Tag Archives: Australia

Australia’s media code won’t allow fair negotiations

Over the past month, we’ve outlined our concerns with Australia’s draft News Media Bargaining Code: a new proposed law that would impact the way Australians use Google Search and YouTube. We don’t oppose a code governing the relationship between news businesses and digital platforms—but right now the way the law is drafted isn’t fair or workable.  


Last week, we proposed changes to help move us forward. Today, we want to go into more detail about one of our biggest concerns—the highly unusual, largely untested, one-sided arbitration system that would determine commercial arrangements between Google and news companies.


Here are the issues.

Unprecedented in Australia

The system being proposed is called ‘binding final-offer arbitration’, referred to in the United States as ‘baseball arbitration’. It isn’t used in any of the eight other mandatory codes in Australia. In fact, without the two parties’ consent, it’s never been used in Australian law before.

In a standard negotiation, two parties negotiate a price for a product or service after assessing its market value and the value each side provides the other. If the parties can’t reach an agreement, they might ask a mediator or arbitrator to decide on what’s fair. 

In baseball arbitration, if the two sides can’t reach an agreement, each puts forward a single final offer and the arbitrator picks one, guided by set criteria. 

Unreasonable claims 

This system is usually put in place if there’s not much dispute over the value of the product or service being discussed and the parties are already close in price. But with the media code, some of the amounts being suggested by news businesses about how much we should pay to provide links to their stories defy commercial reality. 

One news business has already claimed digital platforms should pay $1 billion every year, despite the fact that only 1 percent of all searches by Australians last year were seeking news—equating to around $10 million dollars in revenue (not profit). 

Clearly, both sides have very different ideas of what the prices should be—and asking the arbitrator to pick a ‘final offer’ is an extreme way of resolving that. The reality is that baseball arbitration often fails and doesn’t produce quick outcomes. Independent economists have raised questions about its effectiveness here. 

The results are also unpredictable, and no business can operate with that level of uncertainty.

The playing field is not level

The fundamental idea of baseball arbitration is that both sides present their evidence— like the player’s contribution, the team’s recent performance and comparable salaries—and the arbitrator decides the appropriate offer. 

But the draft code doesn’t provide a level playing field.

As it stands, the arbitrator isn’t required to consider the value Google provides to news media businesses in the form of traffic to their websites, which in 2018 was estimated at more than $200 million per year. 

Not only is that unfair—it goes against what the Australian Competition and Consumer Commission (ACCC) itself said should happen when it was preparing the code: “Negotiations around compensation for the use of news should also take into account the value that Google and Facebook already provide to news media businesses for using their news content.”

News media businesses can also make enormous financial demands of Google based on the vague and flawed concept of the ‘indirect’ value that news content provides (our data shows that the direct value of news to Google is negligible). Even the ACCC itself hasn’t been able to put a number on the indirect value of news, after several years of inquiry.

When the playing field is set up to favor one side, then that side is encouraged to make ambit, or exaggerated, claims.

A question of costs

But that’s not the only one-sided rule here.


The draft code also says the arbitrator should consider news businesses’ production costs — but not Google’s. 


Again, that’s a significant amount of money, givenwe invest $1 billion each year in Australia to improve the services 22 million Australians use daily. This investment includes initiatives to directly support Australian news companies, like our digital skills training program for local newsrooms.


The only other factor the arbitrator must consider when deciding on a payment is that it must not place ‘an undue burden’ on Google. It’s a vague and undefined condition and an insufficient substitute for being able to talk about our actual value and costs.

A fair and workable solution


In all of the submissions to the ACCC, only one news business proposed binding final-offer arbitration be used in the code. Many requested that the code use standard arbitration—a method regularly used for resolving disputes in Australia and around the world. We are happy to negotiate fairly and, if needed, see a standard dispute resolution scheme in place. But given the inherent problems with baseball arbitration, and the unfair rules that underpin it here, the  model being proposed isn’t workable for Google. It wouldn’t be workable for many Australian businesses—no matter how large or small they are. 


As we’ve said, we are committed to finding viable solutions, and we will continue to engage with the ACCC and the Government to ensure the final version of the code is fair and workable for all.

Small businesses and Australia’s Media Bargaining Code

In what has been an incredibly tough year, Australia’s small and medium businesses have kept our economic engine going—protecting jobs and providing vital services in their communities. 



Throughout this time, we’ve made sure business owners know Google’s tools and services are there to help. Small businesses are using our affordable ad services to advertise where they couldn’t before, and connecting with new customers via free listings on Search and Maps. We’ve also helped businesses operate online through national digital skills training



As Australia starts to look towards economic recovery, we’re concerned that many of these businesses will be affected by a new law being proposed by the Australian Government—the News Media Bargaining Code—which would put the digital tools they rely on at risk. 



While we don’t oppose a code governing the relationship between digital platforms and news businesses, the current draft Code has implications for everyone, not just digital platforms and media businesses. We wanted to explain our concerns and how we believe they can be addressed in a way that works for all businesses. 



How does the Code impact small businesses? 



