No dirty tactics, ACCC tells tech giants

The ACCC has warned Google against pulling news content in Australia from its search engine.

Facebook and Google say they are disappointed with new measures to be introduced by the government to protect traditional media. Picture: AP

The ACCC has warned Google against pulling news content in Australia from its search engine in reaction to the government’s insistence the technology giant make payments to local media producers for using their journalism to generate online traffic.

Australian Competition & Consumer Commission boss Rod Sims, who will be tasked with drawing up a new mandatory code to force digital platforms to pay media companies, told The Australian that up to 14 per cent of Google searches contained news stories.

“Something between 8 and 14 per cent of searches contain news stories, which clearly means they are of value. There is value on both sides here, and the fact is there’s not payment for content,” he said.

The competition chief said “journalism … often provided the professional effort” to answer Google search queries and often “had the best answers”.

Mr Sims also warned the big tech companies that the new code would have “legislative backing” and companies would have to comply or risk big fines.

“This is a mandatory process, it’s something that will be put in place by law,’’ he said. “So it will be enforceable and there will be penalties for not complying.

“I’m confident we could put something together that will work in the interest of both the platforms and successful media in Australia.”

Spanish authorities had tried to force Google News to pay for individual story clicks, a model rejected by the company and ¬resulting in Google News pulling its Spanish service.

The French competition regulator only two weeks ago forced Google and Facebook to sit down with media companies alleging an “abuse of dominance and abuse of economic ¬dependence” by Google, whose parent company Alphabet had revenues of $US134bn in 2019. Mr Sims said he did not think Google would seek to block news content from users as there was clearly value in the distribution for the tech giants, with news ¬stories going well beyond just Google News.

“I don’t think Google wants to run a platform completely devoid of all media content,” he said.

“I think that would be a strange way to run a platform and it might open them up to competition from a source that they may not want.”

Josh Frydenberg said it was “time the tech titans were held to account” as he declared the plan would force Google and Facebook to pay millions of dollars a year to publishers. “It is time the tech titans were held to account and we have genuine competition, we have a level playing field, we have more transparency, and we get payment for original journalistic content.”

The Treasurer said there were a “number of different options” to force the tech giants to pay media companies, with a model to be designed by the ACCC.

“You can do it on a value ¬option, or you can do it on a cost option, meaning that the tech ¬titans would end up paying a fraction of what the cost was for producing that original content every time that they use it,” Mr Frydenberg said.

“The other alternative is in terms of the value to that particular digital platform that they get from getting eyeballs on to their sites by using that content.”

He said the government would not bow to the threats of Google and Facebook that ¬occurred through attempted crackdowns in France and Spain.

“In France, the digital platforms said they wouldn’t show domestic media unless it was for free,” he said.

“The domestic media companies all said this was a misuse of market power, which now the French regulator is investigating. But we understand the challenge we face.”

While Mr Sims would not speculate on a model for the new code, he said it would be dependent on defining news, as well as governing transparency of news ranking, data sharing and revenue sharing.

“Different people have different views on what constitutes news,” he said. “Then it’s got to deal with transparency of news ranking and data sharing, but also it will deal with the value-sharing payment for content issues.”

News Corp (publisher of The Australian) has previously told the ACCC that all major news publishers in Australia — including the ABC — should come to an agreement with the tech giants before content can continue to be displayed on platforms.

This would stop a “divide and conquer” tactic by Google and Facebook that would allow one publisher on the platform at the expense of others.

Facebook Australia’s managing director, Will Easton, said the company was “disappointed” by the government decision, given that it had invested “millions of dollars” to support local ¬publishers.

A spokesman for Google said the US-based tech giant had begun constructive talks with 25 Australian publishers and was committed to continuing talks under the compulsory code.