Google pushing MPs to reject 'one-sided' code to have them pay for news

Google is pushing Australian MPs hard to recognise the value of the traffic the search engine provides to news organisations as it fights against what it says are unprecedented content laws.

In a briefing document used to lobby members of Parliament, the tech giant calls for key changes to the draft media bargaining code, which if legislated will force Google and Facebook to pay news organisations for using their content.

Google is pushing hard against Australia's efforts to get digital giants to pay for news.Credit: ROB HOMER

The document, obtained by The Sydney Morning Herald and The Age, details Google's intense objection to the final offer arbitration process - a core component of the draft laws - which it describes as "completely unreasonable and unprecedented".

Under the draft code, the parties have three months to broker a payment before they are forced to enter a binding "final offer" process, at which point an arbitrator will choose one of the parties' proposed offers. If both offers raise significant public interest concerns the arbitrator will have the power to adjust the more reasonable of the two offers.

Google says the code is "silent" on the value the tech giant provides to news organisations, giving "well-resourced and savvy" publishers the opportunity to "exploit the mechanism with ambit claims".

"The arbitration model set by the draft code is so one-sided as to effectively prescribe the transfer of revenue from Google to Australian news businesses registered under the code without any recognition of the benefit news businesses derive from Google or Google's costs," the document says.

Google claims it directed more than three billion visits to Australian news publishers in 2018, worth about $218 million.

Australian Competition and Consumer Commission chair Rod Sims, who was tasked by government to develop the code, last month ruled out scrapping the arbitration mechanism from the final version of the code, which he is expected to hand to the government this month.

The government says it will attempt to legislate the code before the end of the year.

In the document, Google also calls for the proposed fines of $10 million or up to 10 per cent of local revenue for breaches of the code to be scrapped. It also objects to the requirement to provide news organisations with 28 days advance notice of changes to its algorithm, describing it as "practically unworkable".

It says the draft code should "should be withdrawn, or substantially redrafted, before it is considered by Parliament".

The ACCC argues Google and Facebook — two of the world biggest companies — are the dominant gateways between news media organisations and audiences, and have disrupted the advertising market.

Mr Sims has accused Google of spreading "misinformation" after it told Australians it could be required to charge for its services. He also said the draft code will change after consultation.

"But the core of the code can't change. You need an arbitration mechanism. You need a non-discrimination clause. They are the bits of glue that hold the code together that make it workable," he said in September.

The Australian Industry Group sent a submission to the ACCC arguing against an "extreme instance of regulatory overreach" that it says will detract from competition and welfare.

"The arbitration process appears to encourage ambit claims rather than negotiation," Ai Group's submission says.

"It also appears that the range of factors that arbitrators must consider is very much weighted towards the interests of news organisations."

Mr Sims will address the National Press Club on Wednesday.

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