Google's threat escalates a battle with publishers such as
News Corp that is being closely watched around the world. The search giant had
warned that its 19 million Australian users would face degraded search and
YouTube experiences if the new code were enforced.
Australia is on course to pass laws that would make tech
giants negotiate payments with local publishers and broadcasters for content
included in search results or news feeds. If they cannot strike a deal, a
government-appointed arbitrator will decide the price.
"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,"
Mel Silva, managing director for Australia and New Zealand, told a senate
committee.
Silva made no mention of YouTube in prepared remarks.
Google's comments drew a sharp rebuke from Australian Prime
Minister Scott Morrison who said the country makes its rules for "things
you can do in Australia."
"People who want to work with that in Australia, you're
very welcome. But we don't respond to threats," Morrison told reporters.
Google has called the code overly broad and said that
without revisions, offering even a limited search tool would be too risky. The
company does not disclose sales from Australia, but search ads are its biggest
contributor to revenue and profit globally.
The United States government this week asked Australia to
scrap the proposed laws, which have broad political support, and suggested
Australia should pursue a voluntary code instead.
Australia announced the legislation last month after an
investigation found Google and social media giant Facebook held too much market
power in the media industry, a situation it said posed a potential threat to a
well-functioning democracy.
Google's threat to limit its services in Australia came just
hours after the internet giant reached a content-payment deal with some French
news publishers as part of three-year, $1.3-billion push to support publishers.
Google's testimony "is part of a pattern of threatening
behavior that is chilling for anyone who values our democracy," said Peter
Lewis, director of the Australia Institute's Centre for Responsible Technology.
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