Google’s threat to pull search engine draws testy response in Australia

WELLINGTON, New Zealand —  Google on Friday threatened to make its search engine unavailable in Australia if the government goes ahead with plans to make tech giants pay for news content.

Australian Prime Minister Scott Morrison quickly hit back, saying: “We don’t respond to threats.”

“Australia makes our rules for things you can do in Australia,” Morrison told reporters in Brisbane. “That’s done in our Parliament. It’s done by our government. And that’s how things work here in Australia.”

Morrison’s comments came after Mel Silva, the managing director of Google Australia and New Zealand, told a Senate inquiry into the bill that the proposed new rules would be 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,” Silva told senators. “And that would be a bad outcome not only for us but also for the Australian people, media diversity and the small businesses who use our products every day.”

Although Australia is a small market for Google compared to countries such as the U.S., larger nations are watching the dispute with interest.

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The mandatory code of conduct proposed by the Australian government aims to make Google and Facebook pay Australian media companies fairly for using news content that they siphon from news sites.

Silva said it was willing to pay a wide and diverse group of news publishers for the value they added but not under the rules as proposed, which include payments for links and snippets.

She said the code’s “biased arbitration model” also posed unmanageable financial and operational risks for Google, and she suggested a series of tweaks to the bill.

“We feel there is a workable path forward,” Silva said.

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As in many other countries, Google dominates internet searches in Australia. Silva told senators that about 95% of searches in the nation are performed through Google.

Asked by one senator how much tax it pays, Silva said last year it paid about $46 million on revenues of $3.7 billion.

Facebook also opposes the rules and has threatened to remove news stories from its site in Australia. Simon Milner, a Facebook vice president, said the sheer volume of deals it would have to strike with publishers would be unworkable.

The Australia Institute, an independent think tank, said lawmakers should stand firm against what it called Google’s bullying.

“Google’s testimony today is part of a pattern of threatening behavior that is chilling for anyone who values our democracy,” said Peter Lewis, the director of the institute’s Center for Responsible Technology.