The strong results for Google come as the competition watchdog prepares to create a mandatory code of conduct that would govern the commercial relationships between internet platforms and media companies. The code is likely to result in Google and Facebook being forced by the Australian Competition and Consumer Commission to pay publishers including Rupert Murdoch’s News Corp, and Nine Entertainment Co, the publisher of this masthead.
News Corp Australia executive chairman Michael Miller seized on the Google financial accounts, and calls from Nine chairman Peter Costello for Google and Facebook to pay $600 million to publishers, to demand the ACCC take action.
“I am aligned with Mr Costello’s strong call that the tech companies must pay for the news content they take and profit from,” he said in a statement. “Our modelling suggests the figure is much higher than $600m and former senator Nick Xenephon, whose advocacy sparked the ACCC inquiry into the platforms, has nominated $1 billion.”
Sources previously told The Sydney Morning Herald and The Age that News Corp Australia wants publishers to be able to individually strike payment deals with the digital giants. The ACCC code of conduct would instead serve as a backstop if they refuse to negotiate.
But Google Australia boss Melanie Silva has publicly rejected claims the technology giant should directly pay publishers.
Google last year agreed to pay the Australian Tax Office $481.5 million for taxes it should have paid in the decade between 2008 and 2018.
“In the 2019 calendar year Google Australia made a pre-tax profit of AU$134 million resulting in AU$59 million of corporate income taxes payable, and invested almost AU$1 billion in our Australian operation,” a Google spokeswoman said.
Google’s growing business in Australia comes despite a shrinking overall advertising market. Standard Media Index data, which tracks the spending of most of the advertising market reported a 5.3 per cent decline in advertising revenue to $6.8 billion last calendar year.
Google as well as Facebook and local media companies are currently in consultations with the ACCC over the code. The deadline for submissions is June 5.