The draft code affects small businesses because it would weaken Google services like Search and YouTube. These services created more than 130 million connections between business and potential customers in 2019, and contributed to the $35 billion in benefits we generated for more than 1.3 million businesses across the country. But they rely on Search and YouTube working the same for everyone—so that people can trust that the results they see are useful and authoritative, and businesses know they’re on a level playing field. 



Under the draft code, we’d be forced to give some news businesses privileged access to data and information—including about changes to our search algorithms—enabling them to feature more prominently in search results at the expense of other businesses, website owners and creators. 




For example, a cafe owner might have made their way to the top spot in Search results for a particular query over time, thanks to popularity, search interest and other signals. But if the draft code became law—giving some publishers an advanced look at algorithm changes—they could potentially take advantage of this and make their web content appear more prominently in search results. 



Likewise, if you ran an independent travel website that provides advice to people on how to plan local holidays, you might lose out to a newspaper travel section because they’ve had a sneak peek at changes to how Search works. 



That’s an unfair advantage for news businesses. Businesses of all kinds would face an additional hurdle at a time when it’s more important than ever to connect with their customers. 



A bad precedent 



The draft code would also create a mandatory negotiation and arbitration model that only takes into account the costs and value created by one party—news businesses. The code’s provisions mean costs are uncapped and unquantifiable, and there is no detail on what formula is used to calculate payment. 



Regulation framed in this way would set a bad precedent. Most businesses support sensible regulation—but not heavy-handed rules that favour one group of companies over all others. Australian entrepreneurs like Mike Cannon-Brooks, Matt Barrie and Daniel Petrie have made the point that a market intervention like this would deter international companies from operating in Australia, risking jobs and investment just as we need to be focusing on the recovery from COVID-19. 



And it’s not just business leaders who’ve spoken out. Over the last few weeks, we’ve heard a cross-section of Australia’s business community, from local retailers and restaurants to YouTube creators, and we’re deeply grateful for their support. 



The way forward 



The issues with the draft code are serious, but we believe they can be worked through in a way that protects full and fair access to Search and YouTube for every Australian business. We’ve made it clear that we want to contribute to a strong future for Australian news, and we’re engaging constructively with the Government and the ACCC to try to find a resolution — making proposals for changes that would support a workable code



Throughout 2020, we’ve worked with business owners across Australia to help them get through the challenges of the fires and the pandemic, whether by providing digital tools, direct assistance, skills training or advice, and we hope to continue providing that support long into the future. 



We know how tough this year has been, and we’re going to keep doing everything we can to make sure that the final version of the code supports Australia’s amazing businesses.

Small business and Australia’s media bargaining code

In what has been an incredibly tough year, Australia’s small and medium businesses have kept our economic engine going—protecting jobs and providing vital services in their communities. 


Throughout this time, we’ve made sure business owners know Google’s tools and services are there to help. Small businesses are using our affordable ad services to advertise where they couldn’t before, and connecting with new customers via free listings on Search and Maps. We’ve also helped businesses operate online through national digital skills training.


As Australia starts to look towards economic recovery, we’re concerned that many of these businesses will be affected by a new law being proposed by the Australian Government—the News Media Bargaining Code—which would put the digital tools they rely on at risk. 


While we don’t oppose a code governing the relationship between digital platforms and news businesses, the current draft code has implications for everyone, not just digital platforms and media businesses. We wanted to explain our concerns and how we believe they can be addressed in a way that works for all businesses.  


How does the code impact small businesses? 


The draft code affects small businesses because it would weaken Google services like Search and YouTube. These services created more than 130 million connections between businesses and potential customers in 2019, and contributed to the $35 billion in benefits we generated for more than 1.3 million businesses across the country. But they rely on Search and YouTube working the same for everyone—so that people can trust that the results they see are useful and authoritative, and businesses know they’re on a level playing field.


Under the draft code, we’d be forced to give some news businesses privileged access to data and information—including about changes to our search algorithms—enabling them to feature more prominently in search results at the expense of other businesses, website owners and creators. 


News GIF

For example, a cafe owner might have made their way to the top spot in Search results for a particular query over time, thanks to popularity, search interest and other signals. But if the draft code became law—giving some publishers an advanced look at algorithm changes—they could potentially take advantage of this and make their web content appear more prominently in search results.


Likewise, if you ran an independent travel website that provides advice to people on how to plan local holidays, you might lose out to a newspaper travel section because they’ve had a sneak peek at changes to how Search works.


That’s an unfair advantage for news businesses. Businesses of all kinds would face an additional hurdle at a time when it’s more important than ever to connect with their customers.

A bad precedent

The draft code would also create a mandatory negotiation and arbitration model that only takes into account the costs and value created by one party—news businesses. The code’s provisions mean costs are uncapped and unquantifiable, and there is no detail on what formula is used to calculate payment.

Regulation framed in this way would set a bad precedent. Most businesses support sensible regulation—but not heavy-handed rules that favour one group of companies over all others.  

Australian entrepreneurs like Mike Cannon-Brooks, Matt Barrie and Daniel Petrie have made the point that a market intervention like this would deter international companies from operating in Australia, risking jobs and investment just as we need to be focusing on the recovery from COVID-19. 

