Big tech is accused of ‘blackmail’ after Google threatens to remove search function and Facebook warns it will pull news from Australia if law forcing them to pay media companies for content is passed

Google has threatened to remove its search function in Australia and Facebook warned it would pull news content if a new law requiring the tech giants to compensate media organisations is passed. 

The proposed law, introduced to the Australian Parliament in December, will force Facebook and Google to negotiate fees with news companies whose stories appear on their platforms. 

The world-first code states that if a negotiation breaks down then an independent umpire will step in and decide the fee based on a ‘final offer’ method, which chooses one side’s position as the resolution.  

Google and Facebook are fighting the code, claiming it is ‘unworkable’ and poses an existential threat to their business models.  

Australia’s battle with Big Tech is being keenly watched by governments across the world, not least in London, Washington DC and Brussels, where concerns have been raised over the ‘advertising duopoly’ of Google and Facebook. 

Australian regulators found that for every $100 spent on digital advertising, $53 goes to Google, $28 to Facebook and only $19 goes to others. 

Google turns over $4.9billion in Australia, with $4.3billion of that from advertising – while many Australian publishers are struggling to make money. The company only paid $59million in Australian corporate tax last year. 

In a hostile public hearing before senators on Friday, Mel Silva, the Managing Director of Google Australia and New Zealand, said the company may be forced to pull its search function out of Australia if the code goes ahead.

‘The principle of unrestricted linking between web sites is fundamental to search and, 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,’ she said.

‘That would be a bad outcome for us but also for the Australian people, media diversity and the small businesses who use our products every day.’

Prime Minister Scott Morrison hit back, saying Google will have to respect the law.

‘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. And people who want to work with that, in Australia, you’re very welcome – but we don’t respond to threats,’ he told reporters on Friday afternoon.

Via – The Daily Mail UK

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