Google has threatened to block its search engine in Australia if it is forced to pay media outlets for their news content.
Both Google and social media giant Facebook – which also opposes the rules and has threatened to remove news from its feed for Australian users – are fighting government plans for a new digital news code.
It would make tech giants negotiate payments with local publishers and broadcasters, and a government-appointed arbitrator would decide the price if they fail to strike a deal.
“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,” Mel Silva, the company’s managing director for Australia and New Zealand, told a Senate inquiry into the bill.
“And that would be a bad outcome not only for us, but also for the Australian people, media diversity, and the small businesses who use our products every day.”
Australian Prime Minister Scott Morrison immediately hit back, saying “we don’t respond to threats”.
Ms Silva said the company was willing to pay a wide and diverse group of news publishers for the value they added, but not under the rules currently proposed, which includes payments for links and snippets.
She suggested a series of tweaks to the bill, adding: “We feel there is a workable path forward.”
Simon Milner, a Facebook vice president, said the sheer volume of deals it would have to strike would be unworkable.
Google dominates internet searches in Australia, with Ms Silva telling senators about 95% are done through the company.
Mr Morrison told reporters in Brisbane: “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.”
He added: “People who want to work with that in Australia, you’re very welcome. But we don’t respond to threats.”
Australia announced the legislation last month after an investigation found Google and Facebook held too much market power in the media industry, a situation it said posed a potential threat to a well-functioning democracy.
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Facebook and Alphabet, the parent company of Google, are among the most prominent American technology companies.
The US government this week asked Australia to scrap the proposed laws, and suggested it should pursue a voluntary code instead.
But The Australia Institute, an independent think tank, said politicians should stand firm against the tech giants.
“Google’s testimony today is part of a pattern of threatening behaviour that is chilling for anyone who values our democracy,” said Peter Lewis, the director of the institute’s Centre for Responsible Technology.