Google threatened on Friday to remove its search engine from Australia entirely, in an escalating dispute over a government-backed proposal to force Big Tech companies to pay local media outlets for news content.
Australian media outlets have complained that revenues have dropped over the past decade because advertisers have moved from newspapers to publishing on Google, Facebook, and other tech platforms. The government’s proposed legislation would force those tech companies to pay news outlets for content, granting an independent body the power to arbitrate disputes between the two.
Among the legislation’s supporters is News Corp Australia, part of Australia-born media mogul Rupert Murdoch’s conglomerate News Corporation.
“If the Code becomes law, Google would have no real choice but to stop providing Search in Australia,” Google’s local managing editor Mel Silva told the Australian Senate. “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.”
Prime Minister Scott Morrison criticized Silva’s comments, saying the government would not bow to threats from the company.
“Let me be clear. Australia makes our rules for things you can do in Australia. That’s done in our parliament. It’s done by our government. And that’s how things work here in Australia,” Morrison said. “And people who want to work with that, in Australia, you’re very welcome. But we don’t respond to threats.”
Australia’s effort to force tech companies to pay local news outlets represents one of the most direct challenges to those companies’ operations throughout the world. Google and Facebook have claimed that forcing the payments represents a threat to their profits.
The legislation also threatens to up local media outlets’ bargaining power against the tech companies, Peter Lewis, director of the Center for Responsible Technology at the Australia Institute, told The New York Times.
“It’s about the external process being imposed on them by legislation, rather than by them just being able to dole out deals as they see fit,” Lewis said. Australia’s proposal “shifts the balance of power from their hands to a third party, and that’s what they can’t countenance.”