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Business Maverick: Google Threatens to Remove Search in Australia as Spat Escalates

Google threatened to disable its search engine in Australia if it’s forced to pay local publishers for news, a dramatic escalation of a months-long standoff with the government.

The proposed law, intended to compensate publishers for the value their stories generate for the company, is “unworkable,” Mel Silva, managing director for Australia and New Zealand, told a parliamentary hearing Friday. She specifically opposed the requirement that Google pay media companies for displaying snippets of articles in search results.

Google Sees Deal Within Reach on World-First Law to Pay for News

The threat is Google’s most potent yet as the digital giant tries to stem a flow of regulatory action worldwide. At least 94% of online searches in Australia go through the Alphabet Inc. unit, according to the local competition regulator.

“We don’t respond to threats,” Australia Prime Minister Scott Morrison said Friday. “Australia makes our rules for things you can do in Australia. That’s done in our parliament. It’s done by our government. And that’s how things work here in Australia.”

Facebook Inc., the only other company targeted by the legislation, also opposes the law. The social media platform reiterated at Friday’s hearing it’s considering blocking Australians from sharing news on Facebook if the law is pushed through.

Facebook Sends World a Warning With Threat to Australian News

The legislation is designed to support a local media industry, including Rupert Murdoch’s News Corp., that has struggled to adapt to the digital economy. Google’s tougher stance drew rebukes from lawmakers at the hearing. Senator Andrew Bragg accused the tech giant of trying to “blackmail” Australians and policymakers.

“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 told a panel of senators. She described the law as an “untenable financial and operational precedent.”

Mountain View, California-based Google on Thursday reached a deal with French media publishers after the country’s competition authority urged it to pay for content. It had stopped showing news results from European publishers on search results for French users last year, in order to comply with copyright laws.

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