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Australian Treasurer Josh Frydenberg said it was “inevitable” that Google and other tech giants will eventually have to pay to use media content, responding to the internet giant’s threat to turn off its web engine. research in the country if he is obligated to pay local publishers for information.
Google said on Friday that a bill, intended to compensate publishers for the value their stories generate to the business, is “unworkable,” opposing the requirement to pay media companies to display clips articles in search results.
As Google escalates a months-long standoff with the government, Frydenberg said Australia could either be a “world leader” in pushing for the code or wait to follow others in passing similar legislation.
“It appears the digital giants did themselves a big disservice last week when they very openly and publicly threatened the Australian public to effectively withdraw from Australia if the legislation continued as it is now,” Frydenberg said.
The threat is Google’s most potent yet as the digital giant tries to stem a flow of regulatory action around the world, but such a drastic move would put an entire developed market on its rivals. At least 94% of online searches in Australia go through the Alphabet Unit Inc., according to the local competition regulator.
Google sees close deal on world’s first pay for news law
However, Google’s market share puts the company in a position to increase the revenues of other companies to offset the higher costs.
“The company’s primary product in search relative to competitors such as Yahoo, Bing and Microsoft’s DuckDuckGo makes it unlikely that advertisers and publishers will be able to switch to competing platforms to generate referral traffic in the short to medium term. “, according to Bloomberg Intelligence analysts Mandeep Singh and Matthew Martino. “The company could compensate for this by increasing ad prices and reducing the traffic acquisition costs paid to mobile network operators.”
Alphabet can pass publisher’s content costs on to advertisers: Respond
Facebook Inc., the only other company covered by the legislation, also opposes the law in Australia. The social media platform reiterated during Friday’s hearing that it plans to prevent Australians from sharing information on Facebook if the law passes.
Frydenberg also accused tech giants of shifting goals when it comes to expressing resistance to the code, after first rejecting a final arbitration model, to now oppose the idea. to pay for the clicks displayed under the search results.
“If clicks for media are such a small proportion of their overall clicks on their search, then ultimately independent adjudicators will find that it should reflect that payout for content – reflecting the benefit for Google, for Facebook. to have this media content on their sites, ”he said.
The legislation is designed to support a local media industry, including that of Rupert Murdoch News Corp., which has struggled to adapt to the digital economy. Google’s tougher stance drew reprimands from lawmakers at the hearing, with Prime Minister Scott Morrison saying on Friday that “we are not responding to threats.”
“It’s about control and power,” said Johan Lidberg, associate professor at Monash University in Melbourne, specializing in media and journalism. “They signal to other regulators that they will have a fight on their hands if they do.”
Google’s Australian search threat will yield bad results: Alex Webb
– With the help of Angus Whitley
(Add analyst commentary to seventh paragraph.)
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