News Media Bargaining Code “Remains Unworkable” Says Google

Portrait of Google Australia MD Melanie Silva, photographed at the Sydney Google Offices. Tuesday 29th January 2019. Photograph by James Brickwood. SMH NEWS 190129
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Google Australia has finally responded to the News Media Bargaining Code legislation, which was introduced to parliament earlier this month.

The tech giant had previously labelled the draft version of the code as “unworkable”, with key concerns including the size of the fines on offer for a breach, data sharing obligations with media companies and the “one-sided” arbitration process that has been proposed.

And while the final version of the code has called for the “two-way value exchange” between tech giants and media companies to be taken into consideration by the arbitrator, Google maintains that the code as it stands is unworkable.

“Unfortunately, while the Government has made some changes, the legislation still falls far short of a workable Code,” said Google Australia & New Zealand VP Mel Silva [feature image].

Silva argued that as it stands now, the code will undermine the open internet.

“No website and no search engine pays to connect people to other websites, yet the Code would force Google to include and pay for links to news websites in the search results you see,” Silva said.

“This sets the groundwork to unravel the key principles of the open internet people use every day—something neither a search engine nor anyone who enjoys the benefits of the free and open web should accept.”

Silva also took aim at the “baseball arbitration” (where if two sides can’t reach an agreement, each puts forward a single final offer and the arbitrator picks one) process that is proposed under the legislation.

“[The code] imposes an unfair and unprecedented baseball arbitration model that considers only publishers’ costs, not Google’s; incentivises publishers to make ambit claims and resort to arbitration rather than good-faith negotiations; assumes that the internet has never required payments for links because of ‘bargaining imbalance’; and requires the decision-maker to choose a single ‘final offer’,” Silva said.

The solution?

Google has previously said it is willing to work with the government to come to an agreement on a code that regulates the relationship between tech giants and media companies.

Silva again maintained that Google will agree to a code, provided certain changes are made.

Instead of the baseball arbitration model, Silva instead argued for a standard model that would factor in comparable transactions.

This arbitration would only apply for deals on the Google News Showcase, which was recently announced as a new initiative in which Google will start to (voluntarily) pay publishers for news content.

“And while the Code professes to recognise the value Google Search provides to publishers, in fact it encourages publishers to argue that arbitrators should disregard that value,” said Silva.

“It does this by allowing the arbitrator to consider a hypothetical scenario in which there is no Google Search and yet publishers receive the same amount of traffic, just from other sources. This scenario… invites unfair outcomes based on speculation rather than evidence.”

Silva also proposed a change to the algorithm notification provisions, which would currently require Google and Facebook to provide media businesses with 14 days notice of any algorithmic changes.

” We make thousands of algorithm updates every year, so providing 14 days’ notice of any significant changes to algorithms or “internal practices” in the way the Code prescribes just isn’t workable. This provision also continues to put every other business that relies on Google Search at a disadvantage, all to benefit one group of businesses—news publishers,” said Silva.

The legislation is set to go to a Senate committee for inquiry in 2021.

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