And it’s not just business leaders who’ve spoken out. Over the last few weeks, we’ve heard from a cross-section of Australia’s business community, from local retailers and restaurants to YouTube creators, and we’re deeply grateful for their support.    

The way forward

The issues with the draft code are serious, but we believe they can be worked through in a way that protects full and fair access to Search and YouTube for every Australian business.  

We’ve made it clear that we want to contribute to a strong future for Australian news, and we’re engaging constructively with the Government and the ACCC to try to find a resolution — making proposals for changes that would support a workable code

Throughout 2020, we’ve worked with business owners across Australia to help them get through the challenges of the fires and the pandemic, whether by providing digital tools, direct assistance, skills training or advice, and we hope to continue providing that support long into the future.  

We know how tough this year has been, and we’re going to keep doing everything we can to make sure that the final version of the code supports Australia’s amazing businesses.

Black Rainbow creates fund for the future

This is a guest blog post from Black Rainbow, an emergent organisation that is 100% Aboriginal and Torres Strait Islander LGBTIQSB led. Black Rainbow is a national Aboriginal and Torres Strait Islander Lesbian, Gay, Bisexual, Transgender, Intersex, Queer, Sistergirl and Brotherboy (LGBQTISB) organisation in the pursuit of positive health and well-being for Aboriginal and Torres Strait Islander LGBQTISB.


The COVID-related global health inequities faced by Indigenous and LGBTIQSB peoples as stand alone communities are becoming increasingly documented. However, data on those who identify as Aboriginal and/or Torres Strait Islander and LGBTIQ remain visibly absent. This absence was unfortunately no surprise, as the broader population of Aboriginal and Torres Strait Islander peoples continue to be marginalised and excluded.

Black Rainbow has seen some incremental progress with Indigenous LGBTIQSB people being recognised as a distinct population group in the 2019 Close the Gap Report for the first time in its 10-year history. What happens next and how efforts are resourced and mobilised remains to be seen. As with prior Close the Gap targets, additional targets and priority reforms are inadequate and unable to respond to the needs of the Indigenous LGBTIQSB community until we know where we are at across the whole range of targets. As it stands, Aboriginal and Torres Strait Islander LGBTIQSB peoples have zero indicators of our health and well-being status across every indicator which currently only represent our non-LGBTIQSB counterparts. This includes targets across all health, well-being, education, and justice indicators. There’s much work to be done.

We are excited to share several announcements happening in the coming months.


1. Grant funding, support by Google.org, Google’s philanthropic arm

We created an Indigenous LGBTIQSB Futures Fund with the grant funding, which was part of Google.org’s global initiative to support LGBTQ+ organisations worldwide. The Futures Fund has been created to support self-selected career development and enhancement opportunities across all professions. This includes corporate, creative industries, academia and sports. The old adage that ‘you can’t be what you can’t see’ also rings true for our community and the Futures Fund is our attempt to help increase opportunities for Aboriginal and Torres Strait Islander LGBTIQSB peoples.The Futures Fund is for Indigenous LGBTIQSB community members aged 15-35 years. From 2021-25, Black Rainbow will provide grants of up to $1000 to four Indigenous LGBTIQSB recipients each year with 20 individual grants in total.


Expressions of interest for 2021 will open in October 2020. Keep an eye on our social media accounts such as Twitter, Facebook, Instagram, and website for updates on this exciting initiative.


2. Indigenous LGBTIQSB Glossary posters



In 2019, we licensed the use of Aboriginal and Torres Strait Islander LGBTIQSB artists’ work to act as backdrops to glossary posters. Packs of six were sent out to 150+ Aboriginal & Torres Strait Islander organisations nationwide. They are now available for download, free, from our website.


3. Formalisation of our board



In the next month we will be taking perhaps our biggest step forward with the formalisation of our board. For us, this process has been about learning to walk before we try to run and to ensure that our leadership group will continue to have equal weighting in our decision-making processes. Black Rainbow will also be seeking additions to our leadership group toward the end of the year with a view to incorporate valued diverse identities and experiences.


We are thankful for all who have supported us in our close to now seven-year history. Black Rainbow will continue to invest in our commitment to change for Aboriginal and Torres Strait Islander LGBTIQSB community. A community we live and breathe.


Black Rainbow
Them, They, Theirs

A workable publisher code for Australia

Editor's note: This is an opinion piece that was first published in the Australian Financial Review on September 13, 2020. 

The Australian Competition and Consumer Commission's media bargaining code, which is designed to govern the relationship between news media and digital platforms – including how news content should be paid for – will have a big impact on the future of the country's digital economy and millions of Australians who use platforms such as Google’s.


It’s vital we get it right before it becomes law, which is why Google has engaged in good faith with the ACCC inquiry and consultation process since it was launched in 2017.


Our position on the regulation is clear. We do not oppose a code that oversees the relationships between news publishers and digital platforms and we’ve been committed to playing a constructive role in the process from the start. In fact, all the parties involved here agree on two things: journalism is important to democracy, and the business models that fund journalism have changed.


