Google has threatened to remove its search engine from Australia and Facebook has threatened to remove news from its feed for all Australian users if a code forcing the companies to negotiate payments to news media companies goes ahead.
The move would mean the 19 million Australians who use Google every month would no longer be able to search, and 17 million Australians who log into Facebook every month would not be able to see or post any news articles.
The two companies are fighting against legislation currently before the parliament which would force the digital platforms to enter into negotiations with news media companies for payment for content, with an arbiter to ultimately decide the payment amount if no agreement can be reached.
On Friday, Google delivered an ultimatum to the government, saying it would not be viable to continue offering search in Australia if the code goes ahead.
The company’s Australian managing director, Mel Silva, told a Senate committee the proposed news code was untenable and would set a “dangerous precedent” for paying for links.
“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,” she said.
“Withdrawing our services from Australia is the last thing that Google want to have happen, especially when there is another way forward.”
Silva said the company wanted to make changes to the code to make it “workable”, and the company was keen to enter into agreements with media companies to pay for content, pointing out around 450 deals have been made with media companies around the world.
Prime minister Scott Morrison said at a press conference in Brisbane the government would not respond to threats.
“Let me be clear. Australia makes our rules for things you can do in Australia. That’s done in our parliament. It’s done by our government. And that’s how things work here in Australia and people who want to work with that, in Australia, you’re very welcome.
“But we don’t respond to threats.”
Representatives from Facebook repeated the company’s previous threat to pull news content from user feeds. Josh Machin, Facebook’s head of public policy in Australia, said if the code goes ahead, Facebook would potentially prevent not just news companies from posting links to news articles on Facebook, but all users based in Australia.
Machin said news articles make up under 5% of what the average user sees in their feed, and Facebook did not get much commercial benefit from news articles posted on Facebook.
When asked whether Facebook profited from fake news posted on the platform, Machin said no commercial benefit was gained by Facebook on its users posting fake news.
Guardian Australia managing director Dan Stinton told the committee the claims were misleading because news content keeps users engaged on Facebook.
“The way you advertise on Facebook is within the Facebook newsfeed and news content does provide at least some of the engagement that the Facebook newsfeed delivers,” he said.
“So I’m surprised that they say, they see no value in journalism within the Facebook newsfeed.”
Senators repeatedly questioned Silva about what they said was a threat, asking whether it was simply about avoiding the precedent it would create worldwide for paying for news in search results.
Silva denied it was a threat, just the “worst case scenario” if the code went ahead.
Independent senator Rex Patrick compared Google’s threat with China threatening Australia’s trade in response to the inquiry into Covid-19. He said Google’s response was not about “breaking” search, but Google protecting its revenue.
“It’s about breaking your bank account, that’s what this is about,” he said. “It does not touch the the internet and the way in which it works.” he said.
Silva told the hearing that last year Google paid $59m in tax on profits before tax of $134m, and $4.8bn in revenue in Australia.
Google paying Twitter to advertise a link to an article of ours on someone against the code that would require them to pay for links to articles. pic.twitter.com/Q8ncqfPKjw
— Josh Taylor (@joshgnosis) January 21, 2021
Facebook has called the code unworkable in its current form, and has asked for digital platforms to be given six-months’ grace to negotiate deals with news companies directly before being hit with the “big stick” of the mandatory code.
Stinton told the committee that the code is a “pragmatic way” to facilitate negotiations between news media and the digital platforms, and argued the claim of opponents that the legislation would break an open internet ignored the internet had changed.
“Opponents of the code are defending an open internet that ceased to exist years ago, and instead has become dominated by a small number of very, very large US tech companies,” he said.
“In fact, Google and Facebook are the internet for most Australians, or at least the key gateway to it. Google has a monthly audience of 19 million, and Facebook of 17 million.
“Where people go online is largely determined by these two companies’ algorithms.”
Nine has argued the digital platforms need to be regulated because they are monopolies within Australia, and should pay for news content because “access to news content drives credibility for and value of the platforms”.
Newswire service AAP has said it supports the code, but notes that as a wholesale news provider it would not directly benefit from the code so would need other government support.
A poll released on Friday morning found three in five Australians believe social media companies should prioritise news websites in news feeds.
Dynata polled 1,003 people on 14 and 15 January on behalf of the Australia Institute and found 62% of people agreed social media companies should prioritise journalism in user feeds, and 84% agreed they should be transparent about how their algorithms influence user feeds, and should take steps to stop the spread of misinformation.
The poll found 75% believed anonymous accounts should be banned, but people aged over 60 were much more likely to call for a ban on anonymous accounts (88%) compared with those 18 to 29 (59%).