Google Threatens To Leave Australia

Google has threatened to remove its search engine from Australia over the nation's attempt to make the tech giant share royalties with news publishers. Australia is introducing a world-first law to make Google, Facebook and potentially other tech companies pay media outlets for their news content.

The draft mandatory code, developed by the Australian Competition and Consumer Commission (ACCC), will give tech companies and news media businesses three months to reach a deal on fair payment, or else enter arbitration. The big technology companies face millions of dollars in fines should they breach the code.

But the US firms have fought back, warning the law would make them withdraw some of their services. Melanie Silva, the senior director and VP  at Google Australia and New Zealand, has described the government’s intervention, which ordered the ACCC to develop the mandatory code ahead of a deadline to allow tech companies and media owners to reach their own code, as "heavy handed". “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.” Silva said.

Google has threatened to disable its search engine in Australia if a new law forcing it to pay local publishers for news is passed, leading to a direct confrontation with prime minister Scott Morrison.

If the law is passed, the companies will have to negotiate payments with creators to be able to show news on their platform, including in search results or news feeds.  If they cannot strike a deal, a government-appointed arbitrator will decide the price.
Digital platforms face fines of up to A$10m (£5.6m) if they do not comply with the decision.

The biggest companies in technology rarely deliver ultimatums to notional governments, but this threat, from the company’s Australian senior executive is the latest escalation in a war of words over the proposal, which seeks to undo some of the damage online business models have dealt to the country’s publishing industry. The Australian prime minister, Scott Morrison, told a press conference “we don’t respond to threats”. But Google’s warning is hardly unusual in an industry that is loath to encourage countries to go it alone when it comes to sweeping regulation. Last September, for example, Facebook told an Irish court  that it may have to pull out of the European market entirely if a court judgment banning data flows between the US and UK was upheld. “In the event that Facebook were subject to a complete suspension of the transfer of users’ data to the US,” the company’s associate general counsel argued, “it is not clear … how, in those circumstances, it could continue to provide the Facebook and Instagram services in the EU.”

Similarly, tech companies have been warning for years that a UK attempt to regulate end-to-end encryption could lead to their messaging services being unfeasible to offer in Britain.

Rarely do governments and the technology giants disagree so publicly. Australia, though, has already had one such standoff with Amazon after there were sales tax changes in 2018 which meant the company refused to ship imports to Australia in order to avoid collecting tax on those purchases. But that felt like a win-win for some Australians, closing a tax loophole and boosting local retailers at the same time. The loss of Google’s search engine may be felt more keenly.

Google has followed through on similar threats in the past. Spanish users cannot access Google News to this day, after a law in the country intended to force Google to pay newspapers for excerpting links and headlines instead resulted in the company simply removing its news product.

In contrast, the Australian law seeks to require payments for any links to news, even on the main search engine  and by including Facebook  the country hopes to succeed in extracting revenue from Google, regardless of its  warning Australian senators that it would have to pull out of the country rather than pay the newly levied fee.

In France, Google has agreed to do just that in an agreement signed between Google France and the industrial body representing the country’s news industry, Google will pay licensing fees to individual news publishers to reuse their material online. Backed by France’s strong copyright protections for the news industry, Google had already negotiated with a few publishers, including Le Monde, but the new agreement sets a blanket precedent.

In a statement, Google said: “We have offered and agreed similar deals for News Showcase in Australia as in France and many other countries around the world. In Australia, it’s not about the money; it’s about being asked to pay for all links and snippets which the European Copyright Directive does not. Links and snippets are the building blocks of the free and open web. Sir Tim Berners Lee in his submission agrees.”

The Australia Institute, an independent think tank says the the government should stand firm. “Google’s testimony today is part of a pattern of threatening behaviour that is chilling for anyone who values our democracy,” Peter Lewis, the director of the Institute’s Centre for Responsible Technology told reporters.

ACCC:    AdNews:      Tribune India:     BBC:     Independent:       Guardian:     National Review:

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