Chris Janz, Nine Entertainment's managing director of publishing, made a statement to today's Senate inquiry into the bargaining code designed to make Google and Facebook pay publishers for news:
The full text:
Thank you Mr Chairman and Senators.
Over the past two decades, Google and Facebook have built businesses of almost unimaginable scale and dominance.
Together they are valued at more than the entire Australian Stock Exchange. They hold effective monopolies in search and social media. They are the gatekeepers to the broader internet.
And they collect 81c in every digital advertising dollar.
Their market credibility, business models and substantial valuations have been built on having free and unfettered access to quality journalism and content. Content that is created and funded by others.
And their market might is only growing. Just 19c in every ad dollar is left for media organisations that invest in journalism that is vital for our democracy. Without strong regulatory intervention, the sustainability of a diverse local media sector is at risk and our society could be beholden to decisions made by two men in Menlo Park and Mountain View.
Just last week Google decided to remove local news from the search results it presents to some Australians. It did so without giving any notice to the people affected.
The impact of this decision was instant and disturbing. Instead of receiving critical updates from the ABC, 9News, The Age, The Sydney Morning Herald or The Australian some people searching for "coronavirus NSW" received just a single news story at the top of their results - a three-week-old update from Al-Jazeera.
Searches for "Sydney news" deprioritised crucial, accurate coverage about the public health emergency - instead the most prominent story Google served up was about "exciting things to do".
This was followed by a report about the sale of an abandoned driveway and links to videos on YouTube. YouTube, of course, is owned by Google.
Google’s ability to execute this so-called experiment demonstrates a truth at the core of the digital media ecosystem: you either play by their rules or not at all.
For media organisations this means having to accept your content appearing on Google's platforms. This provides Google with significant commercial returns without paying a single cent for the creation of that journalism. If you don’t play ball, Google has shown they are not afraid to effectively make you disappear from the internet.
For the broader community, it shows in very stark terms that Google controls the information people access and can manipulate this information according to its own
commercial objectives. Given their effective monopoly in search, Australians too have little choice but to accept whatever Google decides.
Google claims to be open to paying for news by pointing to their Showcase product - a product that was recently announced but is yet to launch.
Showcase is exactly what you would expect from a monopoly. It works at a price set by Google based on an opaque global formula. The take-it-or-leave-it terms are set by Google. And it doesn’t address the bargaining power imbalance of Google's core search product identified by the ACCC.
This legislation is a good first step in addressing that significant bargaining imbalance recognised by the ACCC's groundbreaking Digital Platforms Inquiry.
Australians deserve continued access to accurate, informed local news on the internet. Without this legislation, digital platforms will continue to refuse to pay for the content they’ve used to secure their monopolies or live up to the responsibilities that come with such significant market power.
Nine strongly supports regulatory intervention and wishes to thank the ACCC, the Government, the Parliament and this committee for their recognition of the serious issues at stake.
We are of course happy to answer any questions
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