Alphabet Inc (NASDAQ:GOOGL) subsidiary Google has turned down the request by Australian lawmakers to pay roughly AU$600 million annually to local publishers for their content showing up on the news section and search in its search engine.
Google turned down the request and even explained how its search engine works. The company acknowledged that news does provide social value, but it also called out Australia for the wrong claims regarding the economics of how it works. The company pointed out that the request for pay assumes that it is roughly 10 percent of the revenue that Google generates in Australia thanks to the news. The company claims that the assumption is wrong.
“The ‘indirect value’ argument also overestimates the relevance of a small fraction of hard-to-monetize queries,” Google pointed out.
Google went ahead to state that it generates revenue from ads and does not include ads in the search or news tabs. Australia requested that companies like Google should pay publishers for the news content that appears in search, allowing Google to generate revenue. The push comes in the wake of increasing concerns regarding the declining revenues that Australian publishers have been experiencing courtesy of the digital shift.
Australia aimed to use the request similar to what other countries have been aiming to do. For example, some countries in Europe want Google to pay so that they can pay for licenses to show the content on its search engine.
Google also presented the argument that it provides huge benefits to news websites because it provides a platform on which their content is showcased and made visible to readers. The company also noted that most of the searches come from across the globe and that Google makes it free for publishers to participate in the Google search engine.
Google also noted that it has been cooperating with the Australian Competition and Consumer Commission on creating a mandatory code that is due for next month. There is a chance that it might result in a collective licensing deal that will benefit media companies.