Google has threatened to shut down its search engine in Australia if the government there passes a new law to force big tech companies to pay local news producers for use of their content. The proposed Australian legislation, known as the News Media Bargaining Code, is the first of its kind in the world, and it's being seen as a test case of the power governments have to regulate big tech firms.
"If the Code were to become law in its current form, we would have no real choice but to stop making Google Search available in Australia," Mel Silva, managing director of Google Australia, said in a statement.
Facebook said it would allow Australian users to remain on its platform, but if the proposed law is passed, it would no longer provide news.
Under the proposed Australian law, Google and Facebook would be forced to pay news publishers for their content and agree on a fair price or the matter would be settled by an independent arbitration body that would decide the amount.
"Google and Facebook like to do things on their terms," Rod Sims, chairman of Australia's consumer protection regulator, told a recent Senate hearing.
Sims said that while it would be in the interest of both parties to work out deals on their own, the ability of the smaller local news companies to go to an arbitrator rather than to court if they feel they're being unfairly treated "is what really gives strength to the bargaining for the news media businesses."
The law would also require that Google and Facebook alert publishers of deliberate changes to their algorithms that would significantly affect their businesses 14 days before they're implemented.
The Australian government argues that a strong news media is vital to democracy and that, as news publishers struggle to survive, platforms like Google and Facebook are making money off of people looking for news at the expense of the companies that produce it.
Google says the proposed law, if passed in its current form, would render its business model unworkable.
"If the law requires Google to pay to link people to websites, it's a slippery slope. After all, if one type of business gets paid for appearing in Search, why shouldn't others?" Silva said.
The man who founded the World Wide Web, Tim Berners-Lee, also weighed in on the debate, submitting written evidence to an ongoing Senate hearing arguing the law could undermine the internet itself.
"The code risks breaching a fundamental principle of the web by requiring payment for linking between certain content online," Berners-Lee said. "The ability to link freely, meaning without limitations regarding the content of the linked site and without monetary fees, is fundamental to how the web operates."
But Sims said Berners-Lee and Google were misinterpreting the law.
"The code does not require Google and Facebook to pay for linking news content," Sims said. "Indeed, discussions we are aware of have focused on paying upfront lump sum amounts, not per click."
Other advocates for the new law argue that Google does more than simply offer links to other websites: that it presents links in a certain way and then tracks engagement to optimize its own advertising revenue.
"Google execs are fearful about the precedent these new laws could have," BBC technology reporter James Clayton said. "Google has had a very profitable pandemic so far, whilst many local newspapers have struggled. That doesn't look good, and Australian politicians aren't the first, and won't be the last, to point that out."
"It's going to go worldwide," Australian Senator Rex Patrick predicted in the Senate hearing. "Are you going to pull out of every market? Are you? Is this about stopping the precedent?"