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Google may have struck a deal with News Corp to pacify Australian lawmakers, but some publishing industry members say the agreement to compensate the publishing giant obfuscates the power that platforms like Google and Facebook hold over smaller publishers, which Australia’s proposed media bargaining law is meant to address.

Google’s three-year deal with News Corp gives its brands including The Wall Street Journal and the New York Post a home in Google’s News Showcase in exchange for what News Corp called “significant payments by Google.”

The agreement comes amid antitrust investigations into Google in the U.S. and U.K. and a looming law in Australia that both Google and Facebook worry could inspire similar government intervention elsewhere to level the playing field for publishers.

One executive from a mid-size publisher told Digiday that News Showcase is just another instance of Google building “features and interfaces that actually have people not leaving their platform, where all of our stuff is just consumed there.” The executive added that they feared Google or Facebook may suppress their publication’s search rankings or withhold ad deals as retaliation for publicly criticizing the companies.

“Google and Facebook have such power that I’m afraid of repercussions, so we play nice with them,” said the publishing executive.

A bargaining chip or hush money?

Whether the News Corp deal involves the firm’s U.S. business or whether the showcase will be promoted to the U.S. audience remains unclear. Google told Digiday it is only now in the early stages of discussing News Showcase with U.S. publishers.

“Currently, the News Showcase product is live in Brazil, Australia, the U.K., Germany and Argentina. We have over 500 publications signed up to News Showcase and look forward to signing up many more in the future, including in the U.S. and other countries,” said a Google spokesperson.

Google’s News Showcase is one way the firm has responded to pressure from publishers and lawmakers who argue its search engine and other tools exploit content producers by presenting so much of their content in Google’s environment that people have no reason to click through to publisher sites.

In October, the company promised to dedicate $1 billion to publishers over three years. Digiday reported at the time that Google would terminate agreements with any publishers participating in any legal claim against Google.

Jason Kint, CEO of publisher trade group Digital Content Next, said he’s not holding his breath for Google to rush out its News Showcase product in the U.S. “They appear to be starting to spend money on licensing news content in a very strategic way by creating a new vehicle for it,” he said, noting that the company is only rolling out the product “in the countries where [they] see the biggest threat right now.”

Platforms threaten to pull out of Australia

Australia’s impending News Media Bargaining Code would give news publishers leverage to negotiate individually or collectively for compensation from Google or Facebook when they feature their content on their platforms. It would also create standards requiring tech firms to give publishers notice before making algorithm adjustments that can wreak havoc on their search and social media strategies.

Google has fought the legislation, threatening to pull its search service out of the Australian market. “Our concerns about the code in Australia are about being asked to pay for all links and snippets,” wrote Kate Beddoe, Google head of news, web and publishing product partnerships for the Asia-Pacific region in a company blog post published on Feb. 10.

In addition to Google’s deal with News Corp, the company also this week announced Australian partnerships with Seven West Media and Junkee media. It remains to be seen whether the publisher deals satisfy the Australian government enough to alter the proposed code or to opt not to pass it into law altogether.

Google declined to comment regarding whether the recent deals with News Corp and the other publishers are signs that it will back down on its threat to pull out of Australia’s search market.

Facebook has also opposed the Australia legislation. On Feb. 17, the social network announced that it would stop distributing Australian news publishers’ content to anyone who uses its platform and prevent people in Australia from accessing any news publishers’ content. 

While Facebook has been compensating publishers for news content through its Facebook News program, the move to block news content in Australia fits the company’s broader plan to deemphasize political content in people’s news feeds.

A U.S. media bargaining code

Members of Digital Content Next generally support the proposed Australia code, according to Kint. “It’s one approach to addressing the very competitive imbalance,” he said.

There has been an effort here in the U.S. for Congress to pass a law resembling Australia’s proposed code. A bill introduced in the last Congress aimed to give smaller publishers better leverage in negotiations with Google and Facebook. The Journalism Competition and Preservation Act was backed by several news publishing groups including the American Society of News Editors and the National Newspaper Association as well as press associations throughout country when it was first introduced in 2019.

The bill, which would need to be re-introduced by the current Congress, would provide a four-year safe harbor period during which newspaper companies can negotiate compensation terms as a collective with the big digital platforms. The legislation is intended to ensure that negotiations benefit all publishers rather than just a few with large market share.

News Media Alliance, a news publisher trade group that includes The New York Times, The Washington Post and The Wall Street Journal among its members, supports the legislation. David Chavern, president and CEO of the group, said he expects it to be re-introduced in this Congress.

“What people miss is the big national publishers already have some leverage today, so the question is how do you get leverage to small publishers, and I don’t understand how you would do that outside some kind of bargaining code that ensures they’d be included,” said Chavern.

The post ‘I’m afraid of repercussions’: Publishing industry members question Google’s motives in paying off News Corp appeared first on Digiday.