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.
But the US firms have fought back, warning the law would make them withdraw some of their services.
Australian PM Scott Morrison said lawmakers would not yield to „threats“.
Australia is far from Google’s largest market, but the proposed news code is seen as a possible global test case for how governments could seek to regulate big tech firms.
Tech firms have faced increasing pressure to pay for news content in other countries, including France, where Google struck a landmark deal with media outlets on Thursday.
In Australia, the proposed news code would tie Google and Facebook to mediated negotiations with publishers over the value of news content, if no agreement could be reached first.
Google Australia managing director Mel Silva told a Senate hearing on Friday that the laws were „unworkable“.
„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.
But lawmakers challenged this, accusing Google of „blackmail“ and bullying Australia for raising the reform.
Mr Morrison said his government remained committed to progressing the laws through parliament this year.
„Let me be clear: Australia makes our rules for things you can do in Australia. That’s done in our parliament,“ he told reporters on Friday.
Why is Australia pushing this law?
Google is the dominant search engine in Australia and has been described by the government as a near-essential utility, with little market competition.
The government has argued that because the tech platforms gain customers from people who want to read the news, the tech giants should pay newsrooms a „fair“ amount for their journalism.
In addition, it has argued that the financial support is needed for Australia’s embattled news industry because a strong media is vital to democracy.
Media companies, including News Corp Australia, a unit of Rupert Murdoch’s media empire, have lobbied hard for the government to force tech firms to the negotiating table amid a long-term decline in advertising revenue.
Meanwhile, Google’s revenues have increased markedly in the same period, amounting to more than $160bn (£117bn) globally in 2019. In the same year, Google was reported to have made $3.7bn in gross revenue in Australia.
Of that revenue, $7.7m was generated from news content, Google said in a blog last year.
Google’s threat to remove its entire search product is its most severe yet. News accounts for just 12.5% of Google searches in Australia, according to lawmakers.
If the law is passed, the news code would initially apply only to Facebook and Google, the government says.
If Google withdrew its search engine, Australian internet users would be forced to use alternatives such as Microsoft’s Bing, DuckDuckGo and Yahoo!