Google is threatening to leave Australia over a proposed media law. It's a battle the search giant is sure to face in other countries.
Last month, Google said it may stop providing search results in Australia if the government passes a new bill forcing it to pay the country's publishers for the news links and snippets its search engine surfaces. Leaving Australia would deprive its 25 million citizens of the world's most widely used search engine, which handles almost 95% of the country's daily searches.
"We don't respond to threats," Australian Prime Minister Scott Morrison told reporters on Jan. 21. The country makes its own rules on "things you can do in Australia," he added.
Tempers have since cooled, and Morrison had a "constructive" conversation with Google CEO Sundar Pichai last week. But the seven-month battle over Australia's proposed News Media Bargaining Code bill, which also covers Facebook, is far from over. It moved to a new phase on Friday, when a bipartisan Senate committee released an inquiry report recommending the House of Representatives passed the bill.
The clash between Google and Canberra will ripple far away from Australia's pristine beaches. Countries around the world are reckoning with the havoc Google, Facebook and other tech companies have wreaked on their media landscapes. A Canadian minister has backed Australia's proposed Media Code and called for Google and Facebook to pay publishers in his country. Alex Saliba, a member of the European Parliament, told CNET that he wants to include similar measures in upcoming EU legislation. Competitors are watching too. Microsoft, Google's chief search engine rival, has urged similar regulations in the US.
"It will be a very powerful precedent," said Frank Pasquale, a professor at Brooklyn Law School who researches technology law and policy. "It is emblematic of a global fight by Google on regulatory actions on all levels."
Entering the House of Representatives last December, the News Media Bargaining Code bill was designed by Australia's competition watchdog, the ACCC, to force Google and Facebook to negotiate with publishers. It would require Google and local publishers to reach an agreement within three months of becoming law, or a government-appointed panel will decide the compensation. It also would require that Google inform publishers of changes to its algorithm before they take effect.
Google says paying for snippets that come up in search undermines the idea of an open internet. The company also argues the arbitration process is likely to result in unfairly high fees. The search engine's exit from the country would be a "worst-case scenario," a Google spokesman said in a statement. "We remain committed to reaching a solution for a workable Code, as we have been throughout this whole process."
Sundar Pichai addresses a US Senate committee
The Australian spat comes as governments around the world look to clamp down on big tech. Sundar Pichai, CEO of Google-owner Alphabet, is seen here in October speaking remotely to a Senate committee in Washington.
Google's Showcase strategy
Google's threat to remove Search from Australia isn't without precedent. The company removed its Google News product from Spain in 2014 when the government passed a copyright law forcing it to pay publishers for headlines and news snippets. Removing search from Australia will have a little financial impact on the company: It made more than $160 billion in revenue in 2019, with around 2.5% of that coming from sales in Australia.
But cutting pesky markets isn't a long-term strategy. Google search is already blocked from China, the world's most populous country. The EU, which is also scrutinizing the company, will be much harder to walk away from.
Google is hoping to preempt legislation like Australia's by expanding its News Showcase, a feature in the Google News app on Android and iOS that delivers curated news from participating publications. After launching News Showcase in Germany and Brazil last October, Googled brought the initiative to Australia in early February as Australia's senate deliberated the News Media Code bill. Google has committed $1 billion to publishers via News Showcase over the next three years.
Seven Australian publishers joined the project at launch in early February. One of the country's biggest media companies, Seven West Media, has since signed up too. But confidentiality agreements prevent them from revealing how much Google pays them. The Australian Financial Review has reported that the publications will be paid between AU$200,000 and AU$2 million (US$150,000 to US$1.5 million). In France, 90 million euros (US$109 million) will be split between 120 publications over three years, according to the Sydney Morning Herald.
