Update to our open letter to Australians

We are not against a law that governs the relationships between news businesses and digital platforms. But the current draft Code is unworkable. Our concerns include:

1. An obligation to share details about our algorithm changes that would provide an unfair advantage to large news businesses and help them feature more prominently in organic search results at the expense of other businesses, creators and website owners.

2. An obligation to tell news media businesses what user data Google collects, what data it supplies to them, and how they “can gain access to the data” which Google does not supply to them, with a lack of detail on safeguards for demands from news businesses for access to sensitive data.

3. An unfair arbitration process that ignores the real-world value Google provides to news publishers and opens us up to enormous and unreasonable demands.

We have been engaged with the Government, the ACCC and news businesses in good faith since a publisher code was first brought up last year. You can read more about the key issues we raised in our submission to the ACCC concept paper and blog posts here and here.

Initially this new law was going to be a voluntary code of conduct, and we were making good progress on discussions with news publishers. But in April the Government shifted the goal posts and moved to a proposed mandatory Code. On July 31, the ACCC released an exposure draft of the proposed law. We have continued to raise our concerns and make submissions, but unfortunately these have not been reflected in this proposed law. In addition, we thought it’s important to let you know directly about the draft Code and potential harm this would cause to the services you love and rely on - including Search and YouTube. We’ve since heard from thousands of Australians who share our concerns.

We share general tips on ranking with all website owners already, but this new law would require us to give special notice and explanations to news businesses. This would dramatically worsen how you experience Google Search and YouTube:

1. If we are required to give one group special advice about how to get a higher ranking, they’d be able to game the system at the expense of other website owners, businesses and creators, even if that doesn’t provide the best result to you. If we want to keep our algorithms fair for everyone, we would have to stop making any changes in Australia. This would leave Australians with a dramatically worse Search and YouTube experience.

2. Additionally, 28-day advance notice is really a 28-day waiting period before we can make important changes to our systems. That’s 28 days before we can roll out defences against new kinds of spam or fraud. 28 days of extra delay before we can launch new features that are already available to the rest of the world. And 28 days before we can fix things that break. To illustrate: in order to give you the most relevant results when you use Search, last year, we launched 3,620 algorithm updates.

Put simply, it's extremely one-sided and unfair––so unfair that no company should be asked to accept it. Just before this law was proposed we had reached agreements with several Australian news organisations to pay them to license their content.

We're happy to pay more to license content, and want to support journalism as it transitions to a digital future, but a fair negotiation or arbitration should factor in the value both parties provide.

Under this law the arbitrator is not required to take into account the value we provide news businesses (s52ZP(2)). Google Search referred more than 3 billion visits to news businesses’ websites last year, which is estimated to be worth around $218 million—and this doesn’t include the many other ways we support publishers. The arbitrator is also not required to look at the significant costs we incur in providing our services, or the value of comparable deals, which would be the starting point for any standard arbitration.

All it looks at is the news organisation’s costs, its content’s value to Google, and whether the payment would put an undue burden on the digital platform. That means bigger news organisations with higher costs and more content will get paid more. Because of all this, the law is set up to encourage enormous and unreasonable demands.

The proposed law is not limited to Google News, or the news results tab. It covers “every digital platform service” of Google and Facebook that makes available news content of registered news businesses (s52B, s52L). This means it directly impacts Google Search itself.

The Code requires us to tell a registered news business how it can “gain access to” data (s52M(2)(e)). This is data that we do not supply to them at the moment. As a reminder, you currently have control over your personal data thanks to easy-to-access tools in your Google Account. If we are required to hand that data over to news organisations, there’s no way to know what controls they will give you, nor how your data will be protected—or how it might be used by news businesses.

No. We never said that the proposed law would require us to charge Australians for Search and YouTube. What we did say is that Search and YouTube, which are free services, are at risk in Australia.

First, the very nature of our search engine and YouTube is to surface the best information. If one group is given special information and notice, and can game the rankings at the expense of others, we can’t provide the best service. Having to disclose information about ranking would harm our services in Australia and around the world.