What we oppose is a mandatory bargaining code that’s unworkable, both for Google as a business, and for Australians.


However, contrary to what some have claimed, Google hasn't ‘‘stolen’’ revenue from news publishers. AlphaBeta research conclusively shows that the fall in newspaper revenue between 2002 and 2018 was mainly the result of the loss of classified ads to online classifieds businesses such as Domain, Realestate.com.au, Carsales and Seek. Google’s advertising business grew because it made advertising available to businesses that had previously been priced out.


We don’t ‘‘use’’ or ‘‘steal’’ news content either – we simply help people find what they’re looking for on the internet, and link them to other websites, including news sites. You don’t see full articles on Google.


Just as we contribute to the Australian economy by working with more than a million Australian small and large businesses, supporting almost 120,000 jobs, and paying tens of millions of dollars in tax, we are willing to pay to help news businesses too. As part of our broader efforts to support a strong future for journalism, we are already paying several publishers to license content for a new product, as well as helping train thousands of journalists.


When it comes to new regulation, what we oppose is a mandatory bargaining code that’s unworkable, both for Google as a business, and ultimately for the Australians who depend on our services, from the search engine to YouTube. And right now, the proposed code has critical flaws that need to be addressed.


In its current form, the code would impose a one-sided negotiation and arbitration model that is unlike any other tried-and-tested model applied in Australia. It would consider only the value news businesses are assumed to provide to Google – and ignore the more than $200 million in value that Google sends to publishers each year via ‘‘clicks’’ from search results.


One-sided set-up


It wouldn’t consider our costs or the commercial agreements with publishers we already have in place – and we have no meaningful ability to appeal the arbitration. No business would or should accept this kind of one-sided set-up.


The code would also force us to tell news businesses how they can get access to data about Australians that they don’t already have, raising concerns over how this information would be used. It would require us to give a small group of news businesses 28 days’ notice of significant changes to search and YouTube algorithms and describe how to minimise their effects.


Even if this were technically possible (it isn’t), it would privilege certain Australian news publishers over every other Australian who has a blog, YouTube channel or a small business website, while slowing down improvements to the search function for everyone else.


These issues are serious. But we don’t believe they are insurmountable, and we’re working with the ACCC and the government to help find a way through them. With reasonable changes, we believe the code could be rebalanced in a way that meets its intended purpose and makes it fair to all parties.


The negotiation model could be amended to take account of the value both sides bring to the table, as the ACCC’s own concepts paper advocated in May, and the arbitration rules could be brought into line with commonly used methods in standard arbitration, comparable codes and negotiations.


The requirement to share algorithm changes could be limited to notifying news business about actionable changes, with reasonable notice, and without obliging Google to tell a select few publishers how they can take advantage of the system.


The data-sharing provisions could be tightened to make it clear that Google is not required to share any additional data, over and above what publishers are already entitled to see, protecting information about how people interact with our sites.


The scope of the code could be better defined to apply to designated services that Google provides, rather than being left open-ended.


These changes would help create a fair, workable code. They would mean Australian internet users continue to have full and fair access to Google Search, YouTube and other services. And they would mean that discussions about payments for licensing news content could continue on a normal, commercial basis – rather than being set up as an artificial, one-sided process that is certain to result in unreasonable and uneconomical outcomes.


As the ACCC prepares its final recommendations, we have to see the code in its bigger context.


Australia is a forward-looking country with an open, global economy that attracts investment and job opportunities from around the world. Our technology companies, digital entrepreneurs and engineers are among the best in the world at what they do – and fair access to tools such as Google Search and YouTube is part of that success. Google believes in sensible regulation, but everyone should distrust rules that give special treatment to some over others.


There is a window of opportunity to shape an effective media bargaining code that meets the needs of news businesses, of digital platforms and, above all, of Australians. We should take that opportunity – and then get back to the urgent work of building a strong digital economy that can help fuel Australia’s future.


Environmental Insights Explorer Expands: 100 Australian councils and counting

Environmental Insights Explorer 

Reducing greenhouse gas (GHG) emissions is a crucial step in fighting the climate crisis. And cities now account for more than 70 percent of global emissions. But measuring exactly which activities—whether it’s buildings, cars, or public transport—are contributing to emissions, and by how much, is complex. Without this information, cities can neither understand the challenges they face, nor the impact of their environmental policies. 

This is the problem we’re working to solve with Environmental Insights Explorer (EIE), an online platform that provides building and transportation emissions, as well as solar potential analysis to make it easier for cities to measure progress against their climate action plans. Launched in 2018 for a handful of cities around the world including Melbourne, with Sydney, Canberra and Adelaide then added in 2019, EIE has helped councils accelerate GHG reduction efforts. Today, we’ve expanded EIE data access to thousands of cities worldwide, including 100+ Australian councils. 

