Negotiation by the media

There is so much to learn about negotiation from watching Google, Facebook, the press and the Government “slug it out” in public.

Over the last week or so traditional media organisations have been reporting hearings in the Senate that relate to the Government’s proposal to legislate a so called “media bargaining code”.   What is playing out is a very public negotiation, involving not only Google, Facebook and the Government but the press and the public. 

The traditional media such as Nine and News Limited, who reported what was said in the hearings are “parties” to the negotiation. The proposed code benefits them. Their reporting is part of the negotiation "dance".

Microsoft is a “party” to the negotiation. Its Bing product competes with Google.

The ACCC is involved (as part of the Government) and is trying to provide the criteria by which legitimacy is to be measured. Its Chair has strongly supported the proposed code. 

Most of those parties have been “negotiating” in the glare of public scrutiny and I suspect that some, if not all, believe that the public nature of the negotiation will help them get their own way.

Headlines such as “Google threatens to 'stop providing Search' in Australia if media code becomes law” have been seen in many publications and the word threat anchors most news reporting of what Google Australia’s CEO said to the hearing. News providers used that word for a reason. It made Google sound like a bully. Some commentators even used the B word. Being called a bully is no faint criticism, it is intended to hurt.

When the words of the Google CEO are read without emotion, they are no where near as “threatening” as reported. This is how a Nine News reporter recounted her words (with my emphasis).

"If the Code becomes law, Google would have no real choice but to stop providing Search in Australia. That's a worst-case scenario and the last thing we want to have happen — especially when there is a way forward to a workable Code that allows us to support Australian journalism without breaking Search,"

I am not sure if Google (or Facebook) were really at their wits end at this point, though subsequent reports suggest that they were not. I will never know whether they hoped that the words were heard and reported as a threat.

What this encounter (so far) reminds commercial negotiators is to be careful that words they use cannot be interpreted as a threat, unless you want to threaten. When words to the effect “if I do not get my way, I will walk away” are used in a negotiation, people often hear a threat.  In this case the media decided not only to call it a threat, but to do so publicly and in a very loud voice. The media wanted to paint Google as a bully. Public opinion is especially important in this negotiation and the media and Government knows it.

The exchange and outcome so far identify some perennial negotiation dilemmas. 

The first dilemma is how to convey steely resolve without sounding like a bully or worse, unhinged. Of course, it is perfectly legitimate for Google to withdraw some services from the Australian market (in this case its Search product). If the cost of providing the service becomes prohibitive because of the code that is what they might do. If that reality is obvious (and it should be) saying it during a publicly broadcast negotiation invites retaliation. It allowed the Government, and other media, to do two things;

1.     Paint Google as a “bad” actor, a bully. 

2.     Make its own threats and power response straight from a “Crocodile Dundee” play book, “That’s not a knife, this is a knife” . This is how the Financial Review reported it,

The Prime Minister has slapped down a threat from Google to remove its search product from Australia if the current form of the proposed news media bargaining code proceeds.

Scott Morrison said Australia made its own rules, warning the government did not respond to threats.

At that point the negotiation was at risk of becoming a public knife fight with the first person to blink losing and everyone thinking that they had the biggest knife!

We now know, however, that the Prime Minister did not want to risk an extremely high stakes knife fight or game of brinksmanship. Apparently, he “backgrounded” the media yesterday, speaking of a “constructive” conversation he had in private with the global head of Google. Why the global head and not the Australian CEO? Because that allows everyone to save face and calm down. We are not certain that the PM accurately summarised the mood of his otherwise private conversation with Google, and if he did report accurately it indicates that both parties understand the hole that they were digging with brinksmanship negotiation.

There was one other consequence of the exchange in the Senate enquiry. When Microsoft heard it, they quickly hopped on their white horse and offered to ride to the rescue of the Government and all of us!  This is how the Guardian reported it;

Microsoft's Bing ready to step in if Google pulls search from Australia, minister says. Paul Fletcher plays down Google threat and says government will not back down on news media code.

Notice how minister Fletcher continues to speak like the tough guy, while he uses Microsoft to diminish the risk of Google’s so called “threat”.

The saying “speak softly and carry a big stick” has been offered as advice for such public negotiation and diplomacy. The saying recognises the need to have a strong position, and the risk of us raising our voice or threatening. Notice that the saying says that we should carry a big stick, not wave it around or use it as a negotiation tool.

In the media code negotiation Google’s big stick is the possibility of exiting a market. This is what negotiators would call the Alternative that is best for Google (or BATNA) if they cannot negotiate an acceptable deal.

Here is what can be learned from this negotiation, so far.

·       Every negotiator has a “stick”. Threatening to use it risks a power battle and/or serious damage to relationships and reputation.

·       The more public the negotiation the greater are the risks associated with being heard to make a threat.

·       Negotiating when your competitor can hear may not be wise. Especially if your competitor wants a stronger relationship with your customers or the government.

·       A perceived threat is often a distraction from the main game. In this case the main game is not whether Google and Facebooks should pay for content, rather the main game is what is a fair price for the content and how disputes about a fair price will be determined.

·       If you are negotiating in public, AND one of the counterparties has a loud voice (e.g. is a media company), they might use that voice to paint you as the villain, even if you are not.

·       Be careful if you are signalling that you will go to you BATNA. It is usually better to do so when further negotiations seem impossible and even then, can be framed in a way that leaves the door open, for instance this, in private;

o  We appreciate the chance to discuss the proposed law with you and we think we better understand each other now. You have told us that the Government is not prepared to consider altering the proposed legislation in any way. In that case we will reluctantly have to consider our position in providing our Search product in Australia. That is not what we want to do but is better for us than exposing our company to the costs and restrictions that will be imposed by the proposed  law. Our door is always open should the Government be willing to consider amendments to the law.

NB.  I suspect that this is what Google really wanted the Government to hear, but the public nature of her words spoken at the hearing left the words spoken open to the interpretation placed on them by the media.

·       It is better to frame a negotiation as a joint problem-solving exercise than “either or”. For instance;

o  “What we need to work out is how to find a fair mechanism to compensate media companies for the use of their copy in a way that does not threaten the public benefit of our effective and extremely popular search engine.”

·       Sometimes there is a need to change the game. Doing so without losing face is tricky. In this case the game was changed behind the closed door of the PMs office.

I will be fascinated to see how this negotiation plays out. There is plenty at stake including a precedent that might spill over to other jurisdictions. And there is still some way to go.