Google threatens to stop linking to NZ news sites if bill passes

Google has warned it will be forced to stop promoting New Zealand news content and stop deals with local newsrooms if the government goes ahead with the Fair Digital News Bargaining Bill.

The bill, which was introduced by the Labour government, would force tech giants to pay news organisations for their content.

National initially did not support the bill but the coalition is pushing ahead with it.

A statement posted today by Google's New Zealand Country Director Caroline Rainsford said the company was "concerned" by the bill and did not believe it was the right approach to foster a sustainable future for news.

"This bill proposes a 'link tax' that would require Google to pay simply for linking to news articles. While Google supports efforts to foster a sustainable future for New Zealand news, this bill is not the right approach."

Google said it had been transparent with the government that if the bill were to proceed Google would make significant changes to its products and news investments.

"Specifically, we'd be forced to stop linking to news content on Google Search, Google News, or Discover surfaces in New Zealand and discontinue our current commercial agreements and ecosystem support with New Zealand news publishers."

It said it would also discontinue its commercial agreements with New Zealand news publishers.

"These are not outcomes we want for New Zealanders, news publishers, or our business.

"We believe there is a sensible path forward and have proposed reasonable alternatives to the government that do not harm smaller, local or regional publishers and maintain the principles of the open web, in line with recent agreements we've reached elsewhere."

It had engaged with New Zealand publishers and lawmakers, the statement said, and "have proposed reasonable and balanced alternatives to the draft bill."

"Further strengthening New Zealand's news industry will require additional public and private support from both the New Zealand Government and a broad base of private companies."

Google said it was proud of its "long standing contribution to New Zealand's news industry."

"Our services help connect New Zealanders with quality journalism every day, driving valuable traffic to publishers."

Through local partnerships and investments, Google said "we continue to contribute to a sustainable, diverse and innovative news ecosystem in New Zealand, including through Google News Showcase - a licensing program that covers over 95 percent of New Zealand digital news publishers and results in us paying millions of dollars per year to almost 50 local publications."

Its main concerns:

• Ineffective and Against the Open Web: Link taxes are in conflict with the principles of the open web, and have not proven effective in supporting journalism, as seen in similar situations where other platforms have disengaged after deciding it's no longer feasible to carry news links, including in Australia and Canada. The Ministry for Culture and Heritage commissioned an independent report from Sapere that concluded "There is no plurality justification to require digital platforms to pay news firms for linking to news content."
• Harmful to Smaller Publishers: Solutions that overwhelmingly benefit a small number of large operators at the expense of small and local language publishers are neither sustainable nor desirable outcomes for New Zealand.
• Business Uncertainty: The uncapped financial exposure, an opaque political process for exemption and lack of clarity in the current bill create an untenable level of business uncertainty for any company. This makes it impossible to plan and invest effectively in New Zealand.

When asked how much revenue might be gained by making big tech companies pay, Media and Communications Minster Paul Goldsmith told RNZ in July that depended on negotiations.

"There was talk of around $30 million possibly being at stake around the Google agreement, there's possibly $6 million or so to be made out of the extra advertising revenue but it comes down to how the negotiations go."

In response to Google, Goldsmith said in a statement there were a range of views throughout the sector he was considering.

"We are still in the consultation phase and will make announcements in due course."

He said he and his officials had "met with Google on a number of occasions to discuss their concerns" and would continue to do so.

ACT Party opposed

The ACT party is opposed to the bill, and has invoked the "agree to disagree" clause from the coalition agreement in order to vote against it.

Responding to Google, ACT leader David Seymour said in a statement the government was playing "chicken" with the tech giant, and "New Zealanders stand to lose."

"ACT has always said this Labour Government Bill wouldn't work, that's why we agreed to disagree with our partners on it.

Seymour is renewing his call on National and New Zealand First to dump the bill.

"If Google make good on their threat, New Zealand audiences and media companies will be worse off. Smaller media outlets in particular would suffer as they would be denied the opportunity to connect with new audiences via search results."

Seymour said it was not any government's job to protect business from customers making different choices.

"The internet has made it easier than ever to report news, and certain outlets need to stop blaming the internet and start looking at their product."

"It is not accurate to describe the bill as any kind of 'bargaining'. Instead, politicians would decide who gets what," Seymour added, which "undermines the separation between government and media", "which is fundamental to democracy".