To scale data access to local governments, policy makers and community groups, we’re also developing partnerships with leading Australian organisations, councils, and climate change experts. This includes a new partnership with Ironbark Sustainability and Beyond Zero Emissions to make EIE transportation data available for 100+ councils in Snapshot—a free tool that calculates major sources of carbon emissions, including stationary energy, transport, waste, agriculture, and land-use change. Snapshot allows municipalities to easily compare their sources of carbon emissions. This data integration will provide updated GHG profiles and enable local government policy decision-making for more than 86 percent of the country's population to put councils on a fast track for delivering commitments, building local resilience, and ensuring economic recovery. 
Accelerated city-wide analysis 
By analysing Google’s comprehensive global mapping data together with GHG emission factors, EIE estimates city-scale building and transportation carbon emissions data with the ability to drill down into more specific data such as vehicle-kilometres travelled by mode (automobiles, public transit, biking, etc.) and the percentage of emissions generated by residential or non-residential buildings. 
The insights that EIE provides have traditionally required many months of research, and a lot of resources for cities undertaking a climate action plan. Using Google’s proprietary data coupled with machine learning capabilities, we can produce a complete survey of a city that can be assessed very quickly. In this way, EIE allows cities to leapfrog tedious and costly data collection and analysis. 
EIE transport data now available in Snapshot for 100+ councils 

The next chapter 
Over the next few months, we’ll be working together to help Australian councils learn more about data insights from EIE and expand data coverage to more councils. We hope that by making EIE data accessible to more councils across Australia, we’ll help nurture an ecosystem that can bring climate action plans to life. 


Environmental Insights Explorer Expands: 100 Australian councils and counting

Environmental Insights Explorer 

Reducing greenhouse gas (GHG) emissions is a crucial step in fighting the climate crisis. And cities now account for more than 70 percent of global emissions. But measuring exactly which activities—whether it’s buildings, cars, or public transport—are contributing to emissions, and by how much, is complex. Without this information, cities can neither understand the challenges they face, nor the impact of their environmental policies. 

This is the problem we’re working to solve with Environmental Insights Explorer (EIE), an online platform that provides building and transportation emissions, as well as solar potential analysis to make it easier for cities to measure progress against their climate action plans. Launched in 2018 for a handful of cities around the world including Melbourne, with Sydney, Canberra and Adelaide then added in 2019, EIE has helped councils accelerate GHG reduction efforts. Today, we’ve expanded EIE data access to thousands of cities worldwide, including 100+ Australian councils. 

To scale data access to local governments, policy makers and community groups, we’re also developing partnerships with leading Australian organisations, councils, and climate change experts. This includes a new partnership with Ironbark Sustainability and Beyond Zero Emissions to make EIE transportation data available for 100+ councils in Snapshot—a free tool that calculates major sources of carbon emissions, including stationary energy, transport, waste, agriculture, and land-use change. Snapshot allows municipalities to easily compare their sources of carbon emissions. This data integration will provide updated GHG profiles and enable local government policy decision-making for more than 86 percent of the country's population to put councils on a fast track for delivering commitments, building local resilience, and ensuring economic recovery. 
Accelerated city-wide analysis 
By analysing Google’s comprehensive global mapping data together with GHG emission factors, EIE estimates city-scale building and transportation carbon emissions data with the ability to drill down into more specific data such as vehicle-kilometres travelled by mode (automobiles, public transit, biking, etc.) and the percentage of emissions generated by residential or non-residential buildings. 
The insights that EIE provides have traditionally required many months of research, and a lot of resources for cities undertaking a climate action plan. Using Google’s proprietary data coupled with machine learning capabilities, we can produce a complete survey of a city that can be assessed very quickly. In this way, EIE allows cities to leapfrog tedious and costly data collection and analysis. 
EIE transport data now available in Snapshot for 100+ councils 

The next chapter 
Over the next few months, we’ll be working together to help Australian councils learn more about data insights from EIE and expand data coverage to more councils. We hope that by making EIE data accessible to more councils across Australia, we’ll help nurture an ecosystem that can bring climate action plans to life. 


How Google supports the news industry

Many of you have been following developments around the News Media Bargaining Code and what it means for the Google services that you use and love. We’d like to take a step back and answer some fundamental questions we’ve heard about Google’s relationship with news and the news industry.

Just to be clear—Google does not object to the idea of an Australian Code to oversee relationships between news businesses and digital platforms. We have already made agreements to pay publishers for content through a licencing programand several Australian publishers have come on board. But what we don't agree with is a law that’s totally unworkable from a product and business perspective. We know that many voices have called for changes to the current draft law.

Now, to address some key questions we’ve heard from you about Google and news:

Question #1: How does Google use news content?

Google doesn’t “use” news content—we link you to it, just like we link you to every other page on the web—think Wikipedia entries, personal blogs or business websites. We sort through hundreds of billions of webpages to find the most relevant, useful results in a fraction of a second, and present them in a way that helps you find what you’re looking for—and then we take you to the source of that information.

