The giants don't care: Google v Australia

Google is threatening to shut down its search engine in Australia over a proposed media law.

Google said last month that it may stop delivering search results in Australia after the government introduced a new media bill that requires digital platforms to pay publishers to link their content in news feeds or search results.

Essentially, Australia wants internet giants like Facebook and Google, to pay to display and link to news generated by Australian journalists.

If Google does exit from Australia, it would deny more than 25 million people access to the world’s most popular search engine, which handles almost 95% of the country’s daily searches.

Morrison vs Google

Prime Minister, Scott Morrison told reporters last month: “Australia makes our rules for things you can do in Australia. It’s done in our parliament and that’s how things work here. People who want to work with that in Australia, you’re very welcome.”

“But we don’t respond to threats.”

Tempers have since cooled, with Morrison engaging in a “constructive” conversation with Google CEO Sundar Pichai last week.

Morrison said Google raised specific aspects of the media bargaining code and the discussions touched on the company’s ability to continue providing services in Australia.

A Google spokesman said in a statement that the search engine’s exit from Australia would be a “worst case scenario”.

“We remain committed to reaching a solution for a workable Code, as we have been throughout this whole process.”

Opposing views

Not all publishes agree with Australia’s proposed media law.

The editorial boards of Bloomberg and the Financial Times have argued that news publications get more from Google and Facebook, through search engine and social media traffic, than the platforms get from the publications.

And what happens to smaller publications? Last year, ten local lifestyle and news websites, including youth website Junkee Media, lifestyle sites Broadsheet Media, Concrete Playground and Urban List, wrote a statement to the ACCC outlining concerns with the Code, explaining that smaller publishers would find it more difficult to compete with Nine or News Corp if they lost the traffic Google and Facebook provide.

“We are concerned that the current proposal has potential to just further entrench the large traditional media companies and accidentally destroy media diversity in the process”, they added.

Microsoft is ready to fill the void

Microsoft President, Brad Smith slammed Google’s threat to withdraw from Australia.

“Microsoft would never threaten to leave Australia and supports the plan to make digital platforms pay for news”

Microsoft CEO, Satya Nadella spoke with Morrison a few weeks ago and, based on that conversation, Scott Morrison told reporters that Microsoft was “pretty confident” of filling the massive void that would be left by Google if it withdraws its search engine from Australia.

The fallout between Google and Australia gives Microsoft a great opportunity to capitalize. Google currently leads search in the country with its 94.5% market share, while Microsoft’s Bing holds just 3.6%.

A decision

The treasurer, Josh Frydenberg, and the communications minister, Paul Fletcher, said in a statement the legislation would be debated in parliament commencing 15 February.

“The government expects all parties to continue to work constructively towards reaching commercial agreements in the spirit of collaboration and good faith encouraged by the code,” they said.

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