Google threatens to leave Australia: why the search engine could pull its services - and who might fill the void

Australia’s PM Scott Morrison looks to get to grips with big tech firms, including Google and Facebook, displaying local journalism

A power struggle has broken out between Google and Australian lawmakers, which could see the tech giant remove some of its services from the country.

Australia is looking at introducing a new piece of legislation which would see firms like Google share royalties with news publishers for content displayed on its sites.

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Google has made a bullish response while Australia’s PM Scott Morrison said he would not yield to "threats", as the two sides go toe-to-toe over an issue involving large sums of money.

Google and the Australian government are in talks over new tech rules. (Pic: Getty Images)

The saga took another twist when Mr Morrison revealed Microsoft was “pretty confident” it could fill the void with its search tool Bing, if Google did pull some of its services.

Here's what you need to know.

Why is Australia taking on Google?

Australia wants Google and other tech companies to start paying media outlets for news content, which is freely available through the search engine application and social media sites.

Google dominates the search engine market, boasting more than 90 per cent of the market share, with the vast majority of its revenue coming from advertisers.

Around 12.5 percent of customers using Google search for news, while the government remains committed to progressing the law through parliament this year.

What impact could this have on the news industry?

Meanwhile, the news industry is in desperate need of financial support at a time when some would argue it's needed the most amid a global pandemic, after a general decline in advertising revenues.

Australia's print media alone has seen a 75 percent reduction in advertising revenue over the last 15 years, its government says.

It argued that the tech giants should pay a fair amount to newsrooms for the journalism produced as firms profit from people wanting to read the news on its platforms.

Mr Morrison said: "Let me be clear: Australia makes our rules for things you can do in Australia. That's done in our parliament."

What services are Google threatening to remove?

Google has made its position clear in opposition to the new law and threatened to withdraw its search engine operation from the country, while doubts remain over other functions like Gmail and Google Maps.

Its Australia managing director Mel Silva said the laws were "unworkable" and "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."

The introduction of the law would mean a big shift for the internet generally, which is dependent on a free flowing share of information - "it's not how the internet works", she argued.

Google also made the point that many news organisations benefit from its platform driving readers to its websites.

How much is at stake here?

If the law is introduced it would hit Google financially.

In 2020, Google made almost $4 billion (£2.93b) from its Australia market, paying $45 million (£32.92m) in tax, while news outlets have been under severe financial pressures for some time.

Australia, though not Google's biggest market globally, could be seen to be leading the way as other governments seek to regulate the big tech firms which have emerged over the past 20 years.

Whether the law is passed and other countries follow remains to be seen in what could spark a redistribution of funds to help local journalism around the world.