Scott Morrison slaps down ‘threats’ by Big Tech

PM delivers searing reprimand to Google, Facebook after they issue fresh threats to shut down search, news sharing in Australia.

Google Australia managing director Mel Silva appearing before the Senate committee on Friday. Picture: Gary Ramage

Scott Morrison has delivered a searing reprimand to tech titans Google and Facebook, after the companies issued fresh threats to shut down search and news sharing on their Australian platforms if the federal government’s proposed news media bargaining code becomes law.

“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,” the Prime Minister said on Friday.

“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.”

Mr Morrison made his strident remarks two hours after Google’s local boss Melanie Silva appeared before a Senate committee hearing into the proposed media code, at which she repeated her earlier claim that the legislation was “unworkable” in its current form.

The code, which could go ­before the Senate as early as next month, intends to ensure that news media companies are fairly compensated for their original content that appears on the digital platforms.

Mr Morrison’s comments were his most forthright on the issue to date, and are a clear signal to both Google and Facebook that their appeals for the federal government to consider an “alternative code” — or a watered-down version of the existing legislation — are likely to be dismissed.

Ms Silva told the hearing that Google would be forced to abandon the Australian market entirely if the code became law,

“The principle of unrestricted linking between websites is fundamental to search 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,” she said.

But Rod Sims, chairman of the Australian Competition & Consumer Commission which developed the code after a 12-month review into the corporate practices of Google and Facebook, ­argued that the tech titans’ concerns had already been addressed, following the release of the draft report into the code last July.

“I appreciate why Google and Facebook do not want to pay for content they are currently able to distribute, display and benefit from without payment. This is why a mandatory code is needed,” Mr Sims told the Senate hearing.

“The code before parliament is significantly different to the draft we released last July. This code specifically addresses the three main concerns Google raised with the draft code, and we have also taken feedback from Facebook into account,” he said.

Earlier, Ms Silva was savaged over her company’s threat to exit the Australian market. While she repeatedly sought to downplay the threat, characterising it as a “worst case scenario”, a number of senators on the committee suggested such a claim was disingenuous.

Independent senator Rex Patrick accused Google of being primarily concerned about the “commercial precedence, not the technical precedence” of the proposed code, given that the “rest of the world is watching”.

Senator Patrick asked Ms Silva: “You are going to pull out of every market in the world, are you?”

Greens senator Sarah Hanson-Young said the possibility that Google might leave Australia if it did not gets its way was “a hell of a threat … that doesn’t seem to add up with the facts that you’ve presented yourself about the impact that this would have just on news content in Australia”.

Liberal senator Andrew Bragg said Google’s threat was “blackmail”.

But Ms Silva defended her stance, arguing that her company’s business model was clear. “Any rational business would look at that piece of legislation and evaluate the technical and operational risk, and the financial risk associated with it,” the Google boss said.

Senator Bragg quizzed Ms Silva on the extent of regulation currently faced by Google in Australia, asking: “Do you have capital requirements?”

Ms Silva: “No, senator.”

Senator Bragg: “Are you ­licensed?”

Ms Silva: “No, senator.”

Senator Bragg: “Do you have to face minimum service standards?”

Ms Silva: “No, senator.”

Senator Bragg: “It would ­appear to me to be quite a light regulatory burden, given the size and scope of your business in the lives of Australians, and certainly in terms of the revenue that you ­derive from the Australian marketplace.”

Ms Silva also told the hearing that Google had earned $4.8bn in gross revenue during the past ­financial year, and had paid just $59m in tax.

“We comply with the laws in the land when it comes to tax,” Ms Silva said.

Following Ms Silva’s testimony, Facebook’s executives ­renewed their company’s pledge to block the sharing of news in Australia, detailing the fact that local users would no longer be able to post any news stories, videos or other news-related content to the platform if the proposed code were to become law.

“Users would be able to have very full use of Facebook, but if they tried to share something like that, because of this law, which creates financial burdens that are unknowable and uncapped, then that’s the small part of Facebook which involves news will no longer be possible,” Facebook’s vice-president of public policy in the Asia-Pacific, Simon Milner, said.

“It’s not going to be shared because you don’t want to pay for it,” Senator Hanson-Young replied.

Facebook told the Senate committee that it derived “no commercial value” from news in Australia, and that Australian news accounted for less than 5 per cent of an ­average user’s news feed.

“It certainly helps to enrich the community but it brings no commercial value to Facebook,” Mr Milner said.