Australia's PM warns Facebook and Google 'I don't respond to threats'

Australia’s PM warns Facebook and Google ‘I don’t respond well to threats’ as tech companies battle against laws forcing them to pay for news content

  • Canberra’s law asks the firms to negotiate fees with news organisations 
  • Google and Facebook have both threatened to change their services as a result
  • Scott Morrison said today: ‘We’ll come to a sensible outcome on this and it won’t need coercion wherever it comes from. It’s not something I respond very well to’

Australia’s Prime Minister has warned Facebook and Google he ‘doesn’t respond well’ to threats after the tech companies lashed out at a new law to make them pay for news content. 

Canberra’s legislation, drafted by the competition regulator, demands that the multi-billion dollar Silicon Valley giants negotiate fees with news companies whose stories appear on their websites. 

In response Google threatened that it would charge Australians for using its search engine and Facebook warned it would block users from sharing news stories.

Speaking on Monday, Prime Minister Scott Morrison said: ‘I’m quite certain we’ll come to a sensible outcome on this and it won’t need coercion wherever it comes from. It’s not something I respond very well to.’

The battle with Big Tech will be watched keenly by governments across the world, not least in London and Washington, which have raised concerns over the ‘advertising duopoly’ operated by Google and Facebook. 

Australian Prime Minister Scott Morrison speaking at a press conference on Monday

Google’s CEO Sundar Pichai (left) and Facebook’s Mark Zuckerberg (right)

In the United Kingdom, 36.7 per cent of all online advertising revenue is earned by Google and 28 per cent by Facebook. The online advertising market was worth £13.5billion in the UK last year.  

Morrison said he had discussed his proposed laws with ‘very senior-level executives’ including Google’s chief executive, Sundar Pichai, last week.  

‘I think people from these companies understand that when I say something, I mean it and that I intend to follow through with it,’ Morrison told reporters.

‘Therefore I would encourage them, very strongly, to work constructively and cooperatively with the process that is underway,’ he said.

Australia’s crackdown is targeting stories that appear in Google searches, Facebook’s news feed and on Instagram without any money going to the news businesses which actually produce them. 

Google’s managing director in Australia Mel Silva last month threatened that the law jeopardised the ‘free services’ its users enjoy

Australia says this is a ‘fundamental bargaining power imbalance’ which means that news websites are unfairly deprived of advertising revenue siphoned off by Google and Facebook.  

Facebook Australia was paid A$674million (£370million) by local advertisers in 2019. 

Regulators say that Facebook and Google not only benefit financially from showing the news stories, but also boost their status as news providers in Australia and collect user data which is used to improve their services. 

Facebook also profits from the ‘like’ and ‘share’ buttons on other websites which allow its servers to track people’s activity and send them tailored ads.  

In addition to payment for content, the measures would also force transparency around the closely guarded algorithms that tech firms use to rank content. 

The code will require Google and Facebook to give publishers 28 days notice of any algorithm changes that are likely to have a significant impact on their traffic.  

Facebook last week said it would ‘stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram’ if the proposal becomes law.   

In a statement, Facebook’s Australia and New Zealand managing director Will Easton said the proposed overhaul ‘misunderstands the dynamics of the internet’.

‘Most perplexing, it would force Facebook to pay news organisations for content that the publishers voluntarily place on our platforms and at a price that ignores the financial value we bring publishers,’ he said.

Anyone using Google last month was confronted with a yellow exclamation mark with a link to an open letter to Australians’ from the company’s managing director in Australia Mel Silva

‘Assuming this draft code becomes law, we will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram. 

‘This is not our first choice – it is our last. But it is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.’

Easton also accused Australian regulators of having ‘ignored important facts’ during a lengthy consultation process that ended on Monday.

The regulator ‘presumes that Facebook benefits most in its relationship with publishers, when in fact the reverse is true,’ he said.

‘News represents a fraction of what people see in their news feed and is not a significant source of revenue for us.’

Easton said Facebook sent 2.3billion clicks to Australian websites in the first five months of 2020 at an estimated value of A$200 million (£110million). 

It had also been preparing to bring Facebook News to Australia, he said – a feature launched in the US last year where the tech giant pays publishers for news.

‘Instead, we are left with a choice of either removing news entirely or accepting a system that lets publishers charge us for as much content as they want at a price with no clear limits,’ he added.

‘Unfortunately, no business can operate that way.’

Lat month, Google greeted its users in Australia with a strongly-worded letter from its managing director in Australia Mel Silva. 

‘We need to let you know about new government regulation that will hurt how Australians use Google Search and YouTube,’ Ms Silva’s letter said.

‘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.’

Facebook and Google have strongly opposed any move forcing them to share advertising revenue

A day after suggesting they could stop offering free searches, Google backtracked and said it would not be charging users. 

‘We did not say that the proposed law would require us to charge Australians for Search and YouTube – we do not intend to charge users for our free services,’ a spokesman in Australia said.

‘What we did say is that Search and YouTube, both of which are free services, are at risk in Australia.’ 

Australia’s Treasurer Josh Frydenberg said the proposed laws would ‘create a more sustainable media landscape and see payment for original content.’

‘Australia makes laws that advance our national interest. We don’t respond to coercion or heavy handed threats wherever they come from,’ Frydenberg said.

Rod Sims, head of the Australian Competition and Consumer Commission (ACCC) said Facebook’s threat was ‘ill-timed and misconceived’. 

