Google Australia-How Should It Respond To Australia`s News Media Law?
| Case Code: BENV043 Case Length: 10 Pages Period: 2015-2021 Pub Date: 2022 Teaching Note: Not Available |
Price: Rs.300 Organization: Google Australia Pty Ltd Industry: Technology & Communications Countries: Australia Themes: Regulatory Environment , Government Policies, International Business,Stakeholder Management |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Scepticism About the Code
Google was the dominant search engine in Australia, controlling 94 percent of the web search market. Analysts were concerned that if Google turned off its search engine in Australia, it would not only hurt consumers trying to find products but also small businesses who used the search platform to promote themselves and their offerings. “Opponents of the code are defending an open internet that ceased to exist years ago, and instead has become dominated by a small number of very, very large US tech companies. In fact, Google and Facebook are the internet for most Australians, or at least the key gateway to it. Google has a monthly audience of 19 million, and Facebook of 17 million. Where people go online is largely determined by these two companies’ algorithms,” said Dan Stinton Managing Director at the Guardian Australia..
Google’s Viewpoint
Google argued that the ‘New Code’ would break the very way Google Search worked. According to Google, the law, once passed, would undermine the benefits of the internet for millions of users in Australia. The company argued that if the law was passed in its current form, it would affect the free and open web for everyone and if the Code in its existing form became law, it would destroy the business model of any search engine as search engines were built on the ability to link users to a website for free. When a user searched for a topic in a search engine, the results showed up as a series of links and brief text that enabled users to decide whether to click and spend their time or transact with those websites or not...
Reaction to Google’s Threat to Stop Services
In response to Google’s threat to pull out of Australia, Prime Minister Scott Morrison (Morrison) said Australia would not respond to “threats”. “Let me be clear. Australia makes our rules for things you can do in Australia. That’s done in our parliament. It’s done by our government. And that’s how things work here in Australia and people who want to work with that, in Australia, you’re very welcome. But we don’t respond to threats,” said Morrison..
Google’s Response
On February 4, 2021, Google and its parent Aphabet’s CEO, Sundar Pichai met Morrison. Commenting on the meeting, Morrison said, “I thought it was a constructive meeting. I have been able to send them the best possible signals that should give them a great encouragement to engage with the process and conclude the arrangements we’d like to see them conclude with the various news media organizations in Australia – and that is the best way to enable that matter to be settled. …..At the end of the day, they understand that Australia sets the rules for how these things operate. And I was very clear about how I saw this playing out.” ..
Road Ahead
On February 25, 2021, Australia passed the New Media law after introducing several last minute changes to the proposed News Media and Digital Platforms Mandatory Bargaining Code. The law would be reviewed by the Treasury within one year of its commencement. “The Code will ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia,” said Treasurer Josh Frydenberg (Frydenberg) and Communications Minister Paul Fletcher (Fletcher) in a joint statement..
Exhibits
Exhibit I: Search Engine Market Share in Australia (April 2021)
Exhibit II: Alphabet Inc. Business Segments
Exhibit III: Alphabet Inc. Revenue by Type
Exhibit IV: Alphabet Inc Revenue by Region (in %)
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