Google rejects levy on aggregators to help pay for Australian journalism

Google Australia has rejected the idea of a levy on aggregators to prop up Australian journalism, telling a parliamentary inquiry it hasn’t worked elsewhere in the world.

The managing director of Google Australia, Jason Pellegrino, said the global search company would abide by Australian laws but a proposed levy was not a solution to the collapse of the business model for quality journalism.

“The setting of rules is the job of government,” Pellegrino said at a Sydney hearing on Tuesday. “We don’t believe that handouts, regulations and intervention is the answer. The government is currently investing in public interest journalism through their investment in ABC and SBS.”

The select committee on the future of public interest journalism is examining the impact of search engines and social media aggregators on the Australian media.

The committee heard that 3,000 jobs in Australian journalism have been lost in the past five years, from News Corp, Fairfax Media and the ABC among others.

The committee has already heard from the Fairfax chief executive, Greg Hywood, who blamed the ABC for using taxpayer dollars to steal its audience, as well as the Institute of Public Affairs, which called on Monday for the privatisation of the ABC.

Pellegrino said Google had observed globally that content levies did not affect the underlying challenges faced by media companies. “The challenge is shifting consumer behaviour,” he said.

Pellegrino faced hostile questioning from Senator Nick Xenophon over how much advertising revenue Google was earning in Australia. The Interactive Advertising Bureau has estimated that Google is earning $3bn a year in Australian revenue, much of which is money that used to go to publishers to fund journalism.

“I hate being misled,” Xenophon said to Pellegrino after he said Google earned only $1.1bn last year in Australia. “And when you say Google has $1.1bn in revenue here in Australia is that your evidence? Does it include the revenue that goes through other countries?”

Pellegrino said $1.1bn was the figure in the Google annual report and he wouldn’t speculate on other higher figures.

“This inquiry is about public interest journalism and the impact of social media platforms have had,” Xenophon said. “We’ve lost a quarter of journalists in this country in the last five years because of these platforms … taking an enormous amount of revenue.

“I’ve read from various reports from the advertising industry that Google takes in about $3bn of advertising revenue from Australian businesses advertising to Australian consumers. Have you seen reports to that effect?”

Pellegrino said he had seen those reports but he denied that Google’s business model was having a profound impact on traditional media.

“Respectfully, I would have to disagree that that specific issue is the only effect on organisations. We are dealing with a complex set of issues.”

The amount of revenue Google and Facebook were making from Australian advertising and a possible Google tax were not the only issues that had sparks flying between senators and executives at the Sydney inquiry.

The spread of fake news and what Google and Facebook were doing about it was another source of contention.

Facebook Australia’s head of policy, Mia Garlick, said Facebook was tackling fake news by removing accounts that exhibit suspicious behaviour rather than because of the nature of their content.

She said tools were being developed all the time to combat fake news but it was still largely up users to report fake news, suspicious content or hate speech.

Garlick also said Facebook was not a media organisation and did not employ journalists but that publishers used the platform to disseminate news.

She said $1m was paid out to publishers every day but conceded that it amounted to just $100 per publisher per day when challenged by the committee.

On Monday the Institute of Public Affairs said the ABC was an extremely bureaucratic organisation that should be privatised.

“An 85 year-old $1bn government-owned television and radio network is not the ideal vehicle for journalism in a digital age,” said Chris Berg, a senior fellow with the Institute of Public Affairs.