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Google threatens to shut down search in Australia over digital news code

Google has reportedly suspended business with Huawei that requires the transfer of hardware and software products except those covered by open source licenses. Photo: EPA-EFE. Sketched by the Pan Pacific Agency.

CANBERRA, Jan 22, 2021, The Guardian. Google has threatened to remove its search engine from Australia and Facebook has threatened to remove news from its feed for all Australian users if a code forcing the companies to negotiate payments to news media companies goes ahead, The Guardian reported.

The move would mean the 19 million Australians who use Google every month would no longer be able to use Google Search, and 17 million Australians who log into Facebook every month would not be able to see or post any news articles on the social media site.

The two companies are fighting against legislation currently before the parliament that would force the digital platforms to enter into negotiations with news media companies for payment for content, with an arbiter to ultimately decide the payment amount if no agreement can be reached.

On Friday, Google delivered an ultimatum to the government, saying it would not be viable to continue offering search in Australia if the code goes ahead.

The company’s Australian managing director, Mel Silva, told a Senate committee the proposed news code was untenable and would set a “dangerous precedent” for paying for links.

“The principle of unrestricted linking between websites is fundamental to search and coupled with the unmanageable financial and operational risk 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,” she said.

“Withdrawing our services from Australia is the last thing that Google want to have happen, especially when there is another way forward.”

Silva said the company wanted to make changes to the code to make it “workable”, and the company was keen to enter into agreements with media companies to pay for content, pointing out around 450 deals have been made with media companies around the world.

The prime minister, Scott Morrison, said at a press conference in Brisbane the government would not respond to threats.

“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 and people who want to work with that, in Australia, you’re very welcome.

“But we don’t respond to threats.”

Reset Australia, an organisation that is lobbying for the regulation of big tech companies, said Google was bullying Australia.

“Today’s egregious threats show Google has the body of behemoth, but the brain of brat,” the executive director, Chris Cooper, said. “When a private corporation tries to use its monopoly power to threaten and bully a sovereign nation, it’s a surefire sign that regulation is long overdue.”

Representatives from Facebook repeated the company’s previous threat to pull news content from user feeds. Josh Machin, Facebook’s head of public policy in Australia, said if the code goes ahead, Facebook would potentially prevent not just news companies from posting links to news articles on Facebook, but all users based in Australia.

Machin said news articles make up under 5% of what the average user sees in their feed, and Facebook did not get much commercial benefit from news articles posted on Facebook.

When asked whether Facebook profited from fake news posted on the platform, Machin said no commercial benefit was gained by Facebook on its users posting fake news.

The Guardian Australia managing director, Dan Stinton, told the committee the claims were misleading because news content keeps users engaged on Facebook.

“The way you advertise on Facebook is within the Facebook newsfeed and news content does provide at least some of the engagement that the Facebook newsfeed delivers,” he said.

“So I’m surprised that they say they see no value in journalism within the Facebook newsfeed.”

Australia’s competition watchdog, the Australian Competition and Consumer Commission, developed the code. Its chair, Rod Sims, told the committee what was being lost in the debate was the code was not simply a requirement for Google and Facebook to pay per click for news articles.

“Discussions we are aware of have focused on paying upfront lump-sum amounts, not per click,” he said.

“What this code does is it gives the possibility of arbitration, which I suspect won’t be used that often, but that possibility evens up the bargaining process. This is really the only way we can get commercial deals.”

Labor’s shadow communications minister, Michelle Rowland, said it was concerning Google and Facebook believed the code was unworkable.

“[The treasurer] Josh Frydenberg and [communications minister] Paul Fletcher need to explain why they can’t find a way to support the media without also disrupting the millions of Australians who use Google Search and Facebook every month,” she said.

Google’s threat came on the same day the company signed an agreement with 300 French publications to pay them for their content appearing in search results.

Senators repeatedly questioned Silva about what they said was a threat, asking whether it was simply about avoiding the precedent it would create worldwide for paying for news in search results.

Silva denied it was a threat, just the “worst case scenario” if the code went ahead.

The independent senator Rex Patrick compared Google’s threat with China threatening Australia’s trade in response to the inquiry into Covid-19. He said Google’s response was not about “breaking” search, but Google protecting its revenue.

“It’s about breaking your bank account, that’s what this is about,” he said. “It does not touch the internet and the way in which it works,” he said.

Silva told the hearing that last year Google paid $59m in tax on profits before tax of $134m, and $4.8bn in revenue in Australia.

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