Enlarge /. Tim Berners-Lee, inventor of the World Wide Web, criticized the Australian proposal.
Oliver Berg / Image alliance via Getty Images
Google says it will have "no choice" but to shut down its search engine in Australia if Australia passes a new law requiring Google to pay news sites to link to their articles. This would "set an untenable precedent for our business and the digital economy," said Google's Mel Silva on Friday before the Australian Senate.
News organizations around the world have had financial problems for the past decade or two. Many have accused internet companies such as Google and Facebook who they believe diverted advertising revenue that once went to news organizations. Some in the news industry argue that Google benefits from including news in its search results and should compensate news sites for the privilege of doing so.
Last year, the Australian Competition and Consumers Commission proposed a new mandatory arbitration process to correct a supposed power imbalance between tech giants and Australian news sites. Under the new framework, news sites can require tech platforms (initially Google and Facebook) to pay them to link to their stories. Google and Facebook need to negotiate a payment arrangement "in good faith".
You might think Google would just stop linking to Australian news sites. However, this is not allowed under the ACCC proposal. Under the new anti-discrimination rules, Google must treat websites equally whether it has to pay to be linked to them or not.
The Australian proposal has sparked widespread backlash from proponents of the open web – including the inventor of the web himself. In a letter to the Australian Senate earlier this week, Tim Berners-Lee argued that Australia's proposal would set a harmful precedent.
"To the best of my knowledge, there is currently no example of a law requiring payment for links to other content," said Berners-Lee. "The ability to link freely – that is, with no restrictions on the content of the linked website and without financial fees – is fundamental to the functioning of the web."
Google is under pressure worldwide
Australia isn't the only country where Google is facing increasing pressure to pay news sites. This week, Google announced that it had negotiated a framework to pay French news sites for the right to include them in their search results.
Technically, French law is different from Australia's proposal. In its 2019 law transposing the EU Copyright Directive, France asked Google to pay for the use of news "snippets" in search results. Google no longer uses the snippets to avoid paying. But then the French competition authority protested, arguing that the refusal to use snippets and pay news sites to do so was an abuse of Google's market power. Despite reservations about French law, this week Google announced an agreement with French news organizations.
As we wrote on Thursday, France's success offers a roadmap for other European countries that want to force Google to pay their news organizations too. And it could also undermine Google's bargaining power in Australia. In Australia, Google has portrayed free links as a principle so sacrosanct that it shuts down its search engine before agreeing to pay. In France, Google appears to have accepted a similar agreement without shutting down the French search engine. (To update: You can find more information on this in the following Google statement.)
This may be because France has more influence than Australia. Not only is France a bigger country than Australia, but France's membership of the EU may have given it additional influence.
On the other hand, the specifics of the Australian proposal may offend Google. One area of concern for Google is the use of baseball-style arbitration rules. As part of this negotiation system, each side (in this case Google or Facebook on one side and a news publisher on the other) makes a single proposal to a neutral arbitrator. The referee must then decide which of the two proposals is "more reasonable" and accept it. In theory, this structure gives both sides an incentive to meet the other party halfway. However, Google fears that the system is based on "biased criteria" and creates "an unmanageable financial and operational risk for Google".
Under the Australian proposal, Google will have to give Australian news sites 28 days' notice of any changes to the search algorithm. Google has traditionally kept details about its algorithm secret, arguing that giving this information to Australian news publishers would give these publishers an unfair advantage over other websites.
The new Australian law would also require Google to share traffic data with news sites, raising user privacy concerns.
In any case, Australian officials don't seem concerned about Google's opposition.
"We do not respond to threats," said Australian Prime Minister Scott Morrison on Friday. "Australia sets our rules for things you can do in Australia."
Update, January 24th: Google sent us the following statement by email:
Our problems with the current version of the Australian Code are not about money, we are willing to pay. It's about getting paid for links and snippets, which EUCD (and the French implementation) don't do. Here we draw the line. Links and snippets are the building blocks of the free and open web. To pay publishers in Australia we suggest doing the same thing as in France – paying publishers for value with News Showcase. The difference would be that News Showcase would operate under the Code, which means that publishers can arbitrate News Showcase to resolve any disagreements.