Global tech

Google threatens to turn off ‘google’ in Australia if the government forces it pay for news

- January 22, 2021 3 MIN READ
Google Australia’s managing director, Mel Silva, has told a Senate hearing into plans to force the global tech giant, as well as Facebook, to pay media companies for news, that it will turn off Google searches in Australia if the government passes the laws.

Treasurer Josh Frydenberg tabled what’s known as the news media bargaining code in Parliament late last year. Public hearings by a Senate committee into the proposed laws got underway in Canberra today, with Silva as the first witness to appear before the committee. Representatives from Facebook, the major commercial media companies, ABC and ACCC are also appearing before the inquiry today.

Google has been running a very public campaign against the code since August last year, using links at the bottom of its search page to mount a series of arguments against the laws, kicking off with an open letter that said “The way Aussies search every day on Google is at risk from new Government regulation”. 

Google has also argued the laws will damage its subsidiary, YouTube.

Internet pioneers such as web inventor Sir Tim Berners-Lee, and the man dubbed the “father of the internet”, Vint Cerf, have spoken out against the Morrison government’s plan.

This morning Silva repeated the company’s arguments that the code was unworkable and would “break” its business model, ramping up the company’s threats to abandon Australia in “worst case scenario”.

“We have had to conclude after looking at the legislation in detail we do not see a way, with the financial and operational risks, that we could continue to offer a service in Australia,” she said.

“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 it was “not a threat. It’s a reality”.

She argued that the code would set a “dangerous precedent” when it comes to paying for links.

Guardian journalist Josh Taylor noted a certain irony in that argument.

Silva told the inquiry that the company would have “no real choice but to stop making Google Search available in Australia” because of “the unmanageable financial and operational risk if this version of the code were to become law”, adding that withdrawing services was “the last thing that Google would want”.

Another reason why is it would potential be an expensive decision for Google, which likely generated more than $5 billion in revenue in the Australian market in 2020.

In the 2019 calendar year, Google Australia had $4.8 billion in gross revenue in Australia, including $4.3 billion of it was advertising and “other reseller revenue”, up 16% on 2018’s figure, but reported only $1.2 billion in revenue in financial statements lodged with the corporate regulator ASIC.

Google’s Australian arm is a sales agent for Singapore-based Google Asia-Pacific used to “facilitate the sale of advertising”.

Subsequent to Silva’s appearance, Google Australia published a new blog titled “8 Facts about Google and the News Media Bargaining Code“, to reiterate and reinforce the MD’s comments before the Senate.

In it the company argues:

“Paying for links and snippets undermines the basic principle of the internet––the ability to freely link between websites. Just like you don’t pay to include a hyperlink in an email, websites and search engines do not pay to provide links to third party websites. It would be like requiring the telephone directory to pay businesses to be able to include them—it simply makes no sense.”

Google says it remains committed to working with the Government to achieve a workable Code.

“However, the principle of unrestricted linking between websites is fundamental to the web and to Search. 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,” the company says.

“That’s a worst-case scenario and the last thing we want to have happen—especially when there is a way forward to a workable Code that allows us to support Australian journalism without breaking Search.”

Google says it’s seeking “reasonable amendments” to the Code to provide “a framework in which Google can pay publishers for value under the Code without undermining Google search and the fundamental importance of linking freely”.