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Google has launched a brazen attack on the Australian press and threatened to end free web searches after the country’s competition watchdog said the tech giant should pay for news content.

Anyone using the search engine in Australia is now confronted by an abrasive yellow exclamation mark with a link to an ‘open letter’ which attacks the Australian Competition and Consumer Commission.

The ACCC’s draft law – created at the behest of the treasurer Josh Frydenberg – mandates that a sliver of the colossal $6billion ad revenue generated by Google and other tech giants like Facebook, goes to news corporations.

The battle between Canberra and Silicon Valley will be watched keenly by governments across the world, not least in London and Washington, which have raised concerns over the ‘advertising duopoly’ operated by Google and Facebook. 

In the United Kingdom, 36.7% of all online advertising revenue is earned by Google and 28% by Facebook. The online advertising market was worth £13.5billion in the UK last year. 

Google has been accused of spreading ‘misinformation’ by claiming Australians will be denied free internet searches if tech giants like them are forced to pay for news they use

Anyone using the search engine is now confronted with a yellow exclamation mark with a link to a so-called 'open letter to Australians' from the company's managing director in Australia Mel Silva

Anyone using the search engine is now confronted with a yellow exclamation mark with a link to a so-called ‘open letter to Australians’ from the company’s managing director in Australia Mel Silva

Google has put individual deals it was planning with news organisations on hold in Australia after the watchdog revealed its draft law. 

In June, Google unveiled a new licensing platform which, it is believed, was an attempt to negotiate cheaper deals with news companies and prevent being hit by any expensive legislation.

Australians are today being greeted by a strongly-worded letter from Google’s managing director in Australia Mel Silva. Those who click on the link are confronted with a warning about the end of free internet searches and data being ‘handed over to big news businesses’. 

Google's managing director in Australia Mel Silva: 'We need to let you know about new government regulation that will hurt how Australians use Google Search and YouTube'

Google’s managing director in Australia Mel Silva: ‘We need to let you know about new government regulation that will hurt how Australians use Google Search and YouTube’

‘We need to let you know about new government regulation that will hurt how Australians use Google Search and YouTube,’ Ms Silva’s letter said.

‘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.’

But the ACCC has hit back – accusing Google of not telling the truth.

‘The open letter published by Google today contains misinformation,’ ACCC boss Rod Sims said.

Last month, the ACCC declared Google and Facebook would be forced to pay media companies for the right to use their stories or face fines of up to $10million for breaching a copyright deal.

In a world first, the competition regulator is proposing a new draft code directing the American search engine and social media giants to negotiate fair payment deals with commercial media outlets.

Google hinted its rankings would end up favouring news outlets that had entered into commercial arrangements with them under the ACCC proposal.

‘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,’ Ms Silva said.

‘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.

‘The proposed changes are not fair and they mean that Google Search results and YouTube will be worse for you.’

Swinburne University senior media lecturer Belinda Barnet, who specialises in social media, pointed out Google's parent company Alphabet had fourth-quarter earnings of more than $US45billion. The earnings added up to $US38.3billion or $A53billion

Swinburne University senior media lecturer Belinda Barnet, who specialises in social media, pointed out Google’s parent company Alphabet had fourth-quarter earnings of more than $US45billion. The earnings added up to $US38.3billion or $A53billion

Ms Silva also claimed Google would have to hand over data to media companies.

 ‘You trust us with your data and our job is to keep it safe,’ she said.

‘Under this law, Google has to tell news media businesses ‘how they can gain access’ to data about your use of our products.

‘There’s no way of knowing if any data handed over would be protected, or how it might be used by news media businesses.’ 

Mr Sims strongly disputed Google’s open letter and said it would not be required to ‘charge Australians for the use of its free service such as Google Search and YouTube, unless it chooses to do so’.

‘The open letter published by Google today contains misinformation about the draft news media bargaining code which the ACCC would like to address,’ he said. 

Mr Sims said the draft code was designed to address ‘a significant bargaining power imbalance between Australian news media businesses and Google and Facebook’.

‘A healthy news media sector is essential to a well-functioning democracy,’ he said. 

Swinburne University senior media lecturer Belinda Barnet, who specialises in social media, pointed out Google’s parent company Alphabet had fourth-quarter earnings of more than $US38.3billion ($A53billion).

‘Oh cry me a river, Google,’ she tweeted. 

‘A trillion-dollar company with Q4 earnings of $46 billion is trying to convince YOU that sharing a *teeny tiny fraction* of their earnings with Australian media outlets is somehow dangerous.’

The Australian Competition and Consumer Commission has accused Google of releasing a letter that 'contains misinformation'

The Australian Competition and Consumer Commission has accused Google of releasing a letter that ‘contains misinformation’

Under the ACCC’s draft code, a maximum penalty of $10million would be imposed on the multinational companies if Google or Facebook breached a deal to share content and were convicted in the Federal Court.

The digital giants could also be fined the equivalent of three times the commercial benefit they obtained from illegally sharing the news content, or ten per cent of their annual revenue in Australia during the past year.

Under the proposed new arrangement, Google and Facebook would be forced into third-party arbitration with media companies if they failed to reach an agreement with them.

An independent umpire would make a decision within 45 business days. 

