Media reforms: Google’s new tactic on service it threatened to withdraw

Australian internet surfers have woken up to Google’s latest intervention this morning as the tech giant ramps up its fight against the federal government.

Google has added another weapon to its arsenal in a fight with the federal government over the future of Australian news.

Australians surfing Google on Friday morning were met with a link criticising the government’s proposal to make the tech giant pay Australian outlets for original news content.

“You may have heard about a proposed law. We are willing to pay to support journalism,” it said, linking to a video message from Google Australia and New Zealand managing director Mel Silva.

Ms Silva threatened to remove the Search function in Australia altogether last week in a dramatic escalation of the fight.

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Australian Google users have been linked to a message from the company criticising the federal government's media reforms. Picture: Supplied

In the video, Ms Silva claimed the reforms would “break how Google works in Australia”, saying it would signal users “no longer having a free and open web”.

“I know that sounds pretty full on, but it’s true,” she said.

“Imagine your friend asks for a coffee-shop recommendation, so you tell them about few nearby so they can go and choose one and go get a coffee.

“Then you get a bill to get all the coffee shops simply because you mentioned a few of them.”

A Google spokesperson defended the link on Friday, telling saying it was designed to inform users.

“We’re providing information to our users, as we have the entire way through this process, to ensure they know our position - which is that we are willing to pay to support Australian journalism and are proposing reasonable changes to the law to make it workable,” they said.

Josh Frydenberg insists the government will push ahead with its ‘world-leading’ reforms. Picture: NCA NewsWire / Daniel Pockett

“Withdrawal of Google Search from Australia is our worst case scenario and the last thing we want to have happen––but the Code, as it stands, would leave us with no real choice.”

Treasurer Josh Frydenberg would not be drawn on the comments on Friday, but said the government would push ahead with its reforms.

“The Morrison Government is committed to proceeding with its world-leading mandatory code which addresses the significant bargaining power imbalance between news media businesses and digital platforms and awaits the final report of the committee,” he told NCA NewsWire.

Traditional media outlets have faced shrinking advertising revenues as news content moves increasingly online.

They have backed the government’s proposal, calling for a greater slice of Google’s advertising revenue.

Ms Silva conceded last week that news accounted for only 1.25 per cent of searches conducted on the platform but insisted the reforms would make Google Search unviable.

Google has threatened to walk away from the Australian market over the government’s proposal. Picture: Denis Charlet / AFP

Walking away would cost Google more than $4bn in revenue it reported last year.

But with 95 per cent of searches conducted on the platform, Australians would also be forced to find an alternative.

The government has encouraged tech giants, including Google and Facebook, to strike agreements outside of its framework.

But the laws would establish an independent arbitrator to decide between each side’s proposal if an agreement could not be reached.

Google claimed its Google News Showcase program provided a superior alternative to the government’s media code.

Under the Showcase model, Google would pay news organisations to give users access to a limited range of paywalled articles.

But news outlets have criticised the program, arguing it was based on a price set by Google that was not transparently explained.

NCA NewsWire has reached out to Google and Communications Minister Paul Fletcher for comment.

ACCC chair Rod Sims says Google is ‘remarkably dominant’ in the ad tech industry. Picture: Sean Davey

Google admitted to temporarily hiding some Australian news sites from around 1 per cent of its users, arguing the move was a “test” necessitated by the government’s proposal.

But independent senator Rex Patrick accused the company of mirroring the Chinese government by strong-arming all of Australia over a law it did not approve of.

It comes after the Australian Competition and Consumer Commission (ACCC) warned on Thursday that Google held a “remarkably dominant” grip on the $3.4bn ad tech market.

ACCC chair Rod Sims said the tech giant had an incentive to preference its own ad tech businesses online in what could be a conflict of interest.

That dominance was exacerbated by Google’s unrivalled access to data, which it denied its competitors in the ad tech space, Mr Sims said.

Google said it was “one of many players” in the industry and was working constructively with the ACC to establish a “healthy ad tech ecosystem”.