Watchdog calls out big tech on ‘rubbish’ news claims

If there is no money in news for Google and Facebook why don’t they just leave the news market entirely? Picture: AFP

Rod Sims has called out Google and Facebook over claims they don’t make any money from news media for what they are: rubbish.

The big techs have done a good job so far of conflating issues of payments for advertising on news story searches and Google News while ignoring the broader issue of the overall benefit they derive from the presence of original journalism on their platforms.

While the ACCC is rightly looking into the opaque digital advertising market in Australia and how it interacts with media and other competitors, perhaps not enough attention is paid to the self-evident value of journalism to tech giants.

On Tuesday, Rod Sims made the point explicitly, highlighting the fact tech giants make money from news’s very existence on their platforms, but also pointed to the difficulties in quantifying costs.

“Clearly the biggest benefit is not the direct benefit, which is the ads shown against news items. That’s the really, really small benefit. The bigger benefit is the indirect value that Google and Facebook gain from having news on their platform,” Mr Sims said on Tuesday.

“You can calculate that in a range of ways by saying, look, we know it’s more than zero, but we don’t think it’s any more than another number.”

As Sims recently told The Australian, according to ACCC’s own research up to 14 per cent of all Google searches reveal news stories written by a journalist and published by a news organisation. That’s not Google News, rather all Google searches.

Think about what that number means in terms of the billions of searches on Google’s search engine, people remaining on Google platforms, looking at ads and using other Google products? How could big tech seriously claim there’s no value there?

Google’s managing director in Australia Mel Silva did just that recently, making the broad argument that Google doesn’t make money from news.

“Google Search doesn’t make any money when a user clicks on a news search result, rather when users click on ads.”

“News.google.com has no ads, nor does the news results tab on the search page. And even more broadly, searches for journalistic related queries are a very small proportion of all searches and very rarely return ads.”

Incidentally this came just days before Google reported advertising revenue of $4.3bn in the Australian market alone, up from $3.7bn a year ago.

The same can be said of Facebook.

Assuming you’re one of the 2.6 million monthly active users of Facebook globally do me a favour and scroll down your Facebook feed. How soon is it until you hit a news story that you or a friend has shared or commented on?

The amount of news on Facebook keeps you spending crucial time on the platform and interacting with others.

To put another way, if there is no money in news for Google and Facebook why don’t they just leave the news market entirely? The obvious answer is in doing so they would sacrifice all the market share they’ve established profiting from original journalism.