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Over the past month, we’ve outlined our concerns with Australia’s draft News Media Bargaining Code: a new proposed law that would impact the way Australians use Google Search and YouTube. We don’t oppose a code governing the relationship between news businesses and digital platforms—but right now the way the law is drafted isn’t fair or workable.
Last week, we proposed changes to help move us forward. Today, we want to go into more detail about one of our biggest concerns—the highly unusual, largely untested, one-sided arbitration system that would determine commercial arrangements between Google and news companies.
Here are the issues.
Unprecedented in Australia
The system being proposed is called ‘binding final-offer arbitration’, referred to in the United States as ‘baseball arbitration’. It isn’t used in any of the eight other mandatory codes in Australia. In fact, without the two parties’ consent, it’s never been used in Australian law before.
In a standard negotiation, two parties negotiate a price for a product or service after assessing its market value and the value each side provides the other. If the parties can’t reach an agreement, they might ask a mediator or arbitrator to decide on what’s fair.
In baseball arbitration, if the two sides can’t reach an agreement, each puts forward a single final offer and the arbitrator picks one, guided by set criteria.
This system is usually put in place if there’s not much dispute over the value of the product or service being discussed and the parties are already close in price. But with the media code, some of the amounts being suggested by news businesses about how much we should pay to provide links to their stories defy commercial reality.
One news business has already claimed digital platforms should pay $1 billion every year, despite the fact that only 1 percent of all searches by Australians last year were seeking news—equating to around $10 million dollars in revenue (not profit).
Clearly, both sides have very different ideas of what the prices should be—and asking the arbitrator to pick a ‘final offer’ is an extreme way of resolving that. The reality is that baseball arbitration often fails and doesn’t produce quick outcomes. Independent economists have raised questions about its effectiveness here.
The results are also unpredictable, and no business can operate with that level of uncertainty.
The playing field is not level
The fundamental idea of baseball arbitration is that both sides present their evidence— like the player’s contribution, the team’s recent performance and comparable salaries—and the arbitrator decides the appropriate offer.
But the draft code doesn’t provide a level playing field.
As it stands, the arbitrator isn’t required to consider the value Google provides to news media businesses in the form of traffic to their websites, which in 2018 was estimated at more than $200 million per year.
Not only is that unfair—it goes against what the Australian Competition and Consumer Commission (ACCC) itself said should happen when it was preparing the code: “Negotiations around compensation for the use of news should also take into account the value that Google and Facebook already provide to news media businesses for using their news content.”
News media businesses can also make enormous financial demands of Google based on the vague and flawed concept of the ‘indirect’ value that news content provides (our data shows that the direct value of news to Google is negligible). Even the ACCC itself hasn’t been able to put a number on the indirect value of news, after several years of inquiry.
When the playing field is set up to favor one side, then that side is encouraged to make ambit, or exaggerated, claims.
A question of costs
But that’s not the only one-sided rule here.
The draft code also says the arbitrator should consider news businesses’ production costs — but not Google’s.
Again, that’s a significant amount of money, givenwe invest $1 billion each year in Australia to improve the services 22 million Australians use daily. This investment includes initiatives to directly support Australian news companies, like our digital skills training program for local newsrooms.
The only other factor the arbitrator must consider when deciding on a payment is that it must not place ‘an undue burden’ on Google. It’s a vague and undefined condition and an insufficient substitute for being able to talk about our actual value and costs.
A fair and workable solution
In all of the submissions to the ACCC, only one news business proposed binding final-offer arbitration be used in the code. Many requested that the code use standard arbitration—a method regularly used for resolving disputes in Australia and around the world. We are happy to negotiate fairly and, if needed, see a standard dispute resolution scheme in place. But given the inherent problems with baseball arbitration, and the unfair rules that underpin it here, the model being proposed isn’t workable for Google. It wouldn’t be workable for many Australian businesses—no matter how large or small they are.
When the going gets tough, the tough bake sourdough bread. Or take up knitting. Or just really get into a new video game. In the months since the COVID-19 pandemic left many of us working from home and social distancing cut down on our calendars, we’ve had plenty of time to pick up a few new hobbies here and there. Others have spent time figuring out how to adapt their passions to the inside of their homes. And that’s the case for Googlers, too, who are still playing in orchestras and working on arts and crafts in quarantine. Here are a few inspiring projects Googlers are working on in their spare time, from home.
Last year, a group of 20 San Francisco-area Googlers got together to compete in a local dance competition. They called themselves Incognito Mode and won second place. Since then, they performed in showcases both inside and outside the office, but the pandemic put a stop to performing in person anytime soon. Instead, they recorded a dance video from their homes, dodging friends, roommates and pets in the process. Each of the 18 participants choreographed a portion of the routine, and they later edited the footage together. “We faced new challenges of dancing together virtually, but it also allowed us to connect in ways we wouldn’t have otherwise,” says Jason Scott, head of Google’s U.S. startup developer ecosystem and one of the group’s creative directors. “Many of our members now live around the country, but remote dance projects have let them continue dancing with us.”