Some large publishers have inaccurately accused us of “stealing” news content, but how we connect people with news content, such as articles from the Herald Sun or the Sydney Morning Herald, is no different than the way Search connects you to your footy team’s home page, a website with your favourite recipes, or official Government websites. We sent more than 3 billion clicks and visitsto Australian news publishers in 2018 - for no charge - allowing these publishers to make money by showing their own ads, showing other articles or converting people into new paying subscribers—driving an estimated $218 million worth of value



Question #2: Do news websites have a choice whether to appear or how to appear in search results?
Yes. Most websites want people to find their content in our Search results, but if a news site (or any other for that matter) doesn’t want to show upor wants to control what is shownon Google, they can choose to do so. They can do that whether their site is paywalled or free to view. 

 

Question #3: Does Google value news content?

Yes. We recognise its role in educating and informing Australians, and in strengthening democracy. But it represents a very small proportion of the websites that people choose to visit from our search results. And it is not financially lucrative for us.

Google makes money from ads and we don't run ads on Google News or the News Tab in Search.

Last year, only a very small percentage of Google Search queries were news-related and Google generated approximately AU$10 million in revenue—not profit—from clicks on ads against news-related queries in Australia. Most of our revenue comes from search queries for highly commercial topics, like when someone searches for 'running shoes' and then clicks on an ad. Businesses want their ads to appear against queries when a user is looking to buy a product or find a good deal. It’s these types of queries that lie at the heart of our Search ads business.

Question #4: Why do you say news queries represent a small proportion of search queries?
People come to Google to find many things, whether it's 'how to' videos, recipes, sport scores, weather forecasts, outfit ideas, or home insurance. News is only a very small part of this content, and represents a tiny proportion of search queries. In fact, we looked at all the billions of searches that Australians typed into Google over the past year, and found that just over 1% of these were news-related. Examples of news-related queries in 2019 are “federal election” or “bushfire”. Queries like “best running shoes”, “burger restaurant near me”, “Dean Lewis new album”, "flu symptoms" and most everything else you can think of, are not. 



Question #5: How does Google financially support news media businesses?

For many years we’ve helped publishers make money by providing tools and technology that helps them sell advertising on their sites. Businesses which advertise with Google can choose to have their ads appear on news publishers’ sites with a few clicks. This removes a lot of the hard work for Australian publishers and gives them access to a huge range of new advertisers - often overseas - who work with Google. Of course we pass on the vast majority of money these advertisers pay us directly to Australian publishers.

More recently we’ve created technology to help publishers drive revenue through subscriptions. In addition, we have developed the Google News Initiative, designed to help journalism adapt to the digital age. In Australia, we have partnered with the Walkley Foundation to deliver free training for up to 5,000 journalists and students in Australia and New Zealand. Nine Australian media organisations have received our Innovation Challenge and YouTube innovation funding. We also provide emergency funding to publishers impacted by COVID-19.

And importantly, in July, we announced a series of new deals to pay to license content for a new news product going live in the next couple of months.



Question #6: Hasn’t Google taken news publishers’ revenue?
Actually, an analysis recently conducted for Google by the economists at AlphaBeta, shows that the loss of newspaper revenue resulted primarily from the loss of classified ads to online classifieds businesses such as Domain, Realestate.com.au, Carsales and Seek. Between 2002 and 2018, newspaper revenue fell from $4.4 billion to $3.0 billion. Of that decline, 92% was from the loss of classified ads, and most of these classified revenues went to specialist online providers that target niches such as job advertisements, second-hand goods, or real estate listings. Almost none went to Google

Posted by Google Australia

De-classified: What really happened to newspapers

In the mid-1990s the status of newspapers as the main source of news to society felt both indisputable and permanent.
The Internet was a novelty. We accessed the web on dial-up modems, surfed pages using Netscape and searched for information on Yahoo!, Excite and Lycos. Around the same time, across the Pacific, Amazon had only just launched an obscure online bookstore. 
In 1995, I began my career as a journalist at The Advertiser in Adelaide. The web was so niche that there were fevered debates about whether we would need one “Internet terminal,” or perhaps two, for an entire newsroom.
Newspapers back then could afford to take their time with technology - there was no rush. They were unassailable and spectacularly profitable, thanks largely to classified advertising. Rupert Murdoch once described classifieds as “rivers of gold”.
Today, as we all know, the landscape is vastly different. The print rivers of gold have dried up, print circulation has sharply declined. On the face of it, the news business has never looked so vulnerable. To me, and anyone else who has worked in print or simply loves newspapers, this has been a painful process. My dad worked in newspapers - it’s in our blood.

Source: AlphaBeta
What happened?
An analysis of the revenues of newspapers over nearly two decades, recently conducted for Google by the economists at AlphaBeta, is revealing - there is no mistaking precisely how and over what time period the old business model for newspapers broke.
In 2002, Australian newspapers collected 96% of all classified advertising, which amounted to $1.6 billion. By 2018, the total classified advertising market had grown to $1.9 billion, but only 12% of that was going to newspapers - the rest has splintered off to specialist online providers such as Domain, Realestate.com.au, Carsales and Seek.
Source: AlphaBeta
Over that same period we moved from sitting at bulky desktop computers with slow connections to carrying a supercomputer in smartphone form, with instant access to news and information. Australian newspaper revenues peaked at $5.5 billion in 2007-08, just as Apple introduced the iPhone. The smartphone in our pocket, able to access the content news publishers made available for free on their websites, was almost a perfect disincentive to buying the next day’s newspaper. We now consume more news, but fewer newspapers.

