Google has published the results of an experiment designed to assess the impact of news content on traffic and ad revenue, reports Channelnews. The study removed European news content for 1% of users in eight EU countries: Belgium, Croatia, Denmark, Greece, Italy, the Netherlands, Poland and Spain.

The results show that European news content on the search engine has no discernible impact on Google's advertising revenue. After removing news articles, there was no change in Search advertising revenue, and the drop in usage was less than 1% (0.8%), pointing to the fact that any lost usage came from queries that generated minimal or no revenue.

"The study also found that combined ad revenue across Google's various platforms, including the ad network, also experienced no change," said Paul Liu, director of Economics at Google. Li explained that the study was the result of the company's negotiations on the European Copyright Directive (EUCD) and what it perceived as "a number of inaccurate claims that significantly overstate the value of news content to Google". Under European copyright rules, the company must pay publishers for using content from their material.

Although the research focuses on news content in the EU, it also has relevance for Australia, where major tech companies such as Meta and Google have signed commercial agreements with media publishers, building on the country's earlier News Media Contracting Code. This code, introduced in 2021, aims to encourage digital platforms to strike deals with news publishers. It allowed platforms to avoid their obligations by removing news.

In December, the Australian government proposed the creation of a news contracting incentive to encourage platforms to enter into or renew commercial contracts with news publishers. This new incentive would apply to major digital platforms "that provide significant social media or search services, whether or not they offer news", and would include a fee and compensation mechanism. Platforms that refuse to enter into or renew commercial agreements with news publishers will pay a corresponding fee. However, platforms with such agreements will be able to offset their obligations.

However, many leading tech companies, including Meta, Google, X and Apple, have already formally lobbied the Trump administration to intervene in what they say is an "unfair and discriminatory tax forcing US tech giants to subsidise Australian media companies". These companies are members of the Computer and Communications Industry Association (CCIA), which recently submitted its submission to the Office of the US Trade Representative as part of the White House's review of US trade policy.

CCIA's head of trade policy, Amir Nasr, strongly criticized the recently proposed incentives negotiating news. "The redistribution of revenue from US digital technology providers to domestic news enterprises has reportedly cost US companies $140 million a year," Nasr said. "Currently, the two companies affected by the law are paying A$250 million a year through deals that have been forced with the threat of this law. Now, with the new threat of an 'incentive' tax from the Australian government (the rate has not yet been set), these costs are likely to rise significantly." | BGNES