Big tech versus old media: When it comes to Google’s threats to pull search, SMEs are simply caught in the crossfire

The weekend brought a lot of heated bluster from old media (and its political representatives) about Google’s supposed threat to democracy.

In Senate hearings on Friday, Google Australia head Mel Silva confirmed the company would pull its search engine from Australia if the federal government hurried ahead with its mandatory news bargaining code as currently drafted. This confirmed Crikey’s report the week earlier: the code, as is, means no Google search.

It gave Scott Morrison a Howard moment: “We’ll decide who searches Australia and the manner in which they search!” As he huffed: “We don’t respond to threats.” (This will surely be news to anyone who follows the LNP-News Corp relationship.)

Morrison was wrong as a matter of law.

The Australian Parliament is constrained by the Howard-era Australia-US free trade agreement, and the US trade representative last week raised concerns that the code may breach the agreement.

This allowed tech reform campaigners to highlight the demonstration of big tech’s raw power, even at the risk of an ‘enemy of my enemy is my friend’ embrace of News Corp.

Meanwhile, people on social media canvassed alternatives, from not-for-profit search engine DuckDuckGo, to Microsoft’s Bing, to a VPN (virtual private network) to access Google offshore. Australia would no doubt adapt in some way.

On the way through, however, a Google-less Australian internet threatens a crisis for small businesses which rely on a hyper-local market (that is, most of them).

In Australia, as in most of the world, among the most common words at the end of any search are ‘near me’.

A December report (funded by Google) on the search engine’s economic impact on Australia concluded that the company provided $39 billion of value to Australian businesses, 60% of it to small and medium businesses.

As the Mandy Rice-Davies heuristic goes: they would say that, wouldn’t they?

Still, search and social media distribution has inarguably provided greater and cheaper advertising opportunities for small businesses — from keywords in general search to Google’s geographical interfaces Maps and Waze.

As we mourn the loss of local newspapers, Google and Facebook have given these businesses the ability to micro-target new and existing customers.

Thousands of local businesses have shaped their offering and their branding around the opportunities they’re offered.

There will be transition costs if they’re now forced to change (for lesser alternatives) and, coming in the midst of the pandemic, it will tip more than a few businesses over the edge.

This is a reminder that there are no good guys in the big tech versus old media fight. When the elephants butt heads, the ants get trampled.

Here’s the key: the fight is not about whether the big platforms will pay for journalism. That’s agreed. It’s more about how much they pay and what they pay for.

Google is offering to pay for articles that are published in its editorially curated News Showcase which leans towards journalistic quality, small media and sits outside paywalls. That’s the deal it reached with French publishers, most German publishers (other than the Murdoch-lite Springer group) and Reuters.

News Corp (in particular) wants payment for links and snippets in the search results. Algorithmically, this leans towards mass media and outrage clickbait. It would also respect paywalls.

Why does Google care? It says that paying for links shatters its business model which leverages the open web, commercialising all online interactions.

That’s what it (and web creator Tim Berners-Lee in his own Senate submission) mean when it says it “undermines the basic principles of the internet”.

It concludes it will worsen all the tracking and surveillance that the platform advertising duopoly of Google and Facebook has brought to the web.

Why does News Corp care?

Before Christmas, New York-headquartered News Corp CEO Robert Thomson confirmed an earlier Crikey report that it was close to a global deal with Google, to match its late-2019 deal with Facebook. Now that seems to have gone cold and Google is ramping up its opposition.

Perhaps the Google price of cancelling Australia’s mandatory code was too steep. Perhaps Google fears that — especially in the US right now — there’s a reputation risk in reaching a ‘news’-related deal with News Corp.

This article was first published by Crikey.