As Australian regulators are looking to force Google, Facebook and other digital platforms to pay local media outlets for using their content, the tech giant has fired back. Google warned Australians that if it was forced to pay up, free Google and YouTube search could soon be a thing of the past and would be forced to share user data with media companies.

The warning came after Josh Frydenberg, Treasurer of Australia, instructed the Australian Competition and Consumer Commission (ACCC) to draft legislation that would force Google and Facebook to pay for news obtained from local commercial media houses.

It would allow the media companies to negotiate with the digital giants on how to pay news media for their content. The proposed legislation would also require Google and Facebook to inform in advance of any algorithm change that could affect content ranking and favor the original news source in search page results.

Google
Google and Facebook will be forced to share advertising revenue with Australian media companies Pixabay

Mandatory Code

The ACCC was supposed to finalize the code by November 2020 but it didn't have success in negotiations with Google and Facebook. Now that the negotiating period is over and the news outlets have seen a sharp decline in advertising revenue, the ACCC has been asked to write a mandatory code forcing digital platforms to pay up.

Frydenberg believes it will "help create a level playing field" as it is only fair for media companies to get paid for their content. Paul Fletcher, Australia's Minister of Communication, said that the code was about creating a strong and sustainable media ecosystem.

During the Coronavirus pandemic, many small Australian news outlets have shut down after ad revenues declined while big media outlets have either forced employees to take a pay cut or let go.

"Digital platforms have fundamentally changed the way that media content is produced, distributed and consumed," Fletcher said in April 2020. "Digital platforms need to do more to improve the transparency of their operations for news media providers as they have a significant impact on the capacity of news media organizations to build and maintain an audience and derive resources from the media content they produce."

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Last month, a draft of the 'News Media Bargaining Code' was published that would change after consulting with involved parties. But Google Australia and New Zealand's Managing Director, Mel Silva has written an "Open Letter to Australians" warning of the consequences.

"A proposed law, the News Media Bargaining Code, would force us to provide you with a dramatically worse Google Search and YouTube, could lead to your data being handed over to big news businesses, and would put the free services you use at risk in Australia," she said.

Google Misinformed, Says ACCC

However, the ACCC, which drafted the law, too has fired back, saying Google's letter "contains misinformation." Sims in a statement released on Monday, August 17 said Google would not be required to share user data and nor charge Australians for free search services.

"Google will not be required to charge Australians for the use of its free services such as Google Search and YouTube unless it chooses to do so," Sims said in the statement. "Google will not be required to share any additional user data with Australian news businesses unless it chooses to do so."

News Media Bargaining Code
The proposed News Media Bargaining Code will force digital giants to share ad revenue with new media outlets in Australia accc.gov.au

Swinburne University's Belinda Barnet, a senior lecturer on media termed Google's letter as a "cynical exercise to scare Google users." She told Associated Press, "I see no merit in any of the arguments."

She added that it was ironic on Google's part to argue that user data will be handed over to news organizations. "One of the most ironic arguments is that they're going to have to hand over some data to news organizations — for example, which article people have read and how long they may have read it for — and this coming from the world's major privacy violator and certainly the world's largest data aggregator is a bit rich," Barnet said.

Google hasn't been having a good time in the land down under. The U.S. based company has been at loggerheads with the ACCC over data privacy. Last month, the Australian regulator sued Google for misleading consumers to get consent and personal information for collecting internet browsing data for targeted advertising. But Google denied the allegation.