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Google strikes deal with the Australian media company, Seven West Media amid content payment row

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The Australian government has been pushing the enforcement of a law to compensate local news media companies in the country. Amidst the tension between the government and tech giants like Google, Seven West Media became the first Australian company to land a deal with Google. The exact monetary value of this inked deal was not revealed but some sources from Seven West Media said that the deal is worth more than $30 million a year for the media company (The Sydney Morning Herald).

Seven West Media revealed this news on 15th February 2021 and it also mentioned that the company will provide content to Google for the Google News Showcase product. The news Showcase product of Google has been launched recently and the company is paying the local publishers for “certain behind-the-paywall articles” that will go up in this new product. The media company has also mentioned that the deal is a “long-term partnership” with Google but was vague with the exact numbers.

New law enforcement caused tension in January 2021

Last month, tension rose between the tech giant Google and the Australian government as the latter announced the enforcement of a new law. According to this new law which is called the News Media Bargaining Code, tech giants like Google and Facebook have to pay the small news publishers and media companies for content. In response to this new law, Google commented that if this law is enforced then the people of Australia will get barred from receiving quality news in Google.

The response of Google was not taken very politely by the Australian government, as in response to that comment, the Australian government mentioned they are open to any businesses who want to prosper in Australia but they won’t respond to any kind of threat. Since then, a lot of bargaining has been going on and finally the Australian leading media company, Seven West Media successfully landed a paid deal with Google. 

Google-Seven West Media deal

Seven West Media is one of the most leading Australian media channels and the main source of metro newspapers in Perth, Australia. The new deal between the tech giant, Google and the Seven West Media mainly concerns the news that will be published in the Google News Showcase platform. The media company didn’t reveal any terms and conditions of the deal. But, the deal with Google also brings along the news of splitting partnership with News Corp and Nine Entertainment. These leading organizations have failed to reach an agreement with Google and backed laws that are supposed to be passed this week (Gadgets 360).

Google Seven West Media deal

The newly launched product of Google, i.e., the Google News Showcase platform, has gone live in Australia this month. Till now, only some specialist Australian publishers and a newspaper have been able to successfully land a paid deal with Google for their content. Outside Australia, Reuters has successfully struck a deal with Google. In response to the newly inked deal with Google, Kerry Stokes, Chairman of Seven West Media has commented that this deal is a sign of how important is the value of quality journalism in the country, especially in regional areas. Mel Silva, CEO of Google Australia, said that the company is “proud to support original, trusted, and quality journalism” by bringing Seven West onboard for the new Google product.

Google made a small compromise 

Today, we are witnessing a paid deal between Google and Seven West thus uplifting the local news publishers for quality content in Australia. But, last month, Mel Silva clearly mentioned in a parliamentary hearing that if the Australian government enforces this law Google search engines will pull out from Australia. The law said that if Google and a media company cannot strike a deal privately then a negotiator will be given the responsibility to set a fee. But, the deal between Google and Seven West shows that the tech giant made a little compromise from its side to thrive in Australia and not abandon quality news content due to this new law. Last month, Google was furious about the new law, but thinking from the perspective of the Australian government, it is trying to uplift the economic status of the local media publishers and help people value the power of good journalism. 

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Google to block search engine for Australian users if the government enforces new code

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Due to the new law from the Australian government, Google has said that it will shut down the search engine for Australian users if it has to pay for news. According to this new code the Australian government is trying to enforce, big tech companies like Google and Facebook have to pay local media companies for the right to use their content (Reuters). Google has mentioned clearly that if the Australian government enforces this new code, 19 million Australian users will have to face degraded search quality and YouTube experience.

Enforcement of the new code

The Australian government is preparing to pass a law that will make the big tech companies like Facebook and Google negotiate with the local publishers. This means that Google will now have to bargain a payment for these local channels and broadcasters whose contents are displayed in the Google search results. The government has further decided that if the companies among themselves cannot strike a deal then an arbitrator from the Australian government itself will fix a price.

Google is not even considering playing by the rules this time and hence completely declined to negotiate any price with the local publishers. The company has made a public announcement clearly sending the message that if the law is enforced Google search in Australia will degrade. Today, Mel Silva, Managing Director of Google Australia and New Zealand said at a public hearing that if this new code is enforced as law, Google will have no choice but to make Google search engine unavailable in Australia.

Further, Silva spoke about the impact of the new proposed law, that is, the News Media Bargaining code on Australian small businesses, publishers, and users as well. She said that the most concerning part of this new code is to pay for links and snippets in the search which will have a negative impact on the business as well as the digital economy. Silva also mentioned that the company has already reached News Showcase agreements with 7 publishers in Australia. So, with a few slights amendments in this new code, none has to sacrifice or adjust here a great deal to use Google.

How did Australia respond to Google’s reaction?

Since Google mentioned clearly that if the new law is enforced, Google will have no choice but to block the search engine for Australian users, Scott Morrison, Prime Minister of Australia has made few sharp comments. In response to Google’s comment, Morrison said that in Australia they have rules for “things you can do in Australia.” He further mentioned that those who will abide by these laws are most welcome to work in Australia but the country will not respond to any form of threats.

