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Melanie Silva posted a blog to ensure a mandatory code of conduct was based on facts,not"inaccurate numbers"and"unfounded assertions". — Melanie Silva posted a blog to ensure a mandatory code of conduct was based on facts,not "inaccurate numbers" and "unfounded assertions".Credit:Louie Douvis

"There's been some recent talk about the profitability of online news in Australia,including the suggestion that online platforms should be forced to pay publishers $600 million or more every year,"Ms Silva said."The direct economic value Google gets from news content in Search is very small. Google last year generated approximately $10 million in revenue—not profit—from clicks on ads against possible news-related queries in Australia."

Media outlets including Nine Entertainment Co (owner of this masthead) and News Corp Australia have argued publicly for annualpayments of between $600 million and $1 billion from the tech platforms as part of a compulsory code being introduced by the competition regulator. Ms Silva said these figures were based on the idea that news accounts for 10 per cent of queries and generates 10 per cent of gross Australia revenues.

ACCC chair Rod Sims said earlier this monthpayments by digital giants to media companies would be focused predominantly on the "indirect" value Google and Facebook gain from news content rather than direct revenue from news stories.

"Clearly the biggest benefit is not the direct benefit which is the ads shown against news items. That’s the really,really small benefit,"Mr Sims said."The indirect value that Google and Facebook gain from having news on their platform."

But in the blog post Ms Silva also dismissed the'indirect value'argument and claimed that news media businesses benefit far more than Google does from the relationship.

"The indirect economic value Google gets from news in Google Search is also very small,"Ms Silva said.

"The ‘indirect value’ argument...overestimates the relevance of a small fraction of hard-to-monetise queries and fails to consider that'indirect value'cuts both ways — Google Search encourages lots of traffic to news publishers from users who weren’t originally looking for news content at all."

Media companies and technology platforms are expected to put in their responses to an ACCC options paper that looks at the ways a mandatory code between Google,Facebook and local media companies could work by the end of this week. Publishers includingDaily Mail Australia,Verizon Media - which runsYahooandHuffPost AustraliaandGuardian Australia are all expected to put in submissions.

The paper outlines four options for payment to publishers:allowing companies to negotiate individually with Google and Facebook and use the code as the basis for arbitration. Alternatively the ACCC is proposing a collective bargaining agreement which would allow all media companies to work together on a set price for content in an attempt to receive better commercial terms. A collective boycott if commercial negotiations fail is a more radical idea while a fourth option proposes a collective licensing agreement or fee arrangement,which would include a fixed fee for the use of news content which could be distributed by a"collecting society".

Industry sources said that most publishers are leaning towards a collective licensing agreement.

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