Google out to keep its free lunch

Faced with having to pay for news content, internet giant Google has put on a histrionic display that proves the company is well prepared to exploit its market power for corporate ends. Google is encouraging users of its products worldwide to join a social media pile-on against the Australian government and its competition regulator, the Australian Competition & Consumer Commission. Recommendations from the ACCC that Google be forced to negotiate with publishers on what to pay for news has been a long time coming and could become law this year.

It is no doubt seen by Google as the continuation of a decades-long global effort by government to make internet companies operate under the same norms of business as everybody else. This applies to competition, market dominance and the laws of copyright. Google’s response is a re-run of tactics employed to head off earlier attempts at proper regulation in the US and in Europe. Congress in the US abandoned what had been bipartisan legislation to defend intellectual property rights when faced with Google-led public pressure a decade ago. In 2018-19 Google ran a similar campaign asking YouTube users to protest against proposed copyright laws in Europe.

The Times newspaper exposed in August 2018 that Google was helping to fund a website that encouraged people to spam politicians and newspapers with automated messages backing its policy goals. The company has yet to explain exactly why YouTube users around the world will be affected by Australian legislation that does not apply to YouTube. Or exactly what the peril to the platform might be or what the Silicon Valley-based behemoth intends to do about it. The evidence for Google, however, is that earlier attempts to pressure government in this fashion have worked.

Given the regulatory pressures being applied to the tech giants in the US, Europe and Australia, we can expect the online games to continue.

The proposed Australian rules differ from those dropped in Europe because they focus on competition rather than copyright. In Australia, the proposed new code applies to Google Search, Google News and Google Discover. It also will apply to Facebook products Newsfeed, Instagram and the proposed Facebook News Tab. Submissions close on public consultation on August 28 and legislation could be ready for parliament in October. Once it is passed, the tech companies and media companies will have three months to negotiate, at the end of which the process goes to final offer arbitration.

Google’s attempt to disrupt the process shows how high the stakes have become. Whatever happens in Australia will be watched keenly in the US, where the tech giants are facing an antitrust investigation into uncompetitive behaviour. The US has a long history of corporate giants of the day eventually being brought to heel for the public benefit. These include railroad barons, telecommunications giants and Microsoft.

For corporate observers this is the point at which the rubber hits the road for tech companies that have been able to work outside traditional business norms by not having to pay for things supplied by other professionals. As John Durie observed on Tuesday, the lengths to which Google is prepared to go to defend its patch illustrate that there is an inherent value for it in repackaging the original news content produced by others. The company is merely highlighting why it should be prepared to pay news publishers fair compensation. The immediate challenge is for regulators and politicians on all sides to see through Google’s self-interest, act to preserve good business practice by supporting the ACCC recommendations and, in doing so, safeguard the future health and financial wellbeing of journalism.