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February 17, 2021updated 30 Sep 2022 10:02am

News Corp strikes global cash-for-content deal with Google as tech giant fights regulation in Australia

By Dominic Ponsford

Australian lawmakers are proposing to water down the News Media Bargaining Code as Google seeks to buy off news publishers with a flurry of deals.

The code has cross-party support in Australia and is expected to be passed into law this month, despite Google’s threat to quit the country in protest.

News Corp was the latest publisher to strike a deal with Google, announcing a “multi-year partnership” for its content to appear on the Google News Showcase “in return for significant payments”.

Titles covered by the deal include: The Wall Street Journal, Barron’s, MarketWatch, New York Post, The Times, Sunday Times, Sun, The Australian and

News Corp said the deal includes “the development of a subscription platform, the sharing of ad revenue via Google’s ad technology services, the cultivation of audio journalism and meaningful investments in innovative video journalism by Youtube”.

News Corp CEO Robert Thomson, who has been one of the fiercest critics of Google and Facebook’s duopoly over the advertising market, said: “I would like to thank Sundar Pichai and his team at Google who have shown a thoughtful commitment to journalism that will resonate in every country. This has been a passionate cause for our company for well over a decade and I am gratified that the terms of trade are changing, not just for News Corp, but for every publisher.

“The deal simply would not have been possible without the fervent, unstinting support of Rupert and Lachlan Murdoch, and the News Corp Board. For many years, we were accused of tilting at tech windmills, but what was a solitary campaign, a quixotic quest, has become a movement, and both journalism and society will be enhanced.

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“Particular thanks are certainly due to the Australian Competition and Consumer Commission’s Rod Sims and his able team, along with the Australian Prime Minister, Scott Morrison, and Treasurer Josh Frydenberg, who have stood firm for their country and for journalism.”

On a News Corp earnings call earlier this month Thomson said: “On these calls I have often referenced the ongoing debate with what is loosely called Big Digital – I personally regard that moniker as a euphemism.

“We are at a pivotal moment of those discussions in Australia, where new regulations and new terms of trade will be introduced. But that debate now extends across the globe.

“There is not a single serious digital regulator anywhere in the world who is not examining the opacity of algorithms, the integrity of personal data, the social value of professional journalism, and the dysfunctional digital ad market.

“This has been an imperative for News Corp for far more than a decade – I gave evidence to the House of Lords in London on this very subject in 2007 – and it has been an imperative because we truly care about the social value of journalism and we believe that the social value has a commercial value.

“We expect that the new tech topography will benefit our company’s financial fortunes, that is for certain, and it will also have a material impact in not only the countries in which we operate, but in every country. An ambitious, inspired young woman starting a digital news site in Nigeria or in Birmingham, England, or Birmingham, Alabama, now has a far better, a far, far better chance of sustainable success.”

Press Gazette has been arguing that Google and Facebook need to share more of their revenue with publishers since 2017 when this title launched its Duopoly campaign.

What is the News Media Bargaining Code?

The code proposes the following:

  • An arbitration system which would make binding decisions on fees paid to news publishers for Google and Facebook’s right to republish links and snippets of content
  • A requirement that news media is given advance notice of changes to algorithmic ranking methods
  • Google and Facebook must appropriately recognise news content
    and share data collected through interactions with news content.

The Australian reports today on changes proposed by the government which include:

  • Any payments to publishers can be made as annual lump sums, rather than pay per click.
  • It is also proposing to simplify the requirement that Google and Facebook give notice of changes to their algorithms.

Peter Lewis, director of Australia Institute’s Centre for Responsible Technology, said: “What is crucial is that the code provides a systemic response to the monopoly power of Google and Facebook by recognising the public interest in news journalism.”

Google’s side-deals with Australian publishers

Meanwhile, Google is seeking to strike deals with publishers to sign up to its Google News Showcase, a project which launched in the UK last week and will see the search giant spend $1bn over the next three years paying news publishers around the world for content.

Magazine and newspaper giant Seven West Media struck a deal with Google on Monday which is said, by The Australian, to be worth well in excess of Aus$30m per year (US$23m).

Google has also signed a draft deal with Nine Entertainment to use its newspaper, TV and online content on the News Showcase and also struck a deal with niche publisher Junkee Media.

Regulators in the US, UK and EU are watching developments in Australia and could be keen to replicate them as a way of tackling the power of Google and Facebook.

In the UK, the pair now dwarf news media in their dominance of the advertising market, accounting for up to 80% of the £14bn a year spent on digital advertising and up to half of all advertising.

Why Media Bargaining Code is ‘dangerous for the future of the net’

Critics of the deal include journalism professor at City University New York  Jeff Jarvis.

In an article published on his blog he said: “The Code is built on a series of fallacies. First is the idea that Google and Facebook should owe publishers so much as a farthing for linking to their content, sending them audience, giving them marketing. In any rational market, publishers would owe platforms for this free marketing, except that Google at its founding decided not to sell links outside of advertisements. The headlines and snippets the platforms quote are necessary to link to them, and if the publishers don’t want to be included, it is easy for them to opt out…

“The precedent of having to pay for the privilege of linking to someone is antithetical to the core ethic of the web: that the edges finally win over the power at the centre.

“In the United States, where I work, it is only because of the web and its architecture of the link — as well as social media and its hashtags — that we have finally heard the stories of #BlackLivesMatter and #LivingWhileBlack and #MeToo from voices too long excluded from mass media, run by old, white men (who look like me). Finally, the net challenges the old mens’ hegemony.

“No wonder Murdoch does everything he can to cripple the internet and its proprietors, cashing in his political capital — conflict of interest be damned — to buy protectionist legislation to favour his companies against his competitors in hopes of winning in Parliament or blackmailing publishers into paying to stop this political process. That is precisely what both Google and Facebook are doing in beginning to pay publishers for their articles, and I’m unhappy with them, too, for setting a precedent I consider dangerous for the future of the net.”

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