Google inks landmark agreements with Australian media giants

Google has been in a highly publicized spat with the Australian government in recent months over a bill — the News Media Bargaining Code — that would force Google to pay news publishers for stories that surface in Google Search inquiries. The conflict almost turned into a confrontation, with Google at one point threatening to pull search out of Australia entirely if it was forced to pay for news links and snippets that Google Search provides.

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

It comes days after a similar deal with Seven West — another Australian media behemoth which, like Nine, owns properties across TV, radio and print — signed a deal with Google, said to also be worth around $30 million. 

This is big news for Australia’s large publishers, who stand to cut lucrative deals with Google and Facebook. But it’s arguably bigger news for Google, which could be forced to ink similar licensing agreements with media companies around the world. A member of European Parliament told CNET last week he hopes to integrate measures similar to those in Australia’s Media Code into upcoming legislation, and a Canadian minister has cited Australia’s example as reason to push Google and Facebook into paying publishers in his country. 

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

Showcase showtime

If it became law, the News Media Bargaining Code would give Google and Facebook 90 days to reach licensing agreements with qualifying Australian publishers for the news content that appears on Google’s search and Facebook’s feed. If no deal is made, government-appointed arbitrators would hand down a binding decision on how much, and how, the tech titans paid. Google worried this could result in it being made to pay for Google search links, which it argued would forsake the principles of an open internet.

The deals with Australia’s media companies are being done through Google News Showcase, a global initiative with which Google has committed $1 billion to news publishers. Outlets that sign up to News Showcase are paid to provide a curated list of stories to appear in Google News apps. Apart from Australia, News Showcase is live in the UK, Brazil, France and Germany. 

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

So what changed? Sundar Pichai, CEO of Google-parent Alphabet, has reportedly had “constructive” conversations with Australia Prime Minister Scott Morrison. But with the News Code looking more likely than ever to become law, the prospect of paying news outlets for Google search links appears to have been too costly a risk to run for the tech giant. 

“Google is desperate to not pay for news delivered through their search engine,” said James Meese, a senior lecturer of media studies at Melbourne’s RMIT University. “It looks like they are paying over and above market value to secure deals that specifically exclude Google Search.”

Fair for all

Though the Media Code is said to be in the name of supporting public-interest journalism, there are concerns it’ll disproportionately benefit media giants like News Corp., making it harder for smaller publishers to compete. The Media Code’s aim is to balance the gap in bargaining power between publishers and big tech, but some worry it doesn’t address the gulf in bargaining power between large and small publishers

“These deals [with Nine and Seven] show that larger media companies clearly have more bargaining power,” Meese said. “It’s important to watch how the code rolls out to make sure that smaller companies can get a fair deal.”

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