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Australian Prime Minister to Google: We don't respond to threats

Christian Fernsby |
Australia's proposed media code has escalated government tensions with Google, with the tech giant threatening to remove access to its search engine if the plan is stamped into law.

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The Morrison government introduced the underpinning bill to parliament in December, with a Senate committee hearing from stakeholders before the draft laws progress.

Google says the proposed code, which forces tech companies to pay for news content or face fines of up to $10 million, is unworkable and poses a huge financial risk.

Competition watchdog boss Rod Sims says without it, the power imbalance between tech giants and media companies is so great Google could offer "take it or leave it" deals.

"The only way you could get a commercial deal is if you've got some muscle in the arm of the news media businesses," Mr Sims told the Senate inquiry on Friday.

"That muscle is the code. I'm not saying it equals things up but it certainly helps."

He emphasised Google's corporate size to senators: "Google is the Goliath and News Limited is the David."

The government says it would prefer Facebook and Google negotiate commercial deals first, with the code kicking in if talks fail.

Shortly after Google Australia's managing director Mel Silva played the tech giant's trump card, the company launched a slick campaign against the code.

Ms Silva said leaving the Australian market was the "only rational choice" for the company if the code wasn't changed.

Prime Minister Scott Morrison hit back, saying the Australian government made the rules for the nation.

"We don't respond to threats," he told reporters in Brisbane.

Google's solution is to include its "news showcase" feature - where users can read news behind paywalls - in the code, instead of the search engine.

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