The head of Google Australia dismissed claims the company generates large profit from news-linked advertising, as she weighed into a row over the sums the search giant and other tech companies should pay publishers.
Mel Silva, MD and VP of Google Australia, used a blog to argue against proposals the company should pay publishers AUD600 million ($404 million) or more each year, noting the search giant made barely a fraction of this in news-based advertising revenue.
Australia’s government detailed plans to require tech giants to share advertising revenue with domestic publishers in April, directing competition regulator the ACCC to develop a code of conduct to address perceived imbalances in bargaining power between news media businesses and digital platforms.
But Silva said Google generated around AUD10 million in news-specific advertising revenue in 2019, with the bulk of its ad income coming from commercial queries.
The indirect economic value Google generates from news is also very small, she claimed.
Silva explained the company is working with the government, regulators and industry to find ways to licence and pay for access to news content beyond simple snippets, but said the AUD600 million figure was based on an inaccurate belief that news accounts for 10 per cent of queries and generates about the same amount of its gross revenues in Australia.
“The mandatory code will have important consequences for Australians, including how and which types of news they can search and discover through Google”, she warned, adding it was important “to base decisions on facts, not inaccurate numbers and unfounded assertions”.
Broader moves
In May, the ACCC called for feedback on the proposed code with the target of releasing a draft for public consultation before the end of July. At the time, chair Rod Sims said its digital platforms inquiry highlighted the acute need to address the imbalance.
The government in December 2019 accepted key recommendations [1] by the nation’s consumer watchdog to develop a comprehensive roadmap for broad reforms relating to digital platforms.
In 2018, the ACCC proposed a new regulatory body [2] be given the authority to monitor Google and Facebook’s digital platforms to determine the impact their dominance has on the online search and advertising markets.
[1] https://www.mobileworldlive.com/asia/asia-news/australia-moves-to-clamp-down-on-digital-platforms/
[2] https://www.mobileworldlive.com/asia/asia-news/accc-recommends-more-oversight-of-google-facebook/
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