Google threatens to pull search engine in Australia in stand-off with government

Google has threatened to disable its search engine in Australia if it is forced to pay local publishers for news in a dramatic escalation of a months-long stand-off with the government.

A proposed law, intended to compensate publishers for the value their stories generate for the company, is “unworkable”, Google’s managing director for Australia and New Zealand, Mel Silva, told a parliamentary hearing on Friday. She specifically opposed the requirement that Google pay media companies for displaying snippets of articles in search results.

The threat is Google’s most potent yet as the digital giant tries to stem a flow of regulatory action worldwide, but such a radical step would hand an entire developed market to rivals. At least 94 per cent of online searches in Australia go through Google, according to the local competition regulator.

“We don’t respond to threats,” prime minister Scott Morrison said on Friday. “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.”

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Social media

Facebook, the only other company targeted by the legislation, also opposes the law. The social media platform reiterated at Friday’s hearing that it is considering blocking Australians from sharing news on Facebook if the law is pushed through.

The legislation is designed to support a local media industry, including Rupert Murdoch’s News Corp, that has struggled to adapt to the digital economy. Google’s tougher stance drew rebukes from lawmakers at the hearing, with senator Andrew Bragg accusing the tech giant of trying to blackmail Australians and policymakers.

“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,” Ms Silva told a panel of senators. She described the law as an “untenable financial and operational precedent”.

But the California-based company has adapted to similar requests in other countries without cutting off the search function. Last year, Google stopped showing news from European publishers on search results for French users after local regulators urged it to pay for content. On Thursday, however, the firm said it reached a deal to pay media publishers in the country. In 2014, it shuttered Google News in Spain following new copyright legislation.

‘Control and power’

Google is behaving like a corporate bully, said Johan Lidberg, an associate professor at Melbourne’s Monash University who specialises in media and journalism.

“It’s about control and power,” he said. “They’re signalling to other regulators they’ll have a fight on their hands if they do this.”

Ms Silva proposed Google’s News Showcase, where the company pays select media outlets to display curated content, as an alternative to the Australian legislation. Since the service isn’t available in Australia, Mr Bragg said it was impossible to assess its value to the local market.

“All we’ve got today is your threats and your blackmail,” he told Ms Silva.– Bloomberg