Google Threatens to Pull Search Out of Australia Over Proposed Link Tax Law

Google says that is might pull search out of Australia over the link tax law after all. Treasurer, Josh Frydenberg, says that the tech companies will pay anyway.

History continues to march towards repeating itself. For more than a year, Australia has been pushing for a new link tax law. The idea is that aggregators must pay a license fee for the privilege of linking to news sources. The rush to make these link tax laws a reality is pushed by the major publishing corporations. While some have pushed the false conspiracy theory that aggregators are stealing from them, the reality is that the big publishers are actually demanding a free ride from aggregators to make up for lost revenue the aggregators had nothing to do with.

A similar effort had been tried before in Spain. After getting the disastrous laws in place, Google pulled out of the country. The result is that, for publishers, traffic plummeted and revenue took a massive hit. The end result is that publishers begged for Google to return.

This brings us back to Australia which seems to be the one jurisdiction where the Link Tax law has the best chance of being passed. After all, this is the same country that decided to effectively ignore all evidence and outlaw encryption and gut their whole security sector in the process. With that and the fact that Australian lawmakers have been so open to the idea of further crippling the tech sector, the Link Tax still has some life in the land down under.

Facebook, for its part, was quick out of the gate. By September of 2020, they were already threatening to pull out of the country. Clearly, Facebook isn’t messing around here. They know that pulling out of Australia will punish big publishing far more than Facebook. Still, many in the sector weren’t keen on just giving up on the country. Many in the community tried outlining and urging the country to not take this suicidal step. Unfortunately, signs appeared by December that their reasoning is having little effect. Word came out that Australia is still pushing ahead with the link tax law.

Now we are seeing signs that even Google is starting to be unable to find the patience for the situation. Google is now admitting that they might pull their search engine out of Australia altogether. From Ars Technica:

Google says it would have “no real choice” but to shut down its search engine in Australia if Australia passes a new law requiring Google to pay news sites to link to their articles. This would “set an untenable precedent for our business and the digital economy,” said Google’s Mel Silva in Friday testimony before the Australian Senate.

You might think that Google would simply stop linking to Australian news sites. But that won’t be allowed under the ACCC proposal. New non-discrimination rules require Google to treat sites the same whether or not it has to pay to link to them.

Australia’s proposal has provoked a broad backlash from advocates of the open Web—including the inventor of the Web itself. In a letter to the Australian Senate earlier this week, Tim Berners-Lee argued that Australia’s proposal would set a damaging precedent.

“To my knowledge, there is no current example of legally requiring payments for links to other content,” Berners-Lee said. “The ability to link freely—meaning without limitations regarding the content of the linked site and without monetary fees—is fundamental to how the Web operates.”

The threat to pull out of Australia has apparently upset lawmakers. Treasurer, Josh Frydenberg, says that Google will pay no matter what. From The Guardian:

Josh Frydenberg has warned the internet giants it is “inevitable” they will pay for news content and their threats to shut down core functions in Australia do them a “big disservice”.

The threats follow the revelation that Google has been experimenting with hiding some Australian news sites from search results, in a move media outlets said was a show of “extraordinary power”.

Frydenberg told reporters in Melbourne the government had worked with the Australian competition regulator for two years developing the code to “see the digital giants pay for original content that is generated by our media businesses”.

Frydenberg accused the tech companies of “changing the goalposts” by first opposing the government’s proposal of final offer arbitration and now opposing paying for clicks on media content displayed in search results.

He said “if the clicks for media content is such a small proportion of their overall clicks on the search” that would be reflected in the payment determined by the independent arbiter.

Frydenberg noted the government’s position was supported by media companies and public polling, after a Dynata poll conducted for the Australia Institute’s Centre for Responsible Technology found that four in five respondents found it “disturbing” that Australian results could be removed from news feeds.

“It seems that digital giants did themselves a big disservice last week when they very openly and publicly threatened the Australian public with pulling out of Australia effectively with search if legislation proceeds as it currently stands,” Frydenberg said.

Google did offer clarifying comments about the situation on Ars Technica:

Our issues with the current version of the Australian Code are not about money, we’re willing to pay. It’s about being asked to pay for links and snippets which EUCD (and the French transposition) does not. This is where we draw the line. Links and snippets are the building blocks of the free and open web. To pay publishers in Australia, we’re proposing to do the same thing we’re doing in France – to pay publishers for value with News Showcase. The difference would be that News Showcase would operate under the Code, that means publishers can go to arbitration on News Showcase to solve any disagreements.

The way all of this is headed suggests that things only stand to get uglier at this point. Google’s threat would suggest that the situation is increasingly going sideways already. With the government not budging on this alternative reality, how can one not see Google following through with their threat at this point?

Drew Wilson on Twitter: @icecube85 and Facebook.

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