Google says it will block the search engine in Australia if forced to pay for the news

SYDNEY (Reuters) – Alphabet Inc’s Google said Friday it will block its search engine in Australia if the government moves forward with new code to force it and Facebook Inc to pay media companies the right to use their content.

The threat from Google escalates a battle with publishers like News Corp who are closely followed around the world. The search giant had warned that its 19 million Australian users would face degraded YouTube searches and experiences if the new code was applied.

Australia is in the process of passing laws that would have the tech giants negotiate payments with local publishers and broadcasters for content included in search results or news feeds. If they fail to strike a deal, a government-appointed arbitrator will decide the price.

“Coupled with the unmanageable financial and operational risk if this version of the Code becomes law, it would give us no choice but to stop making Google Search available in Australia,” said Mel Silva, chief executive for Australia and New Zealand on a Senate committee.

Silva made no mention of YouTube in the prepared remarks, as the video service is expected to be exempted based on code reviews last month.

Google’s comments have drawn a strong rebuke from Australian Prime Minister Scott Morrison said the country sets its own rules for “the things you can do in Australia”.

“People who want to work with this in Australia, you are welcome. But we don’t respond to threats, ”Morrison told reporters.

During the investigation, Australian Competition and Consumer Commission chairman Rod Sims, who oversaw the new rules, said he couldn’t predict what the tech giants would do, but said “there is always a risk of risk in serious negotiations “.

“They talk about trade deals where they have full control of the deal,” he said. “In my opinion, it’s not a commercial deal.”

Google called the code overly broad and said that without revisions, offering even a limited search tool would be too risky. The company does not disclose sales from Australia, but search ads are its biggest contributors to revenue and profits globally.

The US government this week called on Australia to abolish the proposed laws, which have broad political support, and suggested that Australia should pursue a voluntary code instead.

Australia announced the legislation last month after an investigation uncovered Google and the social media giant Facebook he held excessive market power in the media industry, a situation which he believed posed a potential threat to a well-functioning democracy.

Google’s threat to restrict its services in Australia came just hours after the internet giant reached a content payment deal with French news publishers as part of a three-year $ 1.3 billion push to support from publishers.

Google’s testimony “is part of a threatening pattern of behavior that is chilling to anyone who appreciates our democracy,” said Peter Lewis, director of Australia Institute’s Center for Responsible. Technology.

Renju Jose reporting; Editing by Byron Kaye and Gerry Doyle