Google has branded Australia’s push to make the digital giant pay for news as flawed and unworkable.
“The legislation falls far short of a workable code,” Google Australia and New Zealand managing director Mel Silva said in a statement on Saturday, her first public comments on the proposed laws.
Under the changes, both Google and Facebook would be forced to negotiate with major Australian media organisations on how much they pay for news content on their platforms.
The two have been reaping the lion’s share of advertising revenue in recent years, while traditional Australian outlets have shed staff and cut costs to survive.
The government estimates for every $100 spent on advertising, $53 goes to Google, $28 goes to Facebook and $19 goes to other media.
Treasurer Josh Frydenberg says the government would prefer Facebook and Google to negotiate commercial deals with news media companies.
But if such talks fail the parties will be forced into talks – under a “bargaining code” – to settle a figure the digital platforms should pay.
Introduced to parliament last week, the draft laws will go to a parliamentary inquiry before being voted on early next year.
“While the government has made some changes, there are still serious problems that need to be worked through,” Ms Silva said.
“The code tabled in parliament forces Google to pay to link, fundamentally breaking how search engines work and setting the groundwork to unravel the key principles of the open internet people use every day.”
Ms Silva said that was a prospect “neither a search engine nor anyone who enjoys the benefits of the free and open web should accept”.
She said binding arbitration within the code could be “a reasonable backstop so long as the arbitration model was fair” but instead it is “skewed to the interests of one type of business only”, referring to media.
Google says it has already moved to provide a better model with Google News Showcase.
Since October, the behemoth is paying participating publishers to provide paywalled content to users.
“By imposing final-offer arbitration with biased criteria, it encourages publishers to go to arbitration rather than reaching an agreement,” Silva said of the government’s model.
Mr Frydenberg says “the world is watching what happens here in Australia”.
Breaches of the code, such as failure to negotiate in good faith, would be punishable by a fine of $10 million.