Griffin on Tech: Google’s brinksmanship, Govt’s tech progress a year on
Google has long been known to have a more collegial relationship with our country’s news outlets than Meta, which signalled its intention last year to withdraw from news initiatives worldwide.
But Google has mounted belated and particularly aggressive opposition to the Fair Digital News Bargaining Bill which is going through Parliament with bipartisan support and which would require Google and Facebook to strike commercial deals with publishers to feature news content on their platforms.
Meta has already said that it will pull the plug on featuring links to news stories on its social platform. Now Google is threatening to not only remove news content from its search engine, Google News and its Discover service, but also end its support of news-related initiatives in New Zealand.
As The Spinoff’s founder and media writer Duncan Greive writes today: “I don't think people are really clocking how dangerous this game is”.
News outlets get a significant amount of traffic from both Google and Facebook. But no one really knows what would happen if news story links were removed from those platforms. The only evidence to go on is Stuff’s move to stop posting stories on Facebook. It didn’t dent the site’s web traffic. The absence of Stuff stories in Google search results is likely to be more significant.
But let’s put this is context. Google generates around $1 billion in New Zealand mainly from selling advertising to our businesses. It is developing a hyperscale cloud region in New Zealand which will see its business expand further.
Chump change for Google
At the same time, Google has been primarily responsible for hoovering up the revenue that previously supported media outlets, which serve an important role in our democracy. According to Duncan’s piece, Google and Meta were already supporting our media outlets to the tune of $10m - $12m a year. Sure, forcing Google and Meta to the negotiating table and pushing them into arbitration if they can’t strike deals, can be seen as a sort of digital tax. So what? This is about, as Duncan puts it, addressing “the vast power imbalance between New Zealand news organisations and the social and search giants which distribute their work and increasingly function as de facto owners of the internet”.
So I agree with the NPA, which represents the remnants of our struggling media sector. The Government should not back down. This is the first time our nation has done anything to proactively address the power of Big Tech. Now is not the time to run with our tails between our legs because Google has published a threatening blog post.
Having said that, there’s good sense in exploring putting in place a financial cap on what Google and Meta would be liable for as a result of the proposed scheme. That’s what happened in Canada, where the government stepped in late in the piece to negotiate directly with Google. That resulted in a C$100 million annual fund contributed by Google which is being divided between private and public media outlets in Canada.
That at least gives Google some financial certainty. A reasonable amount here might be in the range of $25m, chump change for Google in the scheme of its New Zealand business. But as I argued in my Listener piece this week, the news bargaining bill doesn’t account for AI and the wholesale scraping of web content by AI companies. That ultimately is probably a bigger problem than Google running news snippets in its search results.
It is already getting to the point where many people are receiving news summaries generated by ChatGPT and Perplexity, without visiting the sources of these summaries. Some overseas news sites have done commercial deals with the likes of OpenAI, others are blocking crawler bots from accessing their sites. What’s the point in Google negotiating deals to run content on Google News when its Gemini AI bot can vacuum up news content from every NZ-based news website?
The major AI companies running large language models trained on news content should also be required to strike deals under this proposed legislation otherwise its a Bill that’s already obsolete.
A year in, what has the coalition achieved in tech?
This weekend marks a year since the general election. It took a month or so for the coalition government to come together and get to work on its policy agenda. But it has been obsessed with getting things done pretty much ever since.
So what has it done in the tech and innovation space? Very little has had a tangible impact yet. Here’s my summary based on tracking the Government’s efforts in this space over the last year:
AI - A fair bit of behind-the-scenes work at MBIE, DIA and other agencies to come up with some semblance of a plan for how to use AI in government. A small experiment is underway with GovGPT. Very little to drive the uptake of AI across the wider economy.
Space - The Nats targeted the space sector for special attention. A strategy for the sector has been released and efforts are underway to update regulations to make NZ an attractive place to test aerospace tech. However the Tāwhaki ran into trouble when it failed to attract any overseas clients to use its facilities. Judith Collins has been a passionate flagbearer for the space sector but attracting business here without offering subsidies will be an uphill battle.
Tech skills - No sign of the various visas that were promised to lure top tech talent from overseas. The tanking market for tech roles this year and talent exodus to Australia and beyond as a result suggests the Government would be hard-pressed to fill those via slots anyway. On the domestic front, killing skills initiatives that were part of the defunded Digital Industry Transformation Plan have left a bit of a void in efforts to increase digital skills, and upskill and reskill the workforce.
Tech investment - with the cupboard bare, nothing was promised in terms of boosting government funding for startups. One bone the government did throw the startup sector was a plan to look at reforming taxation rules around employment share option schemes (ESOPs). That process is now underway, but may not go far enough to significantly increase the attractiveness of working for a NZ startup, from what people in the sector tell me.
Biotech reform - This is underway, with new legislation drafted and plans for a dedicated biotech regulator. With lingering opposition to genetic modification in New Zealand, this isn’t a process to rush and will require thorough public consultation. But its great to see the foundations for change being put in place.
Science and innovation shake-up - Our scientists have had a very rough year faced with budget cuts and job losses. A group of experts led by Sir Peter Gluckman is about to reveal what the Government wants to do with the research sector. Without a funding boost, it could be a case of rearranging the deck chairs on the Titanic. Many scientists are looking overseas for greener pastures. Without a credible plan for the sector, we risk crimping our ability to generate research that can translate into commercially viable innovations.
