Doubt cast on Google’s $14bn claims

The tech giant said in a Senate submission that it saves Australians five days a year, time that they otherwise would have spent in a library.

Google threatened on January 22, 2021 to block Australian users from accessing its search service unless the government changed proposed legislation to make the internet giant pay news outlets for their content. (Photo by DENIS CHARLET / AFP)

New analysis has cast doubt on Google’s claims that it delivers $14 billion in value to Australia, with critics contesting the tech giant’s statistics asserting that local users save five days a year using Google, that they would have instead spent at the library.

In its submission to the Senate Committee examining looming media bargaining code legislation, the tech giant said it delivers $14bn worth of benefit to Australian consumers, as well as $39bn to Australian businesses, a figure that it said was “roughly rquivalent to the annual output of Australia’s construction sector.”

“The average Australian user is estimated to save 4.9 days per year through the use of Google Search to find information,” Google says in its report by consultancy outfit AlphaBeta, citing that time as what it would have taken to conduct ‘a search at the library’.

Google Australia VP Mel Silva

The Australia Institute, which is advocating in favour of the new regulation that would force Google and Facebook to pay for news, said in its own report replying to Google‘s analysis that the tech giant has misrepresented its benefits.

“The report falls into the trap of comparing Google with the absence of any realistic alternative at all,” The Australia Institute’s report says.

“The same can be said of the willingness-to-pay study that asks people to put a price on the value of Google. This quite different to asking how much people value Google’s offerings relative to other specific searches, applications, maps and so on. Asking Volkswagen owners to put a value on their Volkswagen is different to asking how much extra they value Volkswagen compared with their next preferred option.”

The director of Australia Insitute’s Centre for Responsibile Technology, Peter Lewis, said that it was unreasonable to think Australians would have spent days in the library were it not for Google.

“Our analysis shows that Google is stretching the truth in its effort to push back against regulation in support of fact-based journalism and the news media,” Mr Lewis told The Australian.

“It follows on from its hyperbolic claims the News Bargaining Code would ‘break the internet’ and crude threats to close search in Australia if it doesn’t get its way.

“No one denies that Google’s innovations have provided benefits to Australians, but their market dominance has also come at a cost – not just the 5,000 journalist jobs that have disappeared in the past decade but in the rise of diversion and discord that their advertising business model promotes.

Peter Lewis. Director, Centre for Responsible Technology.

“Rather than over-egging its economic contribution it would be great to see Google reflecting on its social impact and embracing rather than resisting the ACCC’s program of Democratic Digital Platform Reform.”

An AlphaBeta spokeswoman said the Australia Institute had misinterpreted the objective its research and misinterpreted aspects of the analysis used in the report which led to false conclusions.

“To the author’s point that the time savings from Google Search should have been compared with alternative search engines and not offline methods, this is something that is fully acknowledged in the methodology,” the spokeswoman said.

“This was never intended to be an analysis of the benefits derived from Google versus its competitors – and seeks instead to capture the total benefits presented for Australian consumers and businesses. We stated that clearly in the report.

“It is true that some of these benefits may be reflective of the benefits accrued from the use of rival services that are similar in nature, and we fully acknowledge that. However, that does not preclude the intention of developing an objective analysis of the benefits from Google Search.

“Our methodology acknowledges and accounts for the fact that individuals do conduct more searches when using the online search engine as compared to offline methods, due to the ease of online search. To adjust for this, the estimated time saving from using Google Search has been calibrated downward to avoid exaggerating the impact of online search.”

It comes after Google last week launched its News Showcase product in Australia, 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.

Google declined to comment.