Select Page

As Australia gets ready to introduce a mandatory code of conduct for tech platforms Facebook and Google, the latter has threatened to remove its search engine from Australia.

Originally due to be finalised by November 2020, the code, introduced by competition watchdog Australian Competition and Consumer Commission (ACCC), was to require the digital ad giants to negotiate in good faith on how to pay news media for use of their content, to advise news media in advance of algorithm changes that would affect content rankings, to favour original source news content in search page results and to share data with media companies. 

In response, Google has already blocked Australian news sites from its search results for about 1% of local users, explaining it was an experiment to test the value of Australian news services.

Luke Taylor, who is the founder and chief operating officer of ad fraud prevention company TrafficGuard, previously pointed out to The Drum that without the code and without intervention from the government, it is unlikely Google and Facebook would voluntarily agree to fairly pay for the content.

Australian prime minister Scott Morrison and lawmakers said the country would not yield to Google’s threats and accused the tech giant of blackmailing them.

"Let me be clear: Australia makes our rules for things you can do in Australia. That's done in our parliament," Morrison said. “And people who want to work with that, you're very welcome. But we don't respond to threats."

Google Australia managing director Mel Silva told the Australian Senate that the laws were "unworkable". 

"The laws set an untenable precedent for our businesses and the digital economy" if the company had to pay for link and search results. This was not compatible with the free-flowing share of information online or how the Internet works”, she said

"We do not see a way, with the financial and operational risks, that we could continue to offer a service in Australia.”

What have been the responses to this?

  • The United States, in a submission to the Australian Senate, said that the proposed legislation is unreasonable, impractical, “fundamentally imbalanced” and could run counter to the US-Australia free trade agreement and “may result in harmful outcomes”.
  • It called on the Australian government to shelve the proposal, arguing that directly intervening in the market to distribute advertising revenue was “extraordinary” and “a significant step that needs to be carefully thought through and justified”.
  • “In the view of the United States, it would be preferable to pursue additional market study and consultation to identify a specific market failure that might be addressed first though a voluntary code, and if demonstrably ineffective, through Australia’s regulatory rule-making process where stakeholders can participate by weighing in on options and providing evidence in support of or opposition to specific proposals,” the submission states. “We respectfully request that Australia reconsider whether legislation is needed.”
  • Sir Martin Sorrell, the founder of S4 Capital said while he agrees a code in some form, he says the current framework will not make the local news media sector more sustainable.
  • “The proposed provisions fundamentally change how the open internet is used, resulting in negative impacts that will ripple across the digital ecosystem (including but not limited to the businesses and employees of those digital platforms included in the inquiry),” Sorrell said.
  • “Most importantly, based on shifts in how digital platforms operate in Australia as a result of the code’s provisions, Australia’s small and medium business community will experience a negative knock-on impacts; perpetuating imbalances with other sectors in the economy and digital platforms. A community already struggling due to the 2020 bushfire Season and Covid-19.”
  • “Above all, the suggested benefits of the proposed code provide a short term solution for a narrow benefiting audience while providing a global precedent with far wider-reaching implications for private enterprise, digital platforms and the Internet.”