Australia competition watchdog on Google and media bargaining code

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An employee passes the Google logo.

Carsten Koall/Getty Images

SINGAPORE — The head of Australia’s competition watchdog says Australia won’t want to see Google leave, but if the tech company decides to exit the country because it is unable to reach an agreement with the government, it has to be “their call.”

A media bill was introduced in parliament last year that would require digital platforms to pay local media outlets and publishers to link to their content. If the tech companies and publishers cannot reach an agreement, a government-appointed panel will decide on the price.

Google last month threatened to pull its search engine from Australia where it has a staggering 94.5% market share.

“It’s very much their call,” Rod Sims, chair of the Australian Competition and Consumer Commission (ACCC), said on CNBC’s “Street Signs Asia.”

“It’s not what we want to happen. But obviously, at the end of the day, you’re just not going to be able to have a negotiation, have proper public policy, if you have to do whatever they want,” he said. “If they then left the country, that would be very unfortunate but ultimately that’s got to be their call.”

Prime Minister Scott Morrison said Thursday he had a “constructive meeting” with Google boss Sundar Pichai and that the company understands that “Australia sets the rules for how these things operate.”

Discussions are still ongoing. Google argues that the current version of the proposed legislation does not work for its products and services in Australia, but it’s willing to pay publishers for value. The tech giant said last year the new legislation would give local news media businesses an “unfair advantage.”

‘High stakes game’

Sims said the current situation is a “high stakes game” for both Australia and Google.

The tech firm’s absence would allow other players to chip away at its mammoth market share in the search space — Microsoft has already held talks with the Australian government and senior leaders have publicly supported the proposed legislation.

“Others will certainly want to come in,” Sims said, adding the proposed law — referred to as the media bargaining code — has already been amended after taking into consideration the initial issues Google raised last year.

“What you can’t avoid though is: you must have arbitration,” Sims said.

Greater global scrutiny on Big Tech

He explained that Google’s near-monopoly status in search — and Facebook‘s similar status in the social media space — creates a bargaining power imbalance between the tech companies and media businesses. The presence of an arbitrator can ensure “a fair value exchange between the platforms and the news media businesses,” he added.

The competition watchdog is also in contact with similar regulatory bodies in other countries. Sims said there is a growing momentum for platforms to pay for some of the benefits they get from news media even though the means of doing so can vary by country. He pointed to an example in France where Google agreed to pay French publishers for news content as part of a major digital copyright deal.

Google recently launched News Showcase in Australia. It is a service where Google says it will pay Australian news publishers monthly to curate their content and access their paid articles to make selected stories available for free across Google services.

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