Google has threatened to pull its search engine from Australia. The threat came as Australia’s parliament began pushing through new legislation called the Media Bargaining Code that could change the way Mountain View, California. Google and other tech companies that rely on digital advertising do business. The principle is quite simple. If passed in its current form, it will require Facebook and Google to pay Australian news companies for content linked to or featured on their platforms.
Power imbalances of digital platforms
This isn’t the first such attempt to regulate how content is used by the two companies – there have been similar cases in Europe. In this case, it dates back to last April when the Australian government asked the Australian Consumer and Competition Commission (the ACCC) to develop a mandatory code of conduct to address bargaining power imbalances between Australian news media companies and digital platforms, particularly Google and Facebook.
A code project for public comment and a series of questions and answers (Q&As) on the draft code were published shortly thereafter. Following this, the Australian Government incorporated the recommendations made by the ACCC and other interested parties into legislation which was finally presented to Parliament in a Bill early on 9 December.
Microsoft supports news trading code
Google’s response was predictable. Last month, the search giant threatened to pull its search engine from Australia.
Microsoft’s response was almost as predictable. Microsoft CEO Satya Nadella has previously extolled the virtues of his Bing search engine and assured Australian lawmakers that it is a solid alternative to Google. A statement from Nadella and Brad Smith, Microsoft’s chief legal officer and company president, said they even went so far as support the bill:
“Microsoft fully supports the News Media Negotiation Code. The code reasonably attempts to address the imbalance of bargaining power between digital platforms and Australian news companies,” the statement read. “It also recognizes the important role that search plays, not just for consumers, but also for the thousands of Australian small businesses who rely on search and advertising technology to fund and support their organisations.”
Additionally, the statement adds, the company will invest more to ensure that Bing is comparable to our competitors. It will also allow Australian businesses to transfer their advertising to Bing. “Microsoft will ensure that small businesses that want to transfer their advertising to Bing can do so simply and without transfer costs. We recognize the important role that search advertising plays for over two million small businesses in Australia,” he added.
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Bing’s Unforeseen Opportunity
And therein lies the crux of the problem. If Google decides to pull its search engine out of Australia, Microsoft will become Australia’s largest search engine and reap all the benefits that this brings.
Microsoft’s Bing could definitely use a little help catching up in Australia. According to StatCounter Google currently dominates the search engine market in the country with 94.5% share, Bing at 3.6% and DuckGoGo at 0.87%. Google also leads the browser space as well as the operating system space with Android 41.28% and Windows 31.6%. Psychologically, Australia is dominated by Google and unless Google pulls out of the market it is likely to remain so for the foreseeable future.
Dave Nilsson is the founder and director of the British company Converted click, a digital marketing agency. He says it wouldn’t be too difficult for Bing to replace Google if it pulled out because, he said, it’s easier and much more flexible than Google. He thinks Bing is much better at finding images and videos. It also believes that the clarity, sharpness and quality of the images are much better than what you see on Google search and it also allows users to search for images in multiple formats such as wide, tall and square.
Likewise, says Nilsson, Bing’s video search is far superior to Google’s. It has a grid interface with video thumbnails and the best thing is that you can play the videos without browsing Youtube. “I think Bing can surely capitalize on these features to build a large user base, whether Google comes out or not,” he said.
Bing’s SERPs (Search Engine Results Page) also have less competition. “As a digital marketing expert, I recognize the importance of search engine rankings for online visibility and growth. Businesses can capitalize on the opportunity to establish a dominant presence in a less competitive environment. Bing SEO could be the next big thing in Australia,” he added.
There are also other problems. Bing uses exact match domains to display search results. It’s not the same for Google. Social media signals also play a major role in Bing’s algorithm. So, if your content is very popular on social media, it will rank higher in search results. With the increasing use of social media, this will be very relevant.
Disruption of Google’s business model
This is not the first time that Google has taken on a national government to protect its business model. In Europe, Google was forced to conclude an agreement with a group of French publishers last month agree to a framework that will allow the search giant to negotiate individual license agreements. Indeed, according to some information, Google has already negotiated a few individual payment agreements with certain French press publishers such as the daily newspaper Le Monde and the magazine Obs.
Last week, in an interview with CNBC, the ACCL chief said that Australia doesn’t want to see Google leave, but if the tech company decides to leave the country because it’s unable to reach an agreement with the government, she has to be “their call”.
In a statement in late January on the findings of its interim report – the precursor to the preliminary report to be released later this year, the ACCL noted that competition and transparency in the advertising technology supply chain digital have an impact on publishers, advertisers and consumers. and must be addressed.
The report examined Australia’s digital display advertising market, which enabled near-instantaneous delivery of $3.4 billion in digital display advertising opportunities on news, entertainment and other websites and applications each year.
“There is a real lack of competition, choice and transparency in this industry. These issues increase the cost of advertising for businesses, which will ultimately impact the prices consumers pay,” ACCC Chairman Rod Sims said in the statement.
The report also noted that while there are many ad technology providers in Australia, Google is by far the largest provider of all the major ad technology services examined by the report and is the only provider in the ad technology chain. full supply of ad technology that also sells ad inventory. . The ACCC estimates that Google’s share of revenue or ads exchanged in each of the required services in Australia ranges from 50%-60% to 90%-100%, depending on the service.
Google is open to compromise
For its part, Google, in an open letter to Australians says that the ability to link freely between websites is fundamental to web search. She pointed out that the code creates unreasonable and unmanageable financial and operational risk for her business. “The Code was originally designed to support the financial future of publishers, an important goal that we are committed to supporting. But the way it’s trying to do that would disrupt how Google Search works,” Mel Silva, managing director of Google Australia, explained in the letter.
She added: “The Code’s rules would dismantle a free and open service that was designed to serve everyone and replace it with a service where links come at a price and where the government gives a handful of news companies a advantage over everyone.”
It is unclear how this will end, but it seems reasonable to assume that a compromise position will be reached in the coming months in the same way that a compromise was reached in Europe. But if not, what then? It’s impossible to say, but it seems likely that everyone will lose.