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New rule threatens free Google search and YouTube in Australia

Image source: Google

This article was originally published on All figures quoted in US dollars unless otherwise stated.

Alphabet's (NASDAQ: GOOGL) (NASDAQ: GOOG) Google published an open letter to Australians on Monday, warning that a proposed new law in the country – which would require the company to pay for news content that appears via its search – could derail the free search and YouTube video services Google offers in Australia.

The search leader has also suspended a licensing agreement it had reached with Australian publishers earlier this year that paid select news publishers for access to their content. 

"We need to let you know about new Government regulation that will hurt how Australians use Google Search and YouTube," the company said in an open letter to Aussies that was signed by Mel Silva, Google's managing director in the country. 

The letter went on to say that the proposed law, the News Media Bargaining Code, "would force [Google] to give an unfair advantage to one group of businesses – news media businesses – over everyone else who has a website, YouTube channel or small business."

As a result of the proposal, Google said it could no longer guarantee its free search and YouTube services in Australia.

Google also went on the offensive, publishing a blog to its YouTube creators and artists in the country, saying that it would be forced to "give large news publishers confidential information" that would give them an advantage in terms of search rankings on YouTube, meaning content creators would receive fewer views and therefore earn less money. 

Not only would the new legislation create an "uneven playing field" but would also grant the big news organisations access to viewer data.

Australian regulators hit back, with the Australian Competition and Consumer Commission saying Google's characterisation "contains misinformation" about the proposed law. 

This article was originally published on All figures quoted in US dollars unless otherwise stated.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Danny Vena owns shares of Alphabet (A shares). The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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