Alphabet Inc’s Google said on Friday it would block its search engine in Australia unless the government changed landmark legislation to make the internet giant and Facebook Inc pay news outlets for their content.
“If this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia,” Google Australia managing director Mel Silva warned a Senate committee.
This is the first time the company has made such a threat after months of difficult negotiations over the draft law.
Australia announced the legislation last month after an investigation found Google and social media giant Facebook held too much market power in the media industry, a situation it said posed a potential threat to a well-functioning democracy.
The legislation forces Google and Facebook to pay local media organizations to host news content or face millions of dollars in fines, in one of the most aggressive moves globally to check the power of the US tech giants.
Under the laws, the firms would be required to compensate Australian media outlets, ranging from Rupert Murdoch’s giant News Corp to public broadcasters ABC and SBS, for publishing snippets of their content in search results.
The law would also require the platforms to give the news businesses two weeks’ notice of algorithm changes affecting the distribution of their content, and includes punitive clauses to stop the firms from blocking content to avoid payment.
The search giant had warned that its 19 million Australian users would face degraded search if the new code were enforced.
Australia is on course to pass laws that would make tech giants negotiate payments with local publishers and broadcasters for content included in search results or news feeds. If they cannot strike a deal, a government-appointed arbitrator will decide the price.
Google’s comments drew a sharp rebuke from Australian Prime Minister Scott Morrison who said the country makes its rules for “things you can do in Australia.”
“People who want to work with that in Australia, you’re very welcome. But we don’t respond to threats,” Morrison told reporters.
Google has called the code overly broad and said that without revisions, offering even a limited search tool would be too risky. The company does not disclose sales from Australia, but search ads are its biggest contributor to revenue and profit globally.
The United States government this week asked Australia to scrap the proposed laws, which have broad political support, and suggested Australia should pursue a voluntary code instead.
Google’s threat to limit its services in Australia came just hours after the internet giant reached a content-payment deal with some French news publishers as part of a three-year, $1.3-billion push to support publishers.
Google’s testimony “is part of a pattern of threatening behaviour that is chilling for anyone who values our democracy,” said Peter Lewis, director of the Australia Institute’s Centre for Responsible Technology.