Google Showcase beside the point, says ACCC chief Rod Sims

The competition watchdog says Google’s newly-launched News Showcase ignores the biggest problem in its relationship with Australia’s publishers.

Prime Minister Scott Morrison, Treasurer Josh Frydenberg and Minister for Communications Paul Fletcher chat with Google CEO Sundar Pichai. Picture: Picture: Adam Taylor

The competition watchdog says Google’s newly-launched News Showcase ignores the biggest problem in its relationship with Australia’s publishers.

Google launched its News Showcase product in Australia on Friday, announcing partnerships with independent publications including The Canberra Times, Crikey and The New Daily as the tech giant looks to sign deals outside of the looming mandatory media bargaining code.

In a blog post Google said that News Showcase would be available to Australian users from Friday, and would initially appear across its Google News product, with plans to sign deals with more publishers and to eventually bring the product to Search.

The launch marks the first time the tech giant will pay publishers for their news content in Australia, and comes just a day after Scott Morrison met Alphabet chief executive Sundar Pichai. Google appears to be backing down from its threats to leave the country if it has to pay for news content, with Mr Morrison declaring after the meeting the tech giant is in a “more positive space” about its Australian future.

But ACCC chair Rod Sims, who has driven the news media bargaining code, said that Showcase still did not address the competition watchdog’s key concerns, including the power imbalance between the tech giants and smaller publishers.

“There has never been as issue with Google offering and doing deals involving Showcase or any other Google service. The issue is whether Showcase, a new service offered by Google, should replace Google Search as the only service subject to the provisions under the code,” he told The Australian.

“If the arbitration only involved Showcase, the assessment under the code would fail to account for the value Google derives from users being able to access news media business content via its core Google Search platform, which is the source of the bargaining power imbalance this code was designed to address.”

The company said it would pay publishers for their “curatorial expertise, for beyond-the-paywall access, and to curate content for story panels”. It said Showcase does not use a pay-per-click model, in contrast to the ACCC’s bargaining code, which would likely result in payments to publishers for clicks to their outlets.

“Today we are happy to announce we are rolling out an initial version of the product to benefit users and publishers in Australia, with a keen focus on leading regional and independent publishers given the importance of local information and the role it plays in people’s everyday lives,” Google‘s head of news, web and publishing product partnerships for APAC Kate Beddoe said.

“As this early version of News Showcase rolls out, the partnerships will provide financial support for some of the country’s most respected independent, local and regional publications including The Canberra Times, The Illawarra Mercury, The Saturday Paper, Crikey, The New Daily, InDaily and The Conversation.

“We are looking forward to bringing more Australian media partners on board in the coming weeks and months as we further build out the experience for publishers and users.”

Google's News Showcase product. Source: Supplied.

The launch follows criticism from multiple media executives, including top-ranking officials from Nine, The Guardian, AAP and News Corp, who each told a recent Senate committee into the bargaining code they had not seen a live, working version of Showcase.

A Nine spokesman told The Australian, “this is what monopolies do.”

“They put an offer, in the form of Google Showcase, but not offer to negotiate,” the spokesman said.

“It has to be all on their terms and that is not an approach we will participate in, we support the legislation the government is proposing as the best way to secure a fair payment for our content.”

Google describes News Showcase as offering an “enhanced storytelling experience” in which users will be able to read entire articles, including in some cases paywalled content, in a similar platform to Apple News, and Facebook’s news tab.

Publishers argue they should be compensated for other content, including snippets in Google Search, rather than merely for articles inside a separate product like Google Showcase.

“Each article linked in a News Showcase panel takes the reader directly to the corresponding page on a publisher’s site, allowing publishers to further grow their business by showing users ads and subscription opportunities,” Ms Beddoe said.

“We’re also making it easier for publishers to learn more about what their readers care about. Publishers are already able to get analytics on their content in a variety of Google products, and in the coming months they will be able to learn even more with News Showcase metrics on Search Console. This means publishers will have more data to better understand which articles and topics interest readers the most.”

The bargaining code, if it becomes law, would force Google and Facebook into mandatory arbitration with publishers if they can’t reach agreements over the value of their content within three months. The tech giants face fines of up to $10m if they don’t comply.