WASHINGTON, D.C. (January 22, 2021)—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”.
Though Australia is far from Google’s largest market, the proposed news code is seen as a possible global test case for how governments could seek to regulate big tech firms.
Australia’s 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.
“It’s going to go worldwide. Are you going to pull out of every market, are you? Is this about stopping the precedence?” asked Senator Rex Patrick.
Ms Silva replied that the code was “an untenable risk for our Australian operations”.
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.
Australian print media has seen a 75% decline in advertising revenue since 2005, according to the government.
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.
Market Watch wrote “the House Judiciary Antitrust, Commercial and Administrative Law Subcommittee has held hearings for more than a year to investigate the business practices of Amazon.com Inc. AMZN, Apple Inc. AAPL, Facebook Inc. FB, and Google parent Alphabet Inc. GOOGL GOOG Last week, the Judiciary subcommittee held its seventh and final hearing, and issued a withering report on the companies’ actions Tuesday.”
“To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” Rep. David Cicilline, D-R.I., chairman of the House Judiciary Antitrust, Commercial and Administrative Law Subcommittee, said in a statement accompanying the report. “Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, and Google has come at a price.”