Source: AlphaBeta
That’s not all that has changed, of course. Over the same period we’ve seen the transformative development of search and social media platforms. Google launched ads in 2003, and it has grown to become a global business as the web itself has expanded to hundreds of billions of pages. Facebook was founded in 2004, and today almost 3 billion people use it to connect with each other around the world. Together they earn billions of dollars in revenue from commercial advertisers in Australia.
A widely held view is that if Google and Facebook didn’t exist, much of this revenue would have stayed with news publishers - that these tech platforms directly disrupted the newspaper business model. But AlphaBeta’s research disproves that theory: it wasn’t Google or Facebook specifically, it was technology in its entirety.

Source: AlphaBeta
Search advertising is an entirely new category which allows businesses that would never have taken out a newspaper ad to reach specific audiences right at the instant they are seeking a product or service. And they only pay if a user actually clicks on their ad. Locally, Google’s advertising customers in Australia include a multitude of small and medium-sized businesses that never would have generated a substantial proportion of a newspaper’s income. If there is an incumbent publisher that has been disrupted by search ads, it’s directory operators like the Yellow Pages.
Source: AlphaBeta
The total Australian advertising market almost doubled between 2002 and 2018 from $8.9 billion to $16.6 billion, and almost all of that growth came from search and social. But to suggest that that money would otherwise have gone to news publishers would require news publishers to have built their own search engines and social platforms. They didn’t.
Every time you use Gumtree to sell a bike, browse Domain for a place to live or flick through Carsales represents the flow of money away from newspapers. Major publishers still own large stakes in these digital classifieds businesses but the revenues no longer fund journalism.
Source: AlphaBeta
However, the AlphaBeta study also offers hope. The business model that was broken is being re-made through technology: distribution, analytics, advertising, subscriptions. Reader contributions and subscriptions are transforming the economics of publishing news.
Source: AlphaBeta
Today we spend greater amounts of time than ever before consuming the news, and there are many innovative new publishers finding readers that would have struggled to get a foothold in the days of the printing press. There are even green shoots of growth amid the COVID destruction - Telum Media reported this week that more than 30 new digital mastheads have emerged just this year.
In the quarter of a century since I first began as a fledgling print journalist the news industry has been radically, often painfully, transformed. It has taken years of trial and error, but there are paths that now lead to publishing profits and prosperity.
It’s my hope that Google can continue to support the news industry, through new products which pay publishers for high-quality content, and continue the work we have been doing for almost two decades in helping newsrooms to find new audiences, engage them with compelling stories and generate new income through digital channels. 

13 things you need to know about the News Media Bargaining Code

Last week, we shared an open letter about our concerns with the News Media Bargaining Code. We know many of you have lots of questions, so we’re taking this opportunity to address the top ones we’ve heard since publishing our letter. 


Question #1: Why is Google against this proposed law? 
We are not against a law that governs the relationships between news businesses and digital platforms. But the current draft Code is unworkable. Our concerns include: 
  1. An obligation to share details about our algorithm changes that would provide an unfair advantage to large news businesses and help them feature more prominently in organic search results at the expense of other businesses, creators and website owners. 
  2. An obligation to tell news media businesses what user data Google collects, what data it supplies to them, and how they “can gain access to the data” which Google does not supply to them, with a lack of detail on safeguards for demands from news businesses for access to sensitive data.
  3. An unfair arbitration process that ignores the real-world value Google provides to news publishers and opens up to enormous and unreasonable demands

Question #2: If this law is just about news, why are you talking about Search? 
The proposed law is not limited to Google News, or the news results tab. It covers “every digital platform service” of Google and Facebook that makes available news content of registered news businesses (s52B, s52L). This means it directly impacts Google Search itself. 


Question #3: Is YouTube included in the proposed law? 
Yes. The Code covers “every digital platform service” Google and Facebook provide that make available news content of registered news businesses (s52B, s52L). Australian media companies upload content to YouTube, which means YouTube will be impacted by the Code. The ACCC Chairman has also said so


Question #4: Why shouldn’t Google give notice of changes to your rankings and algorithms? 
We share general tips on ranking with all website owners already, but this new law would require us to give special notice and explanations to news businesses. This would dramatically worsen how you experience Google Search and YouTube: 
  1. If we are required to give one group special advice about how to get a higher ranking, they’d be able to game the system at the expense of other website owners, businesses and creators, even if that doesn’t provide the best result to you. If we want to keep our algorithms fair for everyone, we would have to stop making any changes in Australia. This would leave Australians with a dramatically worse Search and YouTube experience. 
  2. Additionally, 28-day advance notice is really a 28-day waiting period before we can make important changes to our systems. That’s 28 days before we can roll out defences against new kinds of spam or fraud. 28 days of extra delay before we can launch new features that are already available to the rest of the world. And 28 days before we can fix things that break. To illustrate: in order to give you the most relevant results when you use Search, last year, we launched 3,620 algorithm updates

Question #5: Will Google have to share my Search and YouTube data with news businesses? 
The Code requires us to tell a registered news business how it can “gain access to” data (s52M(2)(e)). This is data that we do not supply to them at the moment. As a reminder, you currently have control over your personal data thanks to easy-to-access tools in your Google Account. If we are required to hand that data over to news organisations, there’s no way to know what controls they will give you, nor how your data will be protected—or how it might be used by news businesses. 


