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Google Commits $1B To License News From Global Media Outlets — Unless They're Australian

Google Commits $1B To License News From Global Media Outlets — Unless They're Australian

Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) CEO Sundar Pichai announced Thursday the tech giant’s initial $1 billion commitment to license news content for a novel service called Google News Showcase.

What Happened: It is the company’s largest financial commitment to date to news publishers and would benefit both the industry and readers, Pichai said in a statement.

Initially, the service would be available on Google News on Android but it will be rolled out on Apple Inc's (NASDAQ: AAPL) iOS later, according to Pichai.

The news product, containing story panels that resemble virtual cards, will also come to Google Discover and Search in the future.

The CEO said that Brazil and Germany are the first countries to receive the new product and it will also be launched in other countries in the coming months.

The tech giant is also working on bringing the news product to India, Belgium, and The Netherlands.

Even as Pichai named Australia among the list, Google is not going ahead with the launch of News Showcase in the country for now, Reuters reported.

The decision of Australia’s antitrust body to force Google to pay royalties for news content is reported to be the reason behind the decision. 

“As we work to understand the impacts of the news media bargaining code on partnerships and products, we have put this project on pause for now,” Google Managing Director for Australia and New Zealand Mel Silva told Reuters.

Why It Matters: Alphabet unit Google and Facebook Inc (NASDAQ: FB) are required to negotiate with Australian media outlets regarding revenue sharing — failing which a binding arbitration process would ensue and lead to penalties up to $7 million or 10% of local revenue.

Google had termed the Australian government’s actions as “heavy-handed.” 

Countries like France, Germany, and Spain have tried to get Google to share revenue with media through legal means with little success. 

Price Action: Alphabet Class A shares closed nearly 1.5% higher at $1,487.90 on Thursday and gained 0.14% in the after-hours session. On the same day, the company’s Class C shares closed almost 1.4% higher at $1,490.09.


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