Google says draft ACCC news code will hurt search, YouTube functions

Google declares it will ‘do everything it can’ to change planned rules on how it deals with media companies and warns YouTube and search could be restricted.

Under the draft mandatory code, announced last month, the tech giants will be forced to pay media outlets for news. Picture: AFP

The consumer watchdog has dismissed as “mis­information’’ warnings from Google that proposed laws the would force it to negotiate a payment to news organisations to include their journalists’ work on its services would lead to a “dramatically worse Google Search and YouTube’’.

The company has begun bombarding Australian Google users with a pop-up notification whenever they do a Google search, saying “the way Aussies use Google is at risk”.

ACCC chairman Rod Sims hit back at claims from Google that it would be required to charge Australians for the use of its services, and share their data with news companies, under the new laws.

He said it was up to Google whether it started charging for its services, including Google Search and YouTube.

“The draft code will allow Australian news businesses to negotiate for fair payment for their journalists’ work that is included on Google services.

“This will address a significant bargaining power imbalance between Australian news media businesses and Google and Facebook,” Mr Sims told The Australian in a statement.

“A healthy news media sector is essential to a well-functioning democracy. We will continue to consult on a draft code with interested parties, including Google.”

Monday’s letter, from Google managing director Mel Silva and addressed to all Australians, foreshadowed that news companies would make “enormous and unreasonable demands” that would put the future of Google Search and YouTube at risk.

Google's pop-up warning about the mandatory code.

“We need to let you know about new government regulation that will hurt how Australians use Google Search and YouTube,” Ms Silva wrote in the letter.

“You’ve always relied on Google Search and YouTube to show you what’s most relevant and helpful to you. We could no longer guarantee that under this law.

“The law would force us to give an unfair advantage to one group of businesses — news media businesses — over everyone else who has a website, YouTube channel or small business.

“News media businesses alone would be given information that would help them artificially inflate their ranking over everyone else, even when someone else provides a better result. We’ve always treated all website owners fairly when it comes to information we share about ranking. “The proposed changes are not fair and mean that Google Search results and YouTube will be worse for you.”

The statement includes several falsehoods, including that “news media businesses alone would be given information [to] artificially inflate their ranking over everyone else”, which isn’t true.

Under the draft mandatory code announced last month, the tech giants will have to pay media outlets for news, and face fines of up to $10m if they fail to treat Australian media companies fairly.

Melanie Silva is managing director of Google Australia & New Zealand.

The digital platforms will also be required to give media companies 28 days’ notice if algorithm changes are likely to materially affect referral traffic to news, and publishers will need to be inform­ed of substantial changes to the display and presentation of news.

Google Australia made $4.8bn in revenue last year, including $4.3bn in advertising.

Josh Frydenberg said he would not be swayed by Google’s threats.

“The draft framework remains open for consultation providing an opportunity for media companies and digital platforms to provide feedback,” the Treasurer said.

Nine Entertainment, which owns commercial television network Nine and a handful of metropolitan newspapers, rejected Google’s claims.

Nine chairman Peter Costello has said revenue from the platforms could be worth $600m annually, while News Corp Australasia executive chairman Michael Miller has said real estimates could be as high as $1bn.

Additional reporting: Lilly Vitorovich