Google has scuttled its curated News Showcase feature in Australia, after a dispute over the country’s proposed News Media Bargaining Code. Announcing the decision, Mel Silva, Google’s head in Australia, said draft code is “unworkable”.
News Showcase is a curated news product currently offered in Germany and Brazil, with expansion plans to more countries. Google had presented the News Showcase as a feature that would give publishers (which have partnered with Google) more control over which stories they wish to show to readers, and how to present them. Stories will appear initially in the form of story panels on the Google News app on Android, and later on iOS.
The tech giant claimed that it had signed agreements with several Australian publishers earlier this year for the feature, before the draft code was announced. However, Google is holding off on News Showcase for now, essentially claiming that the revenue sharing agreement that will be mandated under the code makes the News Showcase feature unviable. The company has signaled that it will not launch until the draft code is amended to a considerable degree. Google had announced earlier this month that it had already partnered with around 200 publishers in Germany, Brazil, Argentina, Canada, the UK and Argentina.
What is the media bargaining code? The Australian Competition and Consumer Commission (ACCC) had released the draft News Media Bargaining Code in July 2020. The code is supposed to help news publishers in the country the ability to strike a deal with Google and Facebook when it comes to publishing news content. News publishers argue that Google and Facebook platforms are causing a drop in ad and classified revenues for them. Essentially, the publishers essentially want a larger slice of the pie, which will ostensibly help the struggling media industry.
Both Facebook and Google have expressed opposition to the draft code. Google issued an open letter, telling Australian citizens that their Search data may be at risk, and that it would hurt Google’s free services due to being forced to pay publishers. Facebook, meanwhile, threatened to block all news sharing on its platforms in Australia. Both companies also underplayed the importance of news content to their businesses.
News Showcase plans put on ‘pause’
Google in its Sunday blog spelled out a number of problems with the News Media Bargaining Code, which directly influenced its decision on the News Showcase feature:
- ‘Unreasonable system’: Google argued that the draft code’s “must include, must pay” system in favour of publishers is extreme and unprecedented. It said that Google was essentially being forced not just provide benefits to Australian news businesses, but also pay them to receive that benefit. The company said that “must include” regimes are “rare”. “And when this type of system is used, parties have a right to be included, but not a right to be included for free — let alone be able to demand payment to be included.”
- Publishers benefit more than we do: Google said that under the draft Code, if its makes news content available online, it is forced to negotiate payments to that company. However, it said that in this arrangement, publishers gained a lot more than Google does. It took the example of 2018, when publishers made more than $200 million that year from Google links, as compared to just $10 million revenue that Google made from the same.
“What’s particularly concerning is that it’s not just one unequal negotiation. We would be forced into these one-sided negotiations with all registered news businesses in Australia that earn more than $150,000 per year,” said Google […] The draft code would set a dangerous precedent in Australia, as a similar one-sided, forced-dealing regime could be imposed in other industries, impacting other companies.
- Draft code lacks clarity: Google claimed that the conditions prescribed in the draft code were extremely broad, lacking vital definition. At the same time, failure to comply with it carries potentially enormous fines. “We could be fined up to 10 percent of our Australian revenue for a single breach. No business in Australia should have to manage the huge risk that comes with such severe penalties for such uncertain provisions.”
While calling the draft code in its current form “unworkable”, Google said it would continue to work with the Australian government and the ACCC to get a “fair code”. It said that the company wasn’t opposed to a code of conduct, but it needed certain changes to the current draft:
- Mandate to share information on ranking algorithm will slow things down: Google argued that the current draft code requires the company to share with publishers information on changes to its search and ranking algorithm. This system, it said, would slow down upgrades and improvements to its Search. Instead, it suggested, the code could be amended only to give “reasonably notice” on significant “actionable changes”.
- Won’t share additional user data: Google argued that the current code required them to give publishers data on users who access their content. However, it said, it would be done without any guarantees about the way the provided data can be used. Instead, Google suggested an amendment wherein it would not share additional data over and above what publishers are already supplied.
- Prevent one-sided negotiations: Google argued that the draft code imposes a “one-sided approach” to negotiations in favour of publishers. Instead, it could be amended to take into account the value “both sides bring to the table”, to prevent publishers from getting “special treatment at the expense of other Australians”.