I’ve been watching the developments with the News Media Bargaining Code back home with interest and thought I’d share my personal take here. (And to be up front, I currently work at Google, an Aussie currently living in the USA.)

A real challenge seems to be the profitability of news for revenue generation. I say this sadly as independent news services are of great value to the community, but the old model of a newspaper making money from services such as classified ads continues to diminish. With the internet, now shoppers look for products on websites such as ebay or carsales.com.au. This challenge to the News industry has resulted in programs such as the Google News Initiative and Subscribe with Google to help the News industry adapt to the digital world.

While I think supporting the future of news is really important, I think the proposed law misses this point. Google does not make money from news, it makes money from ads unrelated to news. (E.g. Google does not show ads in its news services.) News services have not lost classifieds income due to Google (Google sends them free traffic!), they have lost it to other websites and business models.

There are other problems with the law. I have a history in search in Australia, at ebay, and now at Google. Last year, Google launched 3,620 algorithm updates. Changes typically involve A/B testing. And guess what – you do the A/B test because you don’t know how well it’s going to work. The law as written says any change with substantial impact has to be announced 28 days in advance, so an A/B test that works, without 28 days notice before the test is launched, could actually be breaking the law. It is fundamental to the business model of how popular online services work and the proposed law just ignores it. 

The end result of not being able to do A/B testing and making frequent releases is the quality of services degrades. (It also creates problems such as code forking just for Australia.)

I understand the intent of the law is to protect news. That intent I agree with. I just think the proposed law is neither workable nor is solving the real underlying problem.

Additional reading: Stratechery, Wired, and of course try searching on Google for related News! 😉

Added October 1st, 2020: New blog on Google’s commitment and investment in News.