Google signs striking deals with Australian media giants

Google was in a highly publicized dispute with the Australian government in recent months, because of a bill – the News Media Trading Code – that would force Google to pay news publishers for stories that appear in Google searches. The conflict almost turned into a confrontation, with Google at one point threatening to withdraw search from Australia entirely if forced to pay for news links and snippets that Google Search provides.

Now, after a Senate committee recommended last week that the bill be passed in parliament and become law, Google appears to be taking a more conciliatory approach. On Tuesday, she signed a deal worth AU $ 30 million ($ 23 million) a year with Nine Entertainment, a media giant and one of the biggest lobbyists in the Media Code. The deal was reported by the Sydney Morning Herald, one of the many news properties owned by Nine.

That comes days after a similar deal with Seven West – another Australian media giant that, like Nine, owns properties on TV, radio and print media – signed an agreement with Google, which is also worth about $ 30 million. .

This is big news for Australia’s big publishers, who are about to close lucrative deals with Google and Facebook. But it is undoubtedly bigger news for Google, which could be forced to sign similar licensing agreements with media companies around the world. A member of the European Parliament told CNET last week he hopes to integrate measures similar to Australia’s Media Code into future legislation, and a Canadian minister cited the example of Australia as a reason to pressure Google and Facebook to pay publishers in their country.

“If Australia succeeds in passing the law and shows that it works, it could set a precedent for others,” said Daniel Gervais, a law professor at Vanderbilt University, “for Canada, New Zealand and perhaps others.”

Showcase showtime

If it became law, the News Media Trading Code would give Google and Facebook 90 days to reach licensing agreements with qualified Australian publishers for the news content that appears in Google search and the Facebook feed. If no deal is made, government appointed arbitrators would make a binding decision on how much and how the technology titans paid. Google feared that this could result in paying Google’s search links, which it argued would abandon the principles of an open Internet.

Business with Australian media companies is being done through Google News Showcase, a global initiative to which Google has committed $ 1 billion to news publishers. Media that subscribe to the News Showcase are paid to provide a selected list of stories to be displayed on Google News applications. In addition to Australia, the News Showcase is live in the UK, Brazil, France and Germany.

When the News Showcase was launched in Australia in early February, the seven publications that originally signed up received between AU $ 200,000 and AU $ 2 million (US $ 150,000 to US $ 1.5 million) from Google. When Google previously invited Nine to join the News Showcase, Nine hesitated. “This is what monopolies do, they make an offer, in the form of Google Showcase, but they do not offer to negotiate,” said a Nine spokesman in early February.

So, what has changed? Sundar Pichai, CEO of Alphabet, Google’s parent company, is said to have had “constructive” conversations with Australian Prime Minister Scott Morrison. But with the News Code looking more likely than ever to become law, the prospect of paying news agencies for Google’s search links appears to have been a very expensive risk for the tech giant.

“Google is desperate not to pay for news delivered through its search engine,” said James Meese, senior professor of media studies at RMIT University in Melbourne. “It appears that they are paying above market value to secure businesses that specifically exclude Google Search.”

Fair for all

Although the Media Code is said to support public interest journalism, there are concerns that it will disproportionately benefit media giants like News Corp., making it harder for smaller publishers to compete. The aim of the Media Code is to balance the gap in bargaining power between publishers and major technologies, but some fear that it will not resolve the gap in bargaining power between large and small publishers.

“These promotions [with Nine and Seven] show that large media companies clearly have more bargaining power, “said Meese.” It is important to look at how the code develops to ensure that smaller companies can get a fair deal. “

This is an issue that will haunt governments around the world if they decide to follow Australia’s precedent. It has already surfaced in France, reports ABC, as many independent vehicles were left out of a $ 76 million deal between Google and APIG, a group representing 121 French publishers.