tech giants last week, telling Which-50 the late change “only entrenches both their monopoly power and the significantly unfair imbalance in regulation”.

Mel Silva, VP at Google ANZ.

Google declined to comment immediately when the legislation was released but in a lengthy blog post Thursday Google Australia & New Zealand VP Mel Silva made it clear the tech giant still isn’t satisfied.

Silva claims the code will force Google to pay for and include links in search results, give news publishers “special treatment” by sharing planned changes to algorithms, and subject the search giant to an “unfair” arbitration model.

“We’ve identified these issues repeatedly during the consultation process because they would do serious damage to the fundamentals of our services — the reasons Australians choose to use Google in the first place,” Silva wrote.

“They would replace a search engine model that’s built to serve everyone with one skewed to the interests of one type of business only.”

No news

Silva says Google is not against the code but it must be “workable”. The tech giant’s vision is one where it negotiates commercial deals with publishers through its own news offering, News Showcase, and only uses arbitration that considers both Google’s value to publishers and its own expenses.

News Showcase is a global initiative from Google to pay some editorial expenses in exchange for content also displayed on its own news app. Google has suggested publishers would have some input on which stories appear on Showcase, theoretically opening up more in depth coverage and context by making them less beholden to ranking algorithms. 

Silva writes that Showcase could be used as the basis for commercial deals with publishers in Australia, and the code only used as a “backstop” and only if the arbitration is changed to be a “fair” one.

“The current model still isn’t based in commercial reality,” Silva writes. ‘Ultimately, by imposing final-offer arbitration with biased criteria, it encourages publishers to go to arbitration rather than reaching an agreement.

Google says it has already signed partnerships with Australian publishers for News Showcase but is threatening to hold back the service in Australia if the news media bargaining code goes ahead as currently proposed. 

Silva goes on to dispute claims the tech giant “uses” news content and has “taken” ad revenue from publishers.

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