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Australian Treasurer Josh Frydenberg has said it is “inevitable” that Google and other tech behemoths will eventually have to pay for media use, in response to the internet giant’s threat to turn off its search engine in the country if forced to pay local publishers for news.
Google said Friday that a proposed law to compensate publishers for the value their stories generate for the company is “unachievable,” opposing the requirement it pays media companies to display snippets of articles in search results.
As Google intensifies a several-month confrontation with the government, Frydenberg said Australia could either be the “world leader” in promoting the code or expect to follow others by adopting similar legislation.
“It seems that the digital giants did a great job last week, when they publicly and openly threatened the Australian public with their effective withdrawal from Australia in search of whether the legislation continues as it is today,” Frydenberg said.
The threat is strongest from Google, as the digital giant is trying to stop a flow of regulatory action worldwide, but such a radical step would give rivals an entire developed market. At least 94% of online searches in Australia go through Alphabet Inc., according to the local competition authority.
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However, Google’s market share puts the company in a position to increase revenue from other companies to offset higher costs.
“Leading the company’s product in search of rivals such as Yahoo, Bing and Microsoft’s DuckDuckGo makes it unlikely that advertisers and publishers will move to competitors’ platforms to drive 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 raising ad prices and reducing traffic acquisition costs paid to mobile network operators.”
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Facebook Inc., the only other company covered by the law, also opposes Australian law. The social media platform reiterated in Friday’s meeting that it intends to block Australians from sharing news on Facebook if the law is promoted.
Frydenberg also accused the tech giants of changing their goalposts when it came to their expression. resistance to the code, after first rejecting a final arbitrage model, to now oppose the idea of paying for any clicks displayed below the search results.
“If clicks for media content represent such a small proportion of the total number of clicks on their search, then, in the end, independent referees will find that they should reflect that payment for content – reflecting the advantage for Google, for Facebook, to have that media content on their sites, “he said.
The legislation is designed to support a local media industry, including Rupert Murdoch’s News Corp., which has struggled to adapt to the digital economy. Google’s tougher stance has rebuked lawmakers at a meeting, Prime Minister Scott Morrison said on Friday that “we are not responding to threats”.
“It’s about control and power,” said Johan Lidberg, an associate professor at Monash University in Melbourne who specializes in media and journalism. “I signal to other regulators that they will fight if they do.”
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“With the assistance of Angus Whitley.”
(Add the analyst’s comment in the seventh paragraph.)