“The latest version of the Code requires Google to pay to link to news sites, breaking a fundamental principle of how the web works and setting an untenable precedent for our business, the internet, and the digital economy,” Mel Silva, Google Australia’s managing director, said in a statement, “This is not just Google’s view. Many other respected voices have raised similar concerns in their submissions to the Senate Committee.”

Leave Australia. In her testimony, she threatened that Google would leave Australia. “The principle of unrestricted linking between websites is fundamental to search and coupled with the unmanageable financial and operational risk 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.

The impact. There are over 19 million Australians who use Google to search daily. Those 19 million may not have their go-to search engine moving forward. This is a relatively small market for Google compared to all of Europe and the United States.

Greg Sterling, search analyst legend, told us, “The issue of governments looking to big tech companies to subsidize journalism isn’t going away. Google’s threat to turn off search in Australia is thus a kind of warning to others around the world. The strategy has its limits; Australia is a small market for Google. But is the company willing to do that across Europe and beyond? I don’t think so. “

French deal. Meanwhile, a couple of days prior, Google reached a deal with publishers based in France to pay them for listing their content in search. This agreement “establishes a framework within which Google will negotiate individual licensing agreements with IPG certified publishers within APIG’s membership while reflecting the principles of the law,” L’Alliance de la Presse d’Information Générale (APIG) said.

This comes two years prior to when Google said it wouldn’t pay French publishers. Instead, it limited how those snippets displayed in the search results. It looks like France’s antitrust claims ultimately worked out on some level for them. Similarly, restrictive copyright rules in Germany and Spain several years ago prompted Google to pull back on snippets, which caused a significant decline in search traffic to news sites in those countries.

Google’s statement. Here is the full statement from Mel Silva, managing director, Google Australia and New Zealand:

“The latest version of the Code requires Google to pay to link to news sites, breaking a fundamental principle of how the web works, and setting an untenable precedent for our business, the internet, and the digital economy. This is not just Google’s view. Many other respected voices have raised similar concerns in their submissions to the Senate Committee. 

By introducing a flawed arbitration model and unworkable requirements for algorithm notifications, the Code exposes Google to unreasonable and unmanageable levels of financial and operