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Google is threatening to pull its search engine out of Australia, as part of a campaign by the Australian government to get the tech giant to share property rights with the media.
Australia introduced the world’s first law of its kind to force Google, Facebook, and other tech companies to pay media for their topical content.
However, US companies resisted the move, warning that the law would force them to withdraw some of their services, while Australian Prime Minister Scott Morrison stressed that officials would not bow to “threats.”
In statements to reporters on Friday, he said: “Let me be clear, Australia sets its own rules for what it can do in the country. And it is done in our parliament.”
The Australian proposal would force Google and Facebook to use a medium to negotiate the value of news content with publishers, if they can’t come to an agreement.
Google Australia chief executive Melanie Silva said the law was “unrealistic” in an Australian Senate hearing.
Silva warned that “if this version of the code becomes law, we will have no choice but to make the Google search engine unavailable in Australia.”
Asked by lawmakers, they accused “Google” of “blackmail” and attempted intimidation in Australia for proposing this reform.
And in response to a question from Senator Rex Patrick: “This will happen in all regions of the world. Will they withdraw from all markets? Or is it an attempt to avoid a precedent?” The chief executive of Google Australia said the law presented “an unsustainable risk to our Australian operations”.
Why push this law?
Google is the dominant search engine in Australia, it controls 90% of the market and has little competition.
The government has argued that because tech platforms attract customers of people who want to read the news, tech giants should pay editorial staff a “reasonable” amount for their journalistic work.
She also stressed that this financial support is essential for the struggling news industry, because “a strong media is vital for democracy”.
According to official figures, the Australian print media have seen their advertising revenues decline by 75% since 2005.
Google’s threat to completely shut down the search engine is the most dangerous yet in a country where news accounts for just 12.5% of searches.
“It’s a somewhat unusual threat,” said James Clayton, BBC technology correspondent. “Google’s threat to withdraw from an entire country indicates that the company is concerned.”
“Australia is far from being its biggest market. But Google executives are afraid of a precedent set by these new laws,” he adds.
As Clayton explains, Google – which generates almost all of its advertising revenue – is making high profits, while many local newspapers are struggling.
“While Google says it wants to help fund the indigenous press, it clearly thinks that what is being offered in Australia could fundamentally harm its business model if it is repeated elsewhere,” he said.
Google argues
“If the law requires a business to pay for links and search results, it will set an unsustainable precedent for our business and the digital economy,” said Silva.
The Google executive added that this would not be compatible with the free flow of information on the Internet or “the functioning of the network”.
Google last week confirmed that it had blocked Australian news sites from its search results for around 1% of local users. She said it was an experiment to test the value of Australian news services.
And last year, Facebook also threatened to block Australian users from sharing information on the platform if the law was enforced.
The social media giant repeated the position on Friday, and CEO Simon Milner told a Senate hearing that it was “the worst possible outcome.”
Milner also claimed that “Facebook” derives virtually no business benefit from delivering news content on its platform.
Companies insist that news agencies are already taking advantage of platforms that direct readers to their websites. Google also cited its association with the news service “Google News” as proof of its support for journalism.
Who benefits?
As BBC business correspondent Katie Silver explains, it is undeniable that the Australian news industry is struggling.
“Of 100 Australian dollars (77 US dollars) spent on digital advertising, 81 Australian dollars goes to Google and Facebook. The Covid-19 epidemic has exacerbated the situation,” she continues.
Tech giants aren’t entirely devoted to Australians, and the country’s competition watchdog has previously accused Facebook and Google of misleading Australian consumers about how their data is being used.
While some have questioned whether they can get alternative services through other search engines, others are wondering if removing Google would also remove Gmail, Google Maps and Google Home services, which the company does not. did not specify.
Amid the controversy, Google on Thursday agreed to pay French press editors for news clips that appear in search results, after the country’s media defended copyright laws.
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