Google has started targeting Australians with pop-up ads that link to an open letter that contains “misinformation”, according to the consumer watchdog, as the tech company campaigns against a proposed code that would force it to share advertising money with media companies.
The international tech giant is waging a campaign against the Australian Competition and Consumer Commission, which at the request of the treasurer, Josh Frydenberg, has developed a mandatory code that would require Google to share a portion of its multi-million dollar advertising revenue with Australian media organisations and newspapers.
Since the beginning of the coronavirus pandemic, more than a hundred regional and rural newspapers have shut down or stopped printing, and hundreds of journalists have been made redundant as advertising revenue has dropped.
Newspapers have argued that Google benefits and makes money from news and analysis that media organisations provide, with News Corp Australia chairman, Michael Miller, saying “they derive immense benefit from using news content created by others”.
As of Monday morning, Australian internet users who search on Google have been presented with a small pop-up ad that tells them “The way Aussies use Google is at risk”.
The ad, which resembles a warning, tells users “your search experience will be hurt by new regulation”.
Users who click through are taken to an open letter, written by Google Australia’s managing director, Mel Silva, headed by a large warning sign icon.
“We need to let you know about new government regulation that will hurt how Australians use Google Search and YouTube,” the letter states.
“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.”
In a statement released on Monday afternoon, the chair of the ACCC, Rod Sims, said Google’s letter “contains misinformation” about how the code would work.
He said any charges to currently free Google services would be at the company’s discretion.
“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,” Sims said. “Google will not be required to share any additional user data with Australian news businesses unless it chooses to do so.”
Sims said the code – which is still in draft form – was about addressing “a significant bargaining power imbalance between Australian news media businesses and Google and Facebook”.
“The draft code will allow Australian news businesses to negotiate for fair payment for their journalists’ work that is included on Google services. A healthy news media sector is essential to a well-functioning democracy.”
The chief executive of Free TV Australia, Bridget Fair, said the Google letter was “deliberately inaccurate”.
“Google has shown once again how important free, strong independent news media industry is in Australia so that they can hold Google to account for pushing such deliberately inaccurate information to its users,” she said.
Fair said the pop-up ad campaign was evidence of “a monopolist flexing its considerable muscle” to hold onto “excessive profits”.
“Google’s letter is straight out of the monopoly 101 playbook trying to mislead and frighten Australians to protect their position as the gateway to the internet. We’ve seen this kind of tactic before from big businesses trying to stop regulators from evening up the playing field so that they can hold on to excessive profits. Hopefully, they will not succeed.”
According to the ACCC, tech giants such as Google and Facebook made roughly $6bn from the online advertising market in Australia in 2018.
Monday’s open letter from Google said that the revenue sharing code would “put free services at risk”.
“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,” it states.
“News media businesses alone would be given information that would help them artificially inflate their ranking over everyone else, even when someone else provides a better result.”
Google also argues in the letter that it already pays media organisations “millions of dollars and sends them billions of free clicks every year”.
“We’ve offered to pay more to license content. But rather than encouraging these types of partnerships, the law is set up to give big media companies special treatment and to encourage them to make enormous and unreasonable demands that would put our free services at risk.
“We’re going to do everything we possibly can to get this proposal changed. You’ll hear more from us in the coming days – stay tuned.”
Earlier this year, Google said the economic benefit it gets from Australian news is “very small” and the media are using “inaccurate numbers” in their submissions to the ACCC.
Silva said in June that the $6bn figure for 2018 used by the ACCC was inaccurate and that in 2019 Google made only $10m in revenue from ads related to news articles.
The code will require Google and Facebook to negotiate in good faith and pay news media for use of their content.
Eligible news organisations must predominantly create and publish news in Australia, serve an Australian audience, and be subject to professional editorial standards, and editorial independence from the subject of the news coverage. Their revenue must exceed $150,000 per year. Public broadcasters ABC and SBS would be excluded.
Frydenberg has previously said the intention of the code was not to disadvantage Google and Facebook but “to create a level playing field”.
Fair said: “The ACCC code is about ensuring a free and vibrant Australian news media sector into the future. This breathtakingly misleading letter is not about consumer safety, it’s about Google maintaining money, control and market power.”
