As the Australian Government pushes ahead with law reform that would essentially force Google and Facebook to share their revenue with Australian news publishers, Google has this week launched a new campaign to inform Australian users of the threat such regulations could pose to its services in the region.

As you can see in the above messaging, shared by YouTube on Twitter, and re-iterated in an official announcement on the Google blog, Google says that the proposed changes to Australian media regulations could disadvantage creators in various ways:

• YouTube may be obligated to give large news publishers confidential information about our systems that they could use to try to appear higher in rankings on YouTube, disadvantaging all other creators. This would mean you could receive fewer views and earn less.
• It will create an uneven playing field when it comes to who makes money on YouTube. Through the YouTube Partner Programme, we already share revenues with partners who monetize on YouTube, including news publishers – and we are proud to support quality journalism. But through this law, big news businesses can demand large amounts of money above and beyond what they earn on the platform, leaving fewer funds to invest in you, our creators, and the programs to help you develop your audience in Australia and around the globe.
• Under this law, big news businesses can seek access to data about viewers’ use of our products. YouTube believes user data protection is paramount and we should not be required to hand this data over.

Google has also added new pop-up warnings for Australian users, like this one on a YouTube clip:

To clarify, the current proposal put forward by the Australian Government would implement a mandatory code of conduct which would compel Google and Facebook to share any revenue they generate as a result of news content with the relevant publishers of such material.

The proposals stem from an official report into the Australian news industry, published in 2019, which found, for example, that:

“Between 8 and 14 per cent of Google search results trigger a “Top Stories” result, which typically includes reports from news media websites including niche publications or blogs.”

With major news publishers struggling amid the COVID-19 pandemic, and Google and Facebook generating huge income from Australian users, the Government is seeking to address this imbalance by ensuring that publishers are compensated for such usage.

But the proposal is, at best, half-baked, and overlooks the fact that Google and Facebook also drive huge amounts of traffic to news publishers, providing them with significant benefit.

The balance of power in this case, is skewed towards the platforms, and as they’ve done in the face of similar proposals in other regions, Google and Facebook could instead opt to just stop using Australian news publisher content entirely, rather than paying the defined fees.

On the basis of this proposal, that would be a major blow for both platforms, so they likely won’t take that path. But in reality, the publishers are more reliant on Google and Facebook than the other way around, which will ultimately see the changes fail to deliver on their intended goals.

But still, the Australian Government is pushing ahead, and other nations are watching on to see whether they may be able to implement similar regulations. And while, as noted, various regions have tried to force Google, in particular, to share its revenue with publishers in the past, the Australian proposal is different in that it uses competition law, as opposed to copyright. 

In response to Google’s new counter-campaign, the Australian Competition and Consumer Commission has said that Google is not being truthful in its portrayal of the facts.

“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. Google will not be required to share any additional user data with Australian news businesses unless it chooses to do so.”

But that, again, points to a core problem – Australia can implement laws which force revenue sharing, but Google could still subvert them by altering its own workings. 

That would lead to negative impacts for Australian users, and potentially a worse situation for local publishers.

In theory, the idea that you can make the digital giants pay their fair share, in order to subsidize the news sector, has merit. But in practice, that’s a lot harder to cement. A more viable process could be to force Google and Facebook to pay their fair tax share in the region – according to reports, both Google and Facebook have paid only marginal tax on their earnings in the Australian market because they’ve been able to funnel their expenses through lower-cost nations, like Singapore, in order to reduce their tax burden.

If the Australian Government could ensure the companies were required to pay tax in their market, they could then funnel those tax dollars into relevant support packages for the news industry. But that would required more wide-scale reform, and would likely impact on other businesses as well, many of which may be political party donors and the like.

It’s a complex undertaking, and clearly no one has all the answers. But the current proposal looks set for much more debate before we see any official ruling.