Why Google Is Threatening To Deprive Australians Of Its Search Engine

Alphabet Inc GOOGL GOOG subsidiary Google will withdraw its search feature in Australia if the country’s government goes ahead with implementing a law that would force the tech giant and Facebook Inc FB to pay local media for their content, Reuters reported Friday (Sydney time). 

What Happened: The Mountain View, California company’s managing director for Australia and New Zealand, Mel Silva, told a committee of the Australian Senate that the law’s “arbitration model with bias criteria presents [an] unmanageable financial and operational risk for Google.”

“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,” said Silva.

The comments evoked fierce criticism from Prime Minister Scott Morrison who said the country makes 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,” said Morrison.

Why It Matters: Australia is due to pass the laws which single out Google and Facebook for paying local media for sharing their content, as per Reuters. Should the tech giants fail to do so, they face hefty fines.

See Also: Facebook Won't Let Australians Share Any News, If It's Forced To Share Revenue

The United States government asked Australia to abandon the proposed legislation in favor of a voluntary code this week, noted Reuters.

Price Action: Alphabet Class A and Class C shares closed nearly 0.2% higher at $1,884.15 and $1,891.25 respectively on Thursday. The Class A shares gained 0.27% in the after-hours session, while the Class C shares were up 0.33%.