Google proposes News Showcase as payment model for bargaining code

Mariam Cheik-Hussein
By Mariam Cheik-Hussein | 18 December 2020
Mel Silva

Google says the federal government’s updated news media bargaining code remains “unworkable” for the tech giant, and has proposed its News Showcase fund as an alternative payment model.

Legislation for the code was introduced to parliament last week and is being referred to a Senate Committee for inquiry. Facebook, which has previously said it would stop news content in Australia if the code was passed, said it would engage with the government to find a “workable” framework.

In a blog post today, Google AUNZ managing director Mel Silva says the code still has “serious problems” despite changes from the government.

One issue for Google is that the code would force it to pay publishers to show their links in its search engine. Google says this is “fundamentally breaking how search engines work and setting the groundwork to unravel the key principles of the open internet”.

Instead, Google has proposed a model where it pays Australian news businesses through its Google News Showcase, a global US$1 billion fund. Earlier this month, Google made updates to the fund that meant it would pay publishers for their pay-walled content.

“This program, designed to drive traffic, lift subscriptions, and generate revenue for publishers, remains on hold in Australia until we can be sure that the final Code is workable,” Silva says.

“Making it available here would enable normal commercial bargaining between publishers and platforms based on comparable market rates.

"We would be paying for publishers’ editorial expertise and for beyond-the-paywall access to news content for users—not for links to news content. Of course, News Showcase would still be subject to a Code, and backstopped by a standard commercial arbitration model.”

Silva once again pushed against the use of the final-offer arbitration model, and called for the use of standard commercial arbitration model instead.

“The current model still isn’t based in commercial reality. Ultimately, by imposing final-offer arbitration with biased criteria, it encourages publishers to go to arbitration rather than reaching an agreement,” Silva says.

“Arbitration has been touted as a ‘last resort’—but the Government’s own explanatory materials seem to contradict this, suggesting 75% of negotiations under the Code will end up in arbitration (and according to the Government this is a conservative estimate).

“And while the Code professes to recognise the value Google Search provides to publishers, in fact it encourages publishers to argue that arbitrators should disregard that value. It does this by allowing the arbitrator to consider a hypothetical scenario in which there is no Google Search and yet publishers receive the same amount of traffic, just from other sources. This scenario—laid out in the explanatory materials— invites unfair outcomes based on speculation rather than evidence.”

Silva also says the government’s changes to algorithm notices haven’t gone far enough. The final legislation says that the period of notice Facebook and Google are required to give to publishers about algorithm changes has been reduced from 28 to 14 days. It has also been restricted to “conscience” algorithm changes that will have significant impact on ranking, rather than the “machine-learning progress” of algorithm changes that happen continuously.

However, Silva says it’s still not feasible, as Google makes thousands of updates every year.

“As we enter this new stage of the process, we’ll keep engaging constructively with the Government, Members of the Parliament, the news industry and the ACCC, so we can get to a final Code that works for everyone: publishers, platforms, and all Australians,” she says.

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