In the summer of 2016, around 30 Googlers picked up their instruments and played in The Googler Orchestra’s very first concert. Ever since then, they’ve rehearsed weekly and grown in numbers, with their last in-person performance featuring 80 Googler musicians. After Googlers started working from home, one orchestra member posted a call to get people to play together virtually. That started the Googler Virtual Orchestra, which has increased the group’s membership; their third recording will feature more than 100 musicians across three countries.
Members each individually record their parts and then edit the footage together into one track. “It’s a logistical challenge,” says Colton Provias, the group’s lead audio engineer and a software engineer based in Sunnyvale, California. “It takes about three months from first discussions of what piece to play through the released video.”
The group intends to continue their work-from-home performances, and potentially adding other instruments or even a choir. “It speaks to the many talents that Googlers have, not just in the workplace, but outside of it too,” says Derek Wu, the orchestra’s founder and a software engineer based in Palo Alto, California. “The orchestra, for myself and others, allows everyone to unite together and create music that as a whole is greater than the sum of its parts.”
Gao Fang, who works in information security from Google’s Singapore office, had never drawn a comic before she started working from home in March. “Before the pandemic, I could roam around and sketch landscapes,” she says. “Then the lockdown happened and there was only that much I could sketch in my apartment. My hands got itchy for things to draw, and since I would like to keep a diary of this historical event, it's a natural step to record my days with some drawings.”
Adam Stoves, who works on the Real Estate and Workplace Services team in New York, has been working from his 600-square-foot apartment alongside his wife and their toddler. Back in May, on a whim, he bought a pack of Play-Doh to entertain his daughter, but it ended up entertaining the parents, too. He and his wife started crafting miniature sculptures, which they now share online. They’ve created miniature foods, animals and even a teensy face mask. “Our daughter will pitch in from time to time, but her true talent lies indisputably in being the cutest hand model ever,” Adam says. “We have a limited window where she remains attentive, so we do a little chant: Big flat hand! Big flat hand!, when it’s time to photograph. It helps sharpen her toddler focus.”
Editor’s Note: The following email was sent to the company today from Eileen Naughton, VP of People Operations.
Over the past several years, we have been taking a harder line on inappropriate conduct, and have worked to provide better support to the people who report it. Protecting our workplace and culture means getting both of these things right, and in recent years we’ve worked hard to set and uphold higher standards for the whole company. Thank you for your clear feedback as we’ve advanced this work.
The changes we’ve made to build a more equitable and respectful workplace include overhauling the way we handle and investigate employee concerns, introducing new care programs for employees who report concerns, and making arbitration optional for Google employees.
In late 2018, Alphabet’s Board responded to employee concerns by overseeing a comprehensive review of policies and practices related to sexual harassment, sexual misconduct, and retaliation. An independent committee of the Board also reviewed claims raised by shareholders in early 2019 about past workplace misconduct issues. Today we’re committing to five guiding principles and a list of detailed changes to our workplace policies and practices agreed to by the committee. These principles and improvements incorporate input from both employees and shareholders.
Below are some of the key changes we’re making.
We’re setting up a new DEI Advisory Council to advise on and oversee these efforts, with experts Judge Nancy Gertner (retired), Grace Speights, and Fred Alvarez joining Sundar, Chief Diversity Officer Melonie Parker, SVP of Global Affairs Kent Walker, and SVP of Core Jen Fitzpatrick. They will report to the Leadership Development and Compensation Committee of the Board (LDCC) on a quarterly basis on the company’s progress against these commitments.
We’re building on our current practice of prohibiting severance for anyone terminated for any form of misconduct, and expanding the prohibition to anyone who is the subject of a pending investigation for sexual misconduct or retaliation. Managers will also receive guidance instructing them on how misconduct should impact an employee's performance evaluation, compensation decisions, and promotion outcomes.
If there are allegations against any executives, a specialist team will be assigned and the results of any case will be reported to the Board’s Audit Committee.
We’ll ensure that $310 million in funding goes toward diversity, equity and inclusion initiatives and programs focused on increasing access to computer science education and careers; continuing to build a more representative workforce; fostering a respectful, equitable and inclusive workplace culture; and helping businesses from underrepresented groups to succeed in the digital economy and tech industry.
Other Bets are required to adhere to our new principles too. Changes they are making now include making arbitration optional for all employees, temporary staff, vendors, and independent contractors for individual harassment, discrimination, and retaliation disputes with Alphabet; as well as following the new Alphabet model for executive investigations. Every Alphabet company (including Google and all Other Bets) will be required to undertake an annual review of their own individual policies and practices to ensure they are consistent with Alphabet’s guiding principles in this area.
Together, Sundar, the DEI Advisory Council, and the Board will uphold Alphabet’s unwavering commitment to prohibit and respond effectively to complaints of sexual harassment, discrimination, and retaliation and promote diversity, equity, and inclusion in the workplace.
Recent years have involved a lot of introspection and work to make sure we’re providing a safe and inclusive workplace for every employee. That doesn’t stop here and you’ll receive reports on our progress as we move forward. I’m grateful to everyone, especially our employees and shareholders, for providing us with feedback, and for making sure that the way we tackle these vital issues is better today than it was in the past.