Google claims Media Bargaining Code would ‘break’ search and threaten open internet

Google’s local boss says the government’s attempts to rein in the tech giants would ‘break’ its search engine.

Tech giant Google has issued a response to the government’s News Media Bargaining Code, with local boss Mel Silva declaring the proposed laws would “break” its search engine and are unworkable in their current form.

In a blog post published on Friday, Ms Silva said the code, which was introduced to parliament last week, would require Google to grant news publishers special treatment and would significantly damage its products locally.

“Unfortunately, while the government has made some changes, the legislation still falls far short of a workable code,” Ms Silva said in the post.

“As the legislation goes to a Senate committee for inquiry, it has serious problems that need to be worked through.”

Ms Silva said the code would undermine the concept of an open internet, and misunderstood how Google’s search engine worked.

“No website and no search engine pays to connect people to other websites,” Ms Silva said. “Yet the code would force Google to include and pay for links to news websites in the search results you see,” Ms Silva said.

“This sets the groundwork to unravel the key principles of the open internet people use every day — something neither a search engine nor anyone who enjoys the benefits of the free and open web should accept.”

The executive also criticised the code’s “baseball arbitration” model, in which an arbitrator picks one of the party’s proposals, as unfair.

The “baseball” model has been a key sticking point for Google and fellow tech giant Facebook.

Under the proposed model, an ACMA appointed panel – which the parties pay for – would select one of the final offers from the parties and their decision would be binding.

“[The code] imposes an unfair and unprecedented baseball arbitration model that considers only publishers’ costs, not Google’s; incentivises publishers to make ambit claims and resort to arbitration rather than good-faith negotiations; assumes that the internet has never required payments for links because of ‘bargaining imbalance’; and requires the decision-maker to choose a single ‘final offer’,” Ms Silva said.

Google Australia managing director Melanie Silva. Picture: Supplied.

The laws were introduced to parliament last week and have been sent to a senate committee for discussion.

Ms Silva did not comment on whether Google would follow through on its previous threats to exit the Australian market if the laws were passed.

Facebook is yet to respond to the legislation, but its local boss Will Easton previously described the proposed law as “unprecedented in its reach” and said it sought to regulate every aspect of how the two tech companies do business with news publishers. Facebook has said it would block its Australian users from sharing news on its platform if the laws were to pass.

The proposed laws would hit Google and Facebook with a penalty of $10m, or 10 per cent of annual Australian turnover, if they refuse to negotiate with media organisation in good faith. The two companies would also need to give media companies 14 days’ notice of any algorithm changes that would affect publishers of news.

Facebook and Google have won significant concessions from the government since, with YouTube and Instagram — which are owned by the two companies — struck from the legislation.

Both companies will also be compensated for traffic they provide publishers as party of a new “two-way exchange” principle. The ACCC’s proposal for a 28-day notice period when algorithms which govern how traffic is directed to a publisher has also been halved under the legislation.

Peter Lewis, director of the Australia Institute’s Centre for Responsible Technology, said Google’s statement belied the fact that it did not recognise that professionally produced journalism had value greater than other content.

“The ACCC Media Bargaining Code is an attempt to recognise and embed the value of news content in a commercial context, recognising the public interest in fact-based public discourse,” Mr Lewis said.

“The code recognises that Google’s monopoly on advertising, including their illegal data sharing with Double Click, has created a massive market distortion.

“Australians are watching the way both Google and Facebook respond to the will of their democratically elected leaders.”

The news comes as a coalition of US states filed a fresh antitrust suit against Google, alleging the company illegally abused its monopoly over the technology that delivers ads online.

“We are stunned by the detailed evidence of anti-competitive behaviour and the damning allegations of serious collusion that need thorough investigation,” a News Corp spokesman said.

“To be clear, the core charge is that publishers all over the country have been routinely ripped off, which is bad news for freedom of the press, journalism and an informed society.”