Google Sees Deal Within Reach on World-First Law to Pay for News

(Bloomberg) --

Google said it's within reach of negotiating a compromise on legislation that would force it to pay for Australian news, as the U.S. giant continues a public campaign to get the proposed law watered down.

The Australian government has drafted a world-first code to make Google and Facebook Inc. compensate publishers for the value their stories generate for the platforms. The law is designed to support a local media industry, including Rupert Murdoch's News Corp., that has struggled to adapt to the digital economy.

Google argues the proposed law doesn't reflect the value that the platforms themselves provide by redirecting readers to news websites. The U.S. company, owned by Alphabet Inc., said Tuesday that discussions with Australian authorities to get certain elements of the draft code changed in its favor look set to succeed.

Google isn't asking for the code to be scrapped, “we're asking for it to be fair,” Mel Silva, managing director for Australia and New Zealand, said in an interview. “We really do think we can get there.”

Facebook Threat

The proposed legislation has made Australia a test case as watchdogs worldwide attempt to rein in the vast advertising power of the digital giants. Google's push for a negotiated compromise contrasts with the response from Facebook, which has threatened to block Australians from sharing any news on its sites if the law is passed, an unprecedented step.

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Silva declined to say what actions Google might take if its campaign fails. “We're going to continue to engage” with Australia's antitrust watchdog “and do everything possible to make this a workable code,” she said.

A representative for the Australian Competition & Consumer Commission declined to comment.

ACCC Chairman Rod Sims this month flagged changes to the code in light of Google's opposition. He said the ACCC was “engaging strongly” with Google and Facebook, and was “thinking through” the value that publishers and platforms exchange with one another. “The code will change,” Sims said. “It's a draft.”

Silva said the Australian code, in its current form, will compromise popular Google services like Search and YouTube and isn't acceptable.

Google wants the proposed law changed in three main areas: Negotiations should take into account the value both sides bring to the table; Google shouldn't have to share any data beyond what publishers are already entitled to see; and requirements for platforms to share algorithm changes with publishers should be less onerous.

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