Google has published the results of an experiment it conducted to gauge the impact that news content had on its traffic and ad revenue.
The public experiment measured the value that content by removing European news content for 1% of users in eight countries in the EU: Belgium, Croatia, Denmark, Greece, Italy, the Netherlands, Poland and Spain.
The study concluded that European news content in Search “has no measurable impact on ad revenue for Google.”
It said that when it removed news content, there was no change to Search ad revenue and a <1% (0.8%) drop in usage, which indicates that any lost usage was from queries that generated minimal or no revenue.
“Beyond this, the study found that combined ad revenue across Google properties, including our ad network, also remained flat,” said Paul Liu Director, Economics at Google.
Google (Image: Sourced from Unsplash)
Li indicated that the study was a result of the company’s negotiations to comply with the European Copyright Directive (EUCD), and what it termed as “a number of inaccurate reports that vastly overestimate the value of news content to Google.” Under European copyright laws, the company must pay publishers for using content from their articles.
While the study addresses the impact of news content in the EU, it is also significant to Australia where major tech companies including Meta and Google entered into commercial agreements with media publishers under the country’s earlier News Media Bargaining Code which was introduced in 2021 to incentivise digital platforms to enter into commercial deals with news publishers. However, it allowed platforms to avoid their obligations by removing news.
In December, the government proposed to establish a News Bargaining Incentive to encourage digital platforms to enter into or renew commercial deals with news publishers.
The Australian government says that the new bargaining incentive will apply to large digital platforms “operating significant social media or search services irrespective of whether or not they carry news” and will include a charge and an offset mechanism. Platforms that choose not to enter or renew commercial agreements with news publishers will pay the charge. Platforms with these agreements will, however, be able to offset their liability.
However, many of the biggest tech companies including Meta, Google, X and Apple have now formally lobbied the Trump administration to get involved with they say is a “coercive and discriminatory tax that requires US technology companies to subsidize Australian media companies.”
These companies are members of the Computer and Communications Industry Association (CCIA) which has now made its submission to a request by the Office of the United States Trade Representative as part of the White House’s review of US trade policy.
Trade policy manager of the CCIA, Amir Nasr, has taken aim at the recently proposed News Bargaining Incentive. “Australia’s extraction and redistribution of revenue from US digital suppliers to local news businesses is reported to have cost US firms $140 million annually,” said Nasr.
“Currently, the two companies targeted by the law pay A$250 million annually through deals that were coerced through the threat of this law. However, with the threat of the new ‘incentive’ tax from the Australian government (rate yet to be determined), this cost is likely to significantly increase.”
