Google has issued a firm warning to New Zealand, indicating that it may sever ties with local news outlets if the government proceeds with the proposed Fair Digital News Bargaining Bill. This legislation aims to require tech companies, like Google and Meta, to compensate publishers for their content, a move that has been met with significant resistance from Google. The New Zealand Herald reported on Google’s threats, stating that the company would consider removing links to New Zealand news content and terminating existing agreements with local publishers if the bill becomes law.
Caroline Rainsford, Google’s country director in New Zealand, has publicly voiced her concerns, characterizing the proposed bill as a “link tax.” According to Rainsford, this would compel Google to pay for merely linking to news articles, which she argues would necessitate drastic changes to the company’s products and investments in news content. She mentioned that such changes would include the potential discontinuation of linking to news on Google Search, Google News, and Discover services in New Zealand. Additionally, the firm would cease its existing commercial agreements with local news publishers, leading to potential ramifications for the media landscape in the country.
In response to Google’s threats, the news media industry has pushed back, contending that the tech giant is misrepresenting the legislation and engaging in what the News Publishers Association has labeled “corporate bullying.” Andrew Holden, public affairs director for the association, asserted that the bill is not a tax but a means to ensure equitable commercial negotiations between tech companies and media outlets. Including references to significant legal battles that Google has faced in the United States, Holden reaffirmed that no company is above the law and underscored the need for the New Zealand government to develop regulations that bolster democracy without succumbing to corporate pressure.
Opposition to the bill is not unanimous, though. Act leader David Seymour has criticized the government for taking a confrontational stance against Google, stating that New Zealanders could ultimately bear the consequences if the search engine follows through with its warnings. He particularly highlighted the potential negative impact on smaller media outlets, which may struggle to reach broader audiences without Google’s linkage to their content.
Financial data illustrates Google’s significant operations in New Zealand, where the company reportedly paid close to $1 billion in inter-company service fees for the year ending December 31, 2023. This figure underscores the scale of Google’s business within the country and reinforces the implications of its threats to cut ties with local media. The tech giant’s extensive economic footprint raises questions about the balance of power between large tech entities and local news organizations in such negotiations.
In other jurisdictions, like Canada, Google has managed to negotiate exemptions from similar legislation after agreeing to a financial arrangement that involves annual payments to be shared among news media companies. It is likely that Google seeks a similar arrangement in New Zealand, one that allows for a ministerial administration of a funding pool for journalism. However, the media industry remains skeptical, fearing that any such arrangements would not equate to what they perceive to be fair remuneration, voicing concerns that Google should not be able to bypass legislative efforts aimed at ensuring equitable compensation for news content.