With over 91% market share Google Search has been leveraging on the monopoly it has created, for long. Despite all the criticism and requests raised by the content publishers – the license owners of the content Google Search completely depends on – Google has given deaf ears and continue to pocket each and every ad marketing dollar it generates from the Search Result Page which consists the list of snippets of content scrapped from the publishers’ website.
But looks like the noose is tightening as publishers in many countries are pursuing to file a lawsuit against Google and seeking the revenue share for using their content in the search result pages. Surprisingly, Google is losing the legal battle and may soon resort to crack a deal with publishers individually to avoid getting directives from the government itself.
However, Google is running out of luck as the government in many countries have found the publishers’ concerns worth noticing. And this could just be the tip of the iceberg that Google Search may hit soon.
After the French Government, now it is the Australian Government which is going after the tech giants Google and Facebook to make them pay for online news content.
And, this leads us to a question:
- Is this is the beginning of the end of free Google Search?
- If not, how hard this could hit Google financially?
The ACCC aka Australian Competition and Consumer Commission has now been tasked with framing the code of regulations which will govern the relationship between digital platforms and news publishers when it comes to sharing revenue. This was mentioned by Treasurer Josh Frydenberg of Australia.
Google is able to monetise almost every single search query because of ads running on the search result page. On the other hand, news publishers start generating revenue only when Google search visitors land on their websites.
This isn’t the first time this entire issue of fair compensation for the reuse and indirect monetization of others’ editorial content has come up. If anything, it has only been dialled up a notch since earlier this month.
It could be mainly because of the fact that the COVID-19 outbreak has now led to major media companies looking at a huge revenue crunch.
Therefore, these publishers are now increasingly pushing policymakers to bring Google and Facebook under the entire ‘fair competition’ framework so they can get a bigger chunk of the ad revenue these tech giants make.
France’s competition watchdog Autorite de la Concurrence, earlier this month asked Google to start negotiation with local media companies in good faith about reusing their content. To this, Google replied that they were committed to working together with them to find a solution.
However, coming back to Australia’s decision, the tech search giant continues to argue about the fact that they add a lot of value to news publishers by directing free traffic to their websites wherein these publishers are allowed to make money via ads or other subscription-based charges.
Google in 2018 alone was solely responsible to send more than 2 billion clicks to Australian news publishers via their platform.
The search tech giant has also pointed out that news publishers can well choose to opt-out of making their content appear in the Google search results altogether.
On this, Treasurer Josh Frydenberg published an opinion article in The Australian Friday which states that they have found almost 98% of online searches on mobile devices in Australia being conducted on Google alone.
He also happened to mention that it was found Facebook had a whopping 17 million local users which are a lot if compared to the entire population of Australia which is around 25 million.
This makes it clear as daylight that news publishers cannot afford to opt-out of using Google’s search platform owing to the dominance they heavily exercise. The same applies to Facebook’s platform as well.
Frydenberg’s article further says “For every $100 spent by advertisers in Australia on online advertising, excluding classifieds, $47 goes to Google, $24 to Facebook and $29 to other participants” noting that the local online ad market is worth around $9 billion per year — growing more than 8x since 2005.
When reached out to the social media giant for a comment related to the Australia Government’s recent move, Facebook said they were heavily disappointed.
They pointed out how to help and benefit the news organisations globally they set up a new investment during this outbreak along with investing millions of dollars to support Australia’s publishers via content arrangements, partnerships and more.
Google Free Search: The Party Is Over?
With the Australian Government now pushing for the same kind of arrangements that the French Government earlier this month sought out, it could well be the end of the free search for Google very soon.
If enough countries now begin to follow suit and start asking Google, which exercises a lot of dominance over the entire internet search space, to pay for news content then they would have no choice other than to comply. And this may just not be restricted to news content alone. As Google search result page completely survives on the content scraped from various websites, publishers of those websites may also start pushing Google for the revenue sharing arrangement.
Most news Publishers are now completely convinced that Google isn’t being fair. They want Google to set up a level playing field as the Google search result page shows only snippets of news and articles publishers on various websites. Hence, any revenue generated from the search result page must be shared with the news publishers as well.
In the fiscal year 2019, Google made $98.11 billion in revenue from Google search and other advertisements alone which is in stark contrast to the $21.54 billion it made from Google Network Members’ properties advertisements – the amount being shared with publishers.
However, if Google agrees to comply in Australia and France, then that will attract the eyeballs of publishers in other countries as well. Those publishers will not leave any stone unturned, including involving the government, to have a similar arrangement for their niche as well.
Now in such a scenario, Google can’t ask everyone who seeks for the entire ‘fair pay’ arrangement to opt-out of their search facility. If Google did so, that would lead to a big media blackout throughout their search engine which will ultimately end up harming their revenues itself.
Undoubtedly, it’s little too early to be conclusive. It will be interesting to observe on whose favour will the scales tip over to – will it be the publishers or the tech giants.
Update 1 – 31 July 2020: Today Australia’s Competition and Consumer Commission (ACCC) has published details of a first daft of the bill which is intended to address “acute bargaining power imbalances” between local news businesses vs the adtech duopoly, Google and Facebook. With the release of of the first draft it’s now quite apparent that Autralia government is quite committed to the benefits and existence of local news outlets in the country.