Google warns users in Australia free services are at risk if it’s forced to share ad revenue with ‘big media’

Google has fired a lobbying pot-shot at a looming change to the law in Australia that will force it to share ad revenue with local media businesses whose content its platforms monetize — seeking to mobilize its users against “big media.”

Last month Australia’s Competition and Consumer Commission (ACCC) published a draft of a mandatory code that seeks to address what it described as “acute bargaining power imbalances” between local news media and tech giants (Facebook and Google) by engaging in good faith negotiations and via a binding “final offer” arbitration process.

Back in April the country’s government announced it would adopt a mandatory code requiring the two tech giants to share ad revenue with media business after an attempt to negotiate a voluntary arrangement with the companies failed to make progress.

In an open letter addressing users in Australia, which is attributed to Mel Silva, MD for Google Australia, the tech giant warns that their experience of its products will suffer and their data could be at risk as a consequence of the regulation. It also suggests it may no longer be able to offer free services in the country.

The letter is being pushed at users of Google search in the country via a pop-up that warns “the way Aussies use Google is at risk,” according to The Guardian.

“This law wouldn’t just impact the way Google and YouTube work with news media businesses — it would impact all of our Australian users, so we wanted to let you know,” Google writes, adding that it’s “going to do everything we possibly can to get this proposal changed.”

In the blog post, it deploys three scare tactics to try to recruit users to lobby the government on its behalf — claiming the regulation will result in:

  1. a “dramatically worse Google Search and YouTube”: Google says the content users see will be less relevant and “helpful” as it will be forced to give news businesses information that will help them “artificially” inflate their ranking “over everyone else”
  2. risks to users’ search data because Google will have to tell news media businesses “how they can gain access” to data about their use of its products. “There’s no way of knowing if any data handed over would be protected, or how it might be used by news media businesses,” adds the data-mining tech giant
  3. overarching risks to free Google services; Giving “big media companies” special treatment will encourage them to make “enormous and unreasonable demands that would put our free services at risk,” is the claim

Google’s open letter instructs users to expect to hear more from it in the coming days — without offering further detail — so it remains to be seen what additional scare tactics the company cooks up.

Consultation on the draft code closes on August 28, with the ACCC saying last month that it intends for it to be finalized “shortly,” so Google’s window to lobby for changes is fast closing.

It’s not the first tech giant to try to repurpose the reach and scale of its platform to mobilize its own users to drum up helpful opposition to government action that threatens its corporate interests.

Over the last half decade or so, similar tactics have been deployed by a variety of gig economy platforms, including Airbnb, Lyft and Uber, to try to politicize and overturn regulations which present a barrier to their continued growth.

Such efforts have, it must be said, only had very fleeting successes versus the scale of the platforms’ regulatory “reform” ambitions. (Gig giants Uber and Lyft are facing a huge fight in their own backyard on key issues like worker reclassification, for example, so in fact regulators and courts have successfully pushed back against BS.)

But it’s interesting to see the tactic moving onto the front page of Google — perhaps signaling the scale of alarm the company feels over the prospect of being forced to share ad revenue with publishers whose content it monetizes, creating a model that other countries and regions might seek to follow.

In a statement responding to Google’s open letter, the ACCC went on the attack — accusing the tech giant of publishing “misinformation” about the draft code.

“Google will not be required to share any additional user data with Australian news businesses unless it chooses to do so,” the regulator writes, further asserting that any move to charge for free Google services like YouTube and search would be the company’s own decision.

“The draft code will allow Australian news businesses to negotiate for fair payment for their journalists’ work that is included on Google services. This will address a significant bargaining power imbalance between Australian news media businesses and Google and Facebook,” it goes on, adding: “A healthy news media sector is essential to a well-functioning democracy.”

Google’s parent entity, Alphabet, reported full-year revenue of $161.8 billion in 2019 — up from $136.8 billion in 2018.