Google has made clear its position on Australia’s potential new law that it would force the company to pay news publishers for the right to link to their content.
At an Australian parliamentary hearing, the managing director of Google Australia and New Zealand told the senators that the potential law “would give us no real choice but to stop making Google Search available in Australia”. This threat came in the same week that Google agreed to a deal with publishers in France to pay for links to news sites.
But could Google afford to go through with its threat to the Australian parliament?
What Is Australia’s New Potential Law?
The bill, known as the “Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020”, was introduced to the Australian parliament in December 2020. This bill proposes that Google would be forced to pay news publishers to link to their content, or to show this content through Google searches. Google would be forced to negotiate payments with these news publishers, but if Google and a news publisher cannot agree on a price, then an independent arbitration panel would make a final decision on the payment.
This independent arbitration panel is one of the main differences between a similar law passed in France, and the opposed law in Australia. Google fears that this panel could be heavily biased towards Australian businesses, therefore forcing Google into unfair positions.
This bill would not only affect Google, but also other sites that use snippets of content from news publishers. One such site is Facebook, which also opposes this bill.
How Big Is Google In Australia?
Globally, around 88% of search engine traffic comes from Google. This is thought to be marginally higher in Australia, with almost 90% of search engine traffic coming from Google.
According to the web traffic analysis company Alexa, google.com is ranked as the most visited site in Australia. The Australian variant, google.com.au, is ranked 4th. The closest ranked search engine to Google is Yahoo in 10th, with Bing all the way down in 47th. Google is therefore clearly the most popular search engine in Australia.
In the 2019 calendar year, Google posted a record of $4.8 billion in revenue in Australia (approximately 3% of its worldwide revenue), of which $4.3 billion was from advertising revenue. However, this only resulted in a pre-tax profit of $134 million, which then resulted in $59 million in income tax. Thus, overall, Google took a profit of under $100 million.
Can Google Really Block Australians?
There are several possibilities if Google were to block Australians. At the simplest level, any Australian Google user could be redirected to another version of Google such as the New Zealand (due to proximity) or American (due to prevalence) versions. While Australians would still be able to use the search engine, this would remove some of the localised search results.
If Google wanted to go further, they could block Australian users based upon their IP (internet) address. This method could stop many Australians from using the search engine altogether, but it can still be bypassed with a Virtual Private Network (VPN). VPNs are commonly used in some countries to access blocked content, so it would not be unexpected for Australians to do the same.
While these technological blocks are possible, the bigger worry would be for Google to lose its dominant market-leading position in Australia. If Australians were to suffer no ill-effects from the bill, then it could pave the way for other countries to follow. This outcome would weaken Google’s standing and could force the business to cave into greater demands at a later stage.
What Will Happen To Other Google Services?
Google has grown to become a large presence in the online world. Other Google products available include Google Ads, Gmail, Google Drive, Google Maps, the Google Chrome web browser, and YouTube. Google is also the developer of the largest mobile phone operating system, Android. It is not yet known what could happen to these other services if Google were to go through with its threat to pull its search engine operations out of Australia. The statement only mentions Google Search by name, but any escalation from the Australian side could see retaliation from Google.
Many of Google’s other products are not specific to Australia or closely linked to Google Search, and so blocking Australian access to them would rely on the IP address blocking method, which can still be bypassed. However, some products such as Google Images, Google Scholar, and Google Books are much more closely tied to Google Search and so could also be brought offline in the country.
What Are Others Saying About The Disagreement?
In a reply to the statement by Google, Australian Prime Minister Scott Morrison has been quoted as saying “we don’t respond to threats”.
Sir Tim Berners-Lee, the creator of the world wide web, expressed his concern “that the Code risks breaching a fundamental principle of the web by requiring payment for linking between certain content online”.
In its submission to the committee, Facebook confirmed that it is still willing to pay Australian news publishers for content available on its platform, and already has agreements with many Australian news organisations. However, it criticised the proposed law for “compelling Facebook to pay for news content in a way that is not connected to commercial reality”.
In a much shorter submission, Twitter expressed its commitment to working with the Australian Government on the issue.
What Will Happen Next?
The Australian parliamentary committee that is dealing with the bill is expected to release a report on its findings before Friday 12th February 2021, in just over 2 weeks. Until then, the war of words between the Australian Government and Google is expected to continue.
It is too soon to speculate what will happen to the bill after the release of the report, but with neither side likely to back down any time soon, we can be certain that this saga is not yet over.
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