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Apart from Morrison’s comment in response to what Google has said, many critical views have surfaced against these tech giants. Rod Sims, Australian Competition and Consumer Commission chair has said that these companies tend to strike a deal when they are in full power or have full control. And according to him “that’s not a commercial deal.”

Effect on Google

Google says that the search ads contribute to Google’s annual revenue and profit largely at a global level. So, if the company even offers a limited search tool for Australian users without any revision of this new code, it will be risky for the company. Google has called this new law very overly broad and hence it wants revision before the company is in a position to negotiate. The United States government has also asked the Australian government to scrap this new law and bring a more voluntary code instead. Australia proposed this new legislation last month after an investigation on the media market.

The government realized that companies like Google and Facebook have too much power in the media industry which might turn into a big threat in a democratic country. It is also noted that the statement from Google to limit its search engine for the Australian users came only hours after it struck a deal with some French news publisher. This content-payment deal is a three-year, $1.3 billion agreement to support publishers. (Reuters)

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Facebook Takes the Battle to the Government by Planning to Block Australian Publishers from Sharing Articles

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Facebook in a new statement has announced that it will block publishers and users from Australia from sharing news pieces and articles. However, this move will serve as a significant pushback against a newly proposed law that will force Facebook to pay media companies for their articles and content. Furthermore, this new announcement will also escalate tensions between the tech giant and the Australian government. Both parties have been caught in a bitter antitrust battle, with the government holding Google and Facebook responsible for paying publishers for the content they provide these platforms. Here’s a look at how the battle came to heads and what this move could mean to users and publishers.

New Law In-Play

The Australian government is yet to approve and ass the new legislation. However, an arbitration panel tasked with working out the by-laws and clauses has proposed that tech companies must pay their content publishers if the two sides cannot agree. Facebook hit back through a blog post yesterday, claiming that such a proposal was hugely unfair. The social media giant also stated that such a law would allow content creators and publishers to charge any amount they wanted. Furthermore, the company said that if the law did come through, it would be forced to prevent Australians from sharing any media on Facebook and Instagram. 

Facebook Takes A Stand

Facebook’s VP of Global News, Campbell Brown, said that this decision was hard to take for the company. However, he reiterated that it was the only way to protect Facebook against a move that would hurt them and Australia’s media outlets. She went ahead to state that the social media giant was still working on a full-proof method to block Australian media from sharing articles. Following this announcement, Josh Frydenberg, who serves as Australia’s Treasurer, said that these were nothing but heavy-handed threats.

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Instead, he stated that such a law would help make the media landscape more sustainable as digital platforms would have to pay for the content they put out. Rod Sims, who serves as Australia’s competition regulator, also said that such threats were misconceived and ill-timed. He went on to say that the newly proposed law would go a long way in ensuring that the media remains fair and transparent.

Google Follows Suit

Since the Australian legislation will also affect the Alphabet’s Google, the tech giant has also been vocal about its displeasure regarding such a law. They too raised alarms and said that such a measure would force them to put out much less efficient versions of Google Search and YouTube. As a result, such a move, Google Australia and New Zealand MD, Mel Silva, said would critically damage the use of free internet services, like Google in Australia. 

Fighting for Transparency

The Aussie government claims it is only trying to make things more fair and transparent for its media bodies. Furthermore, it states that such a law would help level the playing field and give local media a chance against large tech companies. For instance, the local media is struggling as a result of the free sharing of news by such tech giants with News Corp, a media agency owned by Rupert Murdoch planning to cut jobs in Australia.

Murdoch’s decision will result in the closing down of over 100 regional and local newspapers in Australia, putting these media persons at risk. Murdoch has long asked Facebook and Google to pay for the articles, news pieces and content that appear on their platforms. Hence, it was obvious that New Corp would laud the government’s efforts to make this a reality. Michael Miller, who serves as the executive chairman of News Corp, stated that such a move would put an end to the tech giant’s free-riding on the content created by others. Since such companies derive a lot of benefit from such content, it is only fair that they pay the people making such content out of their own pockets.

Impact and After-Effect

However, if Facebook does follow through with its plans as per the announcement, publishers would no longer have access to a broad audience. Facebook claims that in just the first five months of this year, it sent over 2.3 billion clicks to news websites based in Australia from its News Feed. As a result, blocking such news from their feed could result in a massive loss of audience for news channels, while also limiting the appeal the platform enjoys in Australia. Australia’s new rules come as a part of a global push to make tech giants more accountable and regulated.

France came out with a statement asking Google to pay media companies for the articles it shares in April. Two months later, Google said it would start paying for certain news services in Brazil and Germany. Facebook came out with its separate News Feed last October and pays certain publishers for stories. The tech giant is also in plans to extend this News tab on a global basis but will block the sharing of news if governments try to intervene in its efforts. It will be interesting to see whether the social media giant is capable of halting this global push for more regulation and whether that would be a wise choice for the consumers.