Question #6: Why the sudden move to speak out publicly against this? 
We have been engaged with the Government, the ACCC and news businesses in good faith since a publisher code was first brought up last year. You can read more about the key issues we raised in our submission to the ACCC concept paper and blog posts here and here

Initially this new law was going to be a voluntary code of conduct, and we were making good progress on discussions with news publishers. But in April the Government shifted the goal posts and moved to a proposed mandatory Code. On July 31, the proposal became a new law. We have continued to raise our concerns and make submissions, but unfortunately these have not been reflected in this proposed law. In addition, we thought it’s important to let you know directly about the draft Code and potential harm this would cause to the services you love and rely on - including Search and YouTube. We’ve since heard from thousands of Australians who share our concerns. 


Question #7: Doesn’t the Code contain a negotiation and arbitration process to sort this out? 
Put simply, it's extremely one-sided and unfair––so unfair that no company should be asked to accept it. Just before this law was proposed we had reached agreements with several Australian news organisations to pay them to license their content. 

We're happy to pay more to license content, and want to support journalism as it transitions to a digital future, but a fair negotiation or arbitration should factor in the value both parties provide. 

Under this law the arbitrator is not required to take into account the value we provide news businesses (s52ZP(2)). Google Search referred more than 3 billion visits to news businesses’ websites last year, which is estimated to be worth around $218 million—and this doesn’t include the many other ways we support publishers. The arbitrator is also not required to look at the significant costs we incur in providing our services, or the value of comparable deals, which would be the starting point for any standard arbitration. 

All it looks at is the news organisation’s costs, its content’s value to Google, and whether the payment would put an undue burden on the digital platform. That means bigger news organisations with higher costs and more content will get paid more. Because of all this, the law is set up to encourage enormous and unreasonable demands


Question #8: Are you going to charge for your services? 
No. We never said that the proposed law would require us to charge Australians for Search and YouTube. What we did say is that Search and YouTube, which are free services, are at risk in Australia. 


Question #9: Why are you saying your services are at risk? 
First, the very nature of our search engine and YouTube is to surface the best information. If one group is given special information and notice, and can game the rankings at the expense of others, we can’t provide the best service. Having to disclose information about ranking would harm our services in Australia and around the world. 

Second, the proposed law contains provisions that are difficult to comply with while providing a useful service, and if we can’t, the law imposes ruinous fines and liability - up to 10 percent of our turnover for each breach of the law. 

Third, the arbitration is set up to encourage news businesses to make unreasonable and exorbitant financial demands. News queries account for just over 1% of our total search queries in Australia. We have news partners in other countries, as well as countless other categories of websites and content that people search for. It simply isn’t viable for us, or any digital platform, to pay unreasonable and exorbitant amounts to one group in one country. 


Question #10: Why won’t you just shut down Google News like you did in Spain, or remove Australian news websites? 
This proposed law is written extremely broadly. If we show Australians any content from any “news publisher” (defined to include any “website”) in the world, we must also show all news content of news businesses registered under the Code. For this purpose, "news" is defined very broadly - way beyond what most of us would consider “news”. This includes covering issues that are of ‘interest to Australians’, including foreign news and citizen journalism - which go well beyond traditional journalism to capture all kinds of information, blogs, videos and websites. That means we’d have to undertake a mass cull of content globally to stop them being visible to Australians - we’d have to remove all foreign newspapers, bloggers, YouTube citizen reporters, but also sports reporting, discussions of global health issues, tweets about current events, and literally endless other types of content from all sources around the world. 


Question #11: Shouldn’t news businesses get a say on how their content is used? 
Of course. All websites can opt out of appearing in Search results, including news media sites, and we share guidance on how to do this. But we find not many news businesses take that step because they value the free referral traffic they get which they can then monetise through ads and new subscribers. If they want to be featured in Search, they can customise how they show up - decide the length of the short summary (called a snippet) of their content, add or remove images or videos. The snippet is then automatically generated from the content, designed to emphasise and preview the page content that best relates to a user's specific search. We've also been working on a new product in which we would pay news publishers for content that they would curate, while still driving traffic to their websites. 


Question #12: What next? 
We help more than 20 million Australians and over one million businesses in Australia. We have invested significantly in this country. We are proud to work with the Government and others to contribute to our economic recovery and a growing digital economy. So we want to make the law workable. At the moment it’s simply not, for the reasons we outlined in our Open Letter and above. We’ll keep working to impress this upon the Government and will keep raising our concerns so Australians know where we stand. 


Question #13: Where can I read more? 
It’s good that there’s now a robust public discussion about this important issue. 
As a start, here is the ACCC’s Draft Legislation
And here is a thorough article by an independent media analyst.