The new law would simply ensure that embattled news firms ‘can get a seat at the table for negotiations with Facebook and Google’, Sims said. 

‘Facebook already pays some media for news content,’ he said. ‘The code simply aims to bring fairness and transparency.’  

The legislation, due to be passed into law this year, will initially focus on Facebook and Google but could eventually apply to any digital platform. 

A 2019 study estimated about 3,000 journalism jobs have been lost in Australia in the past 10 years, as traditional media companies bled advertising revenue to Google and Facebook which paid little or nothing for news content.  

The crisis has been exacerbated by the pandemic, with dozens of Australian newspapers closed and hundreds of journalists laid off in recent months. 

‘Mark Zuckerberg is happy to let Facebook be a tool to spread misinformation and fake news, but is apparently fine with Facebook dropping real news altogether,’ John Stanton, co-founder of the Save Journalism Project, said in a statement. 

The Australian Competition and Consumer Commission haccused Google of releasing a letter that ‘contains misinformation’

‘Regulators need to rein in the tech giants’ total domination of the online marketplace before it’s too late.’ 

The draft law, which aims to succeed where other countries have failed in forcing the tech giants to compensate media firms , was unveiled in July. 

Unlike other countries’ efforts to make Facebook and Google pay under copyright regulations, the Australian initiative uses competition law to tackle what it calls an ‘acute bargaining power imbalance’.   

News Corp Australia, one of the country’s largest media conglomerates, declined to comment on Facebook’s statement. 

The firm’s executive chairman Michael Miller previously called the law a ‘watershed moment’ and declared that the ‘platforms’ days of free-riding are ending’.  

The TRUTH about how new laws will affect Google’s users versus the tech giant’s claims in its open letter

‘We need to let you know about new Government regulation that will hurt how Australians use Google Search and YouTube’

Not true. The new law will make no difference at all to how Australians use Google Search and YouTube. You will be able to search both in exactly the same way you do at present. The only change will be that Google will have to pay for Australian news content which at the moment they use for free. As Google’s Australian revenue in 2019 was $4.8 billion it should not find this difficult.

‘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.’

Not true. The Code will not force Google to provide a worse service, on the contrary it contains provisions to prevent it removing Australian news websites and replacing them with foreign ones. It will not lead to your data being handed over to news businesses, big or small. This is the ACCC’s response Google’s claim: ‘Google will not be required to share any additional user data with Australian news businesses unless it chooses to do so’. Nor will the Code put free services at risk. The ACCC says: ‘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.’

‘The way Aussies search every day on Google is at risk from new regulation. You’ve always relied on Google Search and YouTube to show you what’s most relevant and helpful to you. We could no longer guarantee that under this law. The law would force us to give an unfair advantage to one group of businesses – news media businesses – over everyone else who has a website, YouTube channel or small business … We’ve always treated all website owners fairly when it comes to information we share about ranking.’

Blatantly untrue. Google’s search algorithms are a secret ‘black box’, and rankings are regularly changed without warning or explanation, sometimes with catastrophic effects for businesses.

To give just one example: June 2019 Google made an algorithm change which reduced the Daily Mail’s search visibility by 50pc worldwide – meaning dramatic reductions in the number of Daily Mail stories appearing in your search requests. There was no warning or explanation – nor did Google inform you, the user. Three months later our search visibility was suddenly restored, again without warning or explanation. Many other websites have had similar experiences.

The Code simply provides that Google will have to give warning and explanation of changes that could impact traffic to a news website – and tell it how it can minimise any damage. If Google thinks that is unfair, fine – they can provide the same information to every website. Now, that would be fair.

‘Your Search data may be at risk. You trust us with your data and our job is to keep it safe. Under this law, Google has to tell news media businesses ‘how they can gain access’ to data about your use of our products.’

Not True. As the ACCC says, Google will not have to share any more user data than it does already. The ACCC’s explanatory notes make clear it is lists of types of data Google must provide to news media businesses, not the data of individual users. In any case, why should users trust Google more than any other business? Only last month the ACCC launched Federal Court action over the alleged misuse of users’ personal data by Google, and Google has previously been fined millions of dollars in Europe for misusing users’ data.

‘Hurting the free services you use.’

Not true. Google’s services aren’t free – you pay for them with your data, which Google collects in order to sell advertising targeted at you. Google doesn’t pay news media businesses millions of dollars. It currently pays nothing at all for the news it uses – and only began offering to pay when it realised the ACCC was going to call its bluff by introducing legislation.

It has also bought control of digital advertising by taking over smaller businesses to create a virtual monopoly, where it acts as both buyer and seller in digital advertising markets it controls, and for which it makes the rules. It forces news media businesses and advertisers to use its services and charges both millions of dollars, some it in hidden fees. The result is consumers pay more for the goods they buy. These anti-competitive practises are under investigation by the ACCC here in Australia and by regulators in other countries.

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.

Not true. The only impact this law will have on Australian users is that intended by the ACCC – that instead of Australian journalism dying through being starved of revenue by monopolistic internet giants, it will have a sustainable future, for the benefit of all Australians. Oh, and Google – global annual revenue in 2019 $161 billion dollars – might make just a little less profit

You’ll hear more from us in the coming days – stay tuned.

True, regrettably. Google has won immunity from libel laws all over the world by claiming it has no opinions. Well, it does when its bottom line is under threat. It runs one of the world’s largest lobbying operations and have no doubt, Australian legislators will be bombarded with misinformation as Google tries to overturn the ACCC’s proposals. Watch out! 

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