Google’s implied threat to abandon Australian Search

Would Google really withdraw its Search function in Australia?

Google is considering withdrawing its search functions from the Australian market if it doesn’t get the changes it wants to the media industry code.

The company hasn’t specifically threatened withdrawal but is making it known that the move is a clear consequence of the imposition of the code.

Given the Australian industry code is being viewed as a test case, such a move would obviously have worldwide ramifications.

The federal government has made clear it backs a formal code to govern the way Google and Facebook compensate media companies for their content used by the platform.

The threatened withdrawal from the Australian market would be designed to be seen globally as a consequence of the action.

One issue of any such move would be the reaction of foreign governments, given that the US and Europe are also looking at legal claims against Google.

By effectively thumbing its nose at the Australian government, having previously done the same to the French government, there’s a question of how the US and EC might react.

Presumably the governments are bigger and more powerful than Google, but maybe that is what is being tested.

Commercially the move would also be risky because while Google dominates search with over 95 per cent of the market, withdrawing it would open the door to rivals including Amazon, Bing and Duckduckgo.

The commercial operations of the latter would improve dramatically with more use and in the process pose a threat to Google’s main revenue source, which is advertising.

Search is a primary source of data for Google, which is then used to boost its dominant digital advertising business.

If its data collection is compromised then it won’t be able to dictate terms to advertisers in the same way and hence it would lose revenue.

Just what the balance is would be a question for Google to decide, but at the very least the implied threats highlight the value of news to the platform and are an implicit admission of the need to have access to news to drive its search use.

Google has specific problems with parts of the proposed media code, like the fact it needs to provide 28 days notice of algorithm changes to the news companies.

Google argues by way of example that a publisher like News Corp has multiple titles and an algorithm change which is relevant to say The Australian may not be relevant to another publication.

An answer is to simplify News, which can work it out for itself.

In any case the idea of the draft code was to allow discussion on individual items to ensure when the code is up and running it works fairly and efficiently.

Google and its multiple legal teams are working through each fine point to ensure its concerns are answered.

But maybe if it doesn’t like the end game then it will shut its Australian search functions, forcing Australians to use its rivals.

AMP coming clean

As flagged, AMP has proposed releasing the report prepared by UK barrister Andrew Burns SC on the sexual harassment charges against its newly appointed AMP Capital head Boe Pahari.

The board is giving the complainant the right to review the report before releasing it but as she has already called for its release it should not be an issue.

The board commissioned the report in 2017 when the complaints were first made and the report is understood to have said five of the eight charges were not substantiated while the other three were.

The board reviewed the matter and fined Pahari before later promoting him to his present job as head of AMP Capital .

The fine is understood to be a multiple of the $500,000 previously reported, but AMP is yet to confirm the sum.’

Pahari’s annual bonus in 2017 was $2 million so the reported sum was just a fraction of his pay.

The release of the Burns report is the first defence for the board.

When the document is made public, as requested by Allan Gray and other shareholders, then they can decide whether the board took the right decision.

At the moment there is just one side of the story in public and it is damning of Pahari and the board

This column, among others, has argued for accountability for the decision as Murray championed Pahari when he first took the role.