Search engine says economic benefit it gets from Australian news is ‘very small’ and publishers are using ‘inaccurate numbers’ in talks with ACCC
Amanda Meade– The Guardian
Google Australia has rejected calls for the search engine giant and Facebook to pay Australian media companies $600m a year for using their news content, saying the figure is based on “unfounded assertions”.
The managing director of Google Australia, Mel Silva, says the economic benefit Google gets from Australian news is “very small” and publishers are using “inaccurate numbers” in their talks with the Australian Competition and Consumer Commission.
The treasurer, Josh Frydenberg, has instructed the ACCC to develop a mandatory code between media companies and digital platforms including Google and Facebook.
The code would ensure the digital giants share advertising revenue with Australian media companies, including News Corp, Seven West Media and Nine Entertainment.
Silva has returned fire after Nine chairman Peter Costello said last month that Google and Facebook should pay around 10% of the revenue they earn from Australia.
Costello based the figure on a finding in the digital platforms inquiry that the tech giants garnered roughly $6bn of the online advertising market in Australia in 2018.
But Silva says the figures are inaccurate and in 2019 Google generated approximately $10m in revenue from clicks on ads against possible news-related queries in Australia. The bulk of their revenue comes from commercial queries not news.
Google is insistent that news publishers benefit financially from Google Search, claiming the search engine sent 3.44bn visits to publishers “for free” in 2018.
A study by Deloitte in Europe estimated that Google Search sent $218m in value back to Australian publishers in 2018, Silva said.
“There’s been some recent talk about the profitability of online news in Australia, including the suggestion that online platforms should be forced to pay publishers $600m or more every year,” Silva said in a Google blog post on Sunday.
“This is based on an assertion that news accounts for 10% of queries and generates about 10% of our gross revenues in Australia.”
Silva says she wanted to inject some facts into the debate about how valuable news content is to Google.
“We all agree that high-quality news has great social value, but we need to understand the economics as well,” she said.
“We would like to provide some facts and figures to address inaccurate claims about the economics of links to news content on Google Search, as well as highlight our ongoing commitment to work with media companies to increase the value they get from their news content.”
“In summary, news media businesses are likely to derive far more cross-content benefit than they generate,” she said.
“To put it plainly, a lot of people (Australians and beyond) click from Google through to Australian news websites, which gives publishers the chance to make money by showing them ads or turning them into paying subscribers.”
Facebook is also pushing back against the Australian government’s attempt to extract millions of dollars from tech giants to pay for media content shared through search and social media, saying it is “disappointed”.