Google today threatened to withdraw its search engine from Australia if the government proceeds with its attempt to force the tech giant to pay publishers for using their news content.

Facebook also reiterated its threats to remove all Australian news content from the platform for local users if the code is not changed.

The news media bargaining code allows news publishers to negotiate payment from the platforms for the use of their content. The code includes forced final offer arbitration, which is hoped to be a “backstop” for negotiations ideally done in good faith.

The government says the code is a way of levelling the playing field with the platform giants which now take 81 per cent of digital advertising dollars.

Both Google and Facebook have railed against the code, claiming it would be unworkable and a threat to the open internet. 

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During a Senate committee hearing Friday for the proposed media laws, Google’s Australian managing director, Mel Silva said the search giant would have no option but to pull its flagship service from local users if the code goes ahead.

“The principle of unrestricted linking between websites is fundamental to search and coupled with the unmanageable financial and operational risk is 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.

“Withdrawing our services from Australia is the last thing that Google wants to have happen, especially when there is another way forward.”

Silva pushed for Google’s alternative: paying publishers for content used on Google’s News platforms. Silva denied her “worse case scenario” of shutting down search was a threat.

Google Australia Managing Director Mel Silva appears before the committee via video link.

Silva has previously suggested Google’s free services were at risk in Australia by the code, which the search giant argues is “unworkable” in its current form despite several concessions to the tech giants.

Publishers push back

Executives from News Corp, Nine, and Guardian Australia later appeared at the hearing, supported the code and depicted the tech giants as unfair gatekeepers of the internet with monopoly power.

The publishers rejected arguments they were being fairly disrupted by faster moving tech companies.

“If you rewind from 2013 to today, the digital advertising revenue of The Sydney Morning Herald, The Age and the Financial Review has halved,” Nine’s chief digital and publishing officer Chris Janz told the committee.

“And it’s halved because we’re competing against monopolies that control access to the internet and the advertising ecosystem around the internet, and the data that exists around the internet.

“We are not afraid to adapt, we’re not afraid to change. But we believe the journalism we produce is critical to a functioning democracy and a functioning society. And if we accept for one minute that Google and Facebook can be unregulated monopolies that don’t contribute to the cost of the content they’ve used to build their businesses, I think it leads to a terrible outcome for Australia.”

Facebook and Google insist the news content shared on their platforms generate relatively little revenue for them, and is outweighed by the exposure and clicks it sends back to the publishers. Publishers, however, insist the content also drives engagement and credibility for the platforms, as well as generating more user data to be used in the online advertising ecosystem they dominate.

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