Google had sought a means around being compelled to share its profits by doing individual deals with newspaper publishers. 

Publisher Curated News – a news licensing product – was announced by Silva in June. At the time it was considered a major backtrack after the tech giant had said that news was not a major revenue source. 

But according to the Sydney Morning Herald, industry insiders revealed those deals have now been put on ice and talks with other publishers suspended after the ACCC’s draft law was revealed.

‘Our hope was that the Code would be forward thinking and the process would create incentives for both publishers and digital platforms to negotiate and innovate for a better future – so we are deeply disappointed and concerned the draft Code does not achieve this,’ Ms Silva said.

Under the ACCC’s plan Google will have three months to negotiate deals with media companies before an independent body will arbitrate an arrangement on their behalf.

It is not clear precisely how much news corporations will get, or how many of them will be entitled, but ACCC chairman Sims said the proposal would not wipe billions off Google’s profits.

The competition watchdog is hosting talks with publishers this week and once those have concluded, the legislation will be finalised.

ACCC chairman Rod Sims strongly disputed Google's open letter and said it would not be required to 'charge Australians for the use of its free service such as Google Search and YouTube, unless it chooses to do so'

ACCC chairman Rod Sims strongly disputed Google’s open letter and said it would not be required to ‘charge Australians for the use of its free service such as Google Search and YouTube, unless it chooses to do so’

The TRUTH about how new laws will affect Google’s users 

‘We need to let you know about new Government regulation that will hurt how Australians use Google Search and YouTube’

Not true. The new law will make no difference at all to how Australians use Google Search and YouTube. You will be able to search both in exactly the same way you do at present. The only change will be that Google will have to pay for Australian news content which at the moment they use for free. As Google’s Australian revenue in 2019 was $4.8 billion it should not find this difficult.

‘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.’

Not true. The Code will not force Google to provide a worse service, on the contrary it contains provisions to prevent it removing Australian news websites and replacing them with foreign ones. It will not lead to your data being handed over to news businesses, big or small. This is the ACCC’s response Google’s claim: ‘Google will not be required to share any additional user data with Australian news businesses unless it chooses to do so’. Nor will the Code put free services at risk. The ACCC says: ‘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.’

‘The way Aussies search every day on Google is at risk from new regulation. You’ve always relied on Google Search and YouTube to show you what’s most relevant and helpful to you. We could no longer guarantee that under this law. 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 … We’ve always treated all website owners fairly when it comes to information we share about ranking.’

Blatantly untrue. Google’s search algorithms are a secret ‘black box’, and rankings are regularly changed without warning or explanation, sometimes with catastrophic effects for businesses.

To give just one example: June 2019 Google made an algorithm change which reduced the Daily Mail’s search visibility by 50pc worldwide – meaning dramatic reductions in the number of Daily Mail stories appearing in your search requests. There was no warning or explanation – nor did Google inform you, the user. Three months later our search visibility was suddenly restored, again without warning or explanation. Many other websites have had similar experiences.

The Code simply provides that Google will have to give warning and explanation of changes that could impact traffic to a news website – and tell it how it can minimise any damage. If Google thinks that is unfair, fine – they can provide the same information to every website. Now, that would be fair.

‘Your Search data may be at risk. You trust us with your data and our job is to keep it safe. Under this law, Google has to tell news media businesses ‘how they can gain access’ to data about your use of our products.’

Not True. As the ACCC says, Google will not have to share any more user data than it does already. The ACCC’s explanatory notes make clear it is lists of types of data Google must provide to news media businesses, not the data of individual users. In any case, why should users trust Google more than any other business? Only last month the ACCC launched Federal Court action over the alleged misuse of users’ personal data by Google, and Google has previously been fined millions of dollars in Europe for misusing users’ data.

‘Hurting the free services you use.’

Not true. Google’s services aren’t free – you pay for them with your data, which Google collects in order to sell advertising targeted at you. Google doesn’t pay news media businesses millions of dollars. It currently pays nothing at all for the news it uses – and only began offering to pay when it realised the ACCC was going to call its bluff by introducing legislation.

It has also bought control of digital advertising by taking over smaller businesses to create a virtual monopoly, where it acts as both buyer and seller in digital advertising markets it controls, and for which it makes the rules. It forces news media businesses and advertisers to use its services and charges both millions of dollars, some it in hidden fees. The result is consumers pay more for the goods they buy. These anti-competitive practises are under investigation by the ACCC here in Australia and by regulators in other countries.

This law wouldn’t just impact the way Google and YouTube work with news media businesses – it would impact all of our Australian users, so we wanted to let you know.

Not true. The only impact this law will have on Australian users is that intended by the ACCC – that instead of Australian journalism dying through being starved of revenue by monopolistic internet giants, it will have a sustainable future, for the benefit of all Australians. Oh, and Google – global annual revenue in 2019 $161 billion dollars – might make just a little less profit

You’ll hear more from us in the coming days – stay tuned.

True, regrettably. Google has won immunity from libel laws all over the world by claiming it has no opinions. Well, it does when its bottom line is under threat. It runs one of the world’s largest lobbying operations and have no doubt, Australian legislators will be bombarded with misinformation as Google tries to overturn the ACCC’s proposals. Watch out! 

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