Second, the proposed law contains provisions that are difficult to comply with while providing a useful service, and if we can’t, the law imposes ruinous fines and liability - up to 10 percent of our turnover for each breach of the law.

Third, the arbitration is set up to encourage news businesses to make unreasonable and exorbitant financial demands. News queries account for just over 1% of our total search queries in Australia. We have news partners in other countries, as well as countless other categories of websites and content that people search for. It simply isn’t viable for us, or any digital platform, to pay unreasonable and exorbitant amounts to one group in one country.

Yes. The Code covers “every digital platform service” Google and Facebook provide that make available news content of registered news businesses (s52B, s52L). Australian media companies upload content to YouTube, which means YouTube will be impacted by the Code. The ACCC Chairman has also said so.

The Code requires us to tell a registered news business how it can “gain access to” data (s52M(2)(e)). This is data that we do not supply to them at the moment. As a reminder, you currently have control over your personal data thanks to easy-to-access tools in your Google Account. If we are required to hand that data over to news organisations, there’s no way to know what controls they will give you, nor how your data will be protected—or how it might be used by news businesses.

No. We never said that the proposed law would require us to charge Australians for Search and YouTube. What we did say is that Search and YouTube, which are free services, are at risk in Australia.

First, the very nature of our search engine and YouTube is to surface the best information. If one group is given special information and notice, and can game the rankings at the expense of others, we can’t provide the best service. Having to disclose information about ranking would harm our services in Australia and around the world.

Second, the proposed law contains provisions that are difficult to comply with while providing a useful service, and if we can’t, the law imposes ruinous fines and liability - up to 10 percent of our turnover for each breach of the law.

Third, the arbitration is set up to encourage news businesses to make unreasonable and exorbitant financial demands. News queries account for just over 1% of our total search queries in Australia. We have news partners in other countries, as well as countless other categories of websites and content that people search for. It simply isn’t viable for us, or any digital platform, to pay unreasonable and exorbitant amounts to one group in one country.

Google doesn’t “use” news content—we link you to it, just like we link you to every other page on the web—think Wikipedia entries, personal blogs or business websites. We sort through hundreds of billions of webpages to find the most relevant, useful results in a fraction of a second, and present them in a way that helps you find what you’re looking for—and then we take you to the source of that information.

Some large publishers have inaccurately accused us of “stealing” news content, but how we connect people with news content, such as articles from the Herald Sun or the Sydney Morning Herald, is no different than the way Search connects you to your footy team’s home page, a website with your favourite recipes, or official Government websites. We sent more than 3 billion clicks and visits to Australian news publishers in 2018 - for no charge - allowing these publishers to make money by showing their own ads, showing other articles or converting people into new paying subscribers—driving an estimated $218 million worth of value.

Yes. We recognise its role in educating and informing Australians, and in strengthening democracy. But it represents a very small proportion of the websites that people choose to visit from our search results. And it is not financially lucrative for us.

Google makes money from ads and we don't run ads on Google News or the News Tab in Search.

Last year, only a very small percentage of Google Search queries were news-related and Google generated approximately AU$10 million in revenue—not profit—from clicks on ads against news-related queries in Australia. Most of our revenue comes from search queries for highly commercial topics, like when someone searches for 'running shoes' and then clicks on an ad. Businesses want their ads to appear against queries when a user is looking to buy a product or find a good deal. It’s these types of queries that lie at the heart of our Search ads business.

Yes. Most websites want people to find their content in our Search results, but if a news site (or any other for that matter) doesn’t want to show up or wants to control what is shown on Google, they can choose to do so. They can do that whether their site is paywalled or free to view.

For many years we’ve helped publishers make money by providing tools and technology that helps them sell advertising on their sites. Businesses which advertise with Google can choose to have their ads appear on news publishers’ sites with a few clicks. This removes a lot of the hard work for Australian publishers and gives them access to a huge range of new advertisers - often overseas - who work with Google. Of course we pass on the vast majority of money these advertisers pay us directly to Australian publishers.

More recently we’ve created technology to help publishers drive revenue through subscriptions. In addition, we have developed the Google News Initiative, designed to help journalism adapt to the digital age. In Australia, we have partnered with the Walkley Foundation to deliver free training for up to 5,000 journalists and students in Australia and New Zealand. Nine Australian media organisations have received our Innovation Challenge and YouTube innovation funding. We also provide emergency funding to publishers impacted by COVID-19.

And importantly, in July, we announced a series of new deals to pay to license content for a new news product going live in the next couple of months.

Actually, an analysis recently conducted for Google by the economists at AlphaBeta, shows that the loss of newspaper revenue resulted primarily from the loss of classified ads to online classifieds businesses such as Domain, Realestate.com.au, Carsales and Seek. Between 2002 and 2018, newspaper revenue fell from $4.4 billion to $3.0 billion. Of that decline, 92% was from the loss of classified ads, and most of these classified revenues went to specialist online providers that target niches such as job advertisements, second-hand goods, or real estate listings. Almost none went to Google.

This proposed law is written extremely broadly. If we show Australians any content from any “news publisher” (defined to include any “website”) in the world, we must also show all news content of news businesses registered under the Code. For this purpose, "news" is defined very broadly - way beyond what most of us would consider “news”. This includes covering issues that are of ‘interest to Australians’, including foreign news and citizen journalism - which go well beyond traditional journalism to capture all kinds of information, blogs, videos and websites. That means we’d have to undertake a mass cull of content globally to stop them being visible to Australians - we’d have to remove all foreign newspapers, bloggers, YouTube citizen reporters, but also sports reporting, discussions of global health issues, tweets about current events, and literally endless other types of content from all sources around the world.

Put simply, it's extremely one-sided and unfair––so unfair that no company should be asked to accept it. Just before this law was proposed we had reached agreements with several Australian news organisations to pay them to license their content.

We're happy to pay more to license content, and want to support journalism as it transitions to a digital future, but a fair negotiation or arbitration should factor in the value both parties provide.

Under this law the arbitrator is not required to take into account the value we provide news businesses (s52ZP(2)). Google Search referred more than 3 billion visits to news businesses’ websites last year, which is estimated to be worth around $218 million—and this doesn’t include the many other ways we support publishers. The arbitrator is also not required to look at the significant costs we incur in providing our services, or the value of comparable deals, which would be the starting point for any standard arbitration.

All it looks at is the news organisation’s costs, its content’s value to Google, and whether the payment would put an undue burden on the digital platform. That means bigger news organisations with higher costs and more content will get paid more. Because of all this, the law is set up to encourage enormous and unreasonable demands.

It’s good that there’s now a robust public discussion about this important issue. As a start, here is the ACCC’s Draft Legislation. And here is a thorough article by an independent media analyst.

A broad cross section of the community including publishers, media figures, business leaders, academics, analysts, international organisations and people have all raised concerns about the unintended consequences of this new Code. This includes:

• Small publishers have raised concerns about the impact on their businesses: SMH and Ausdroid.

• Business leaders have criticised the idea in the Australian Financial Review and the Sydney Morning Herald/Age.

• Opinion pieces critical of the Code from the editorial boards of Bloomberg and the Financial Times.

• Academia - Professors Tom Smith and Martina Linnenluecke of Macquarie Uni.

• Business leader Mike Cannon-Brookes called the code ‘legalised theft’.

• Crikey political editor, Bernard Kean, published an article considering the rationale and potential consequences of the Code.

We help more than 20 million Australians and over one million businesses in Australia. Our engineering teams here contribute to global product innovation––in fact, Google Maps has its origin in Australia. We have invested significantly in this country. We are proud to work with the Government and others to contribute to our economic recovery and a growing digital economy. So we want to make the law workable. At the moment it’s simply not, for the reasons we outlined in our Open Letter and above. We’ll keep working to impress this upon the Government and will keep raising our concerns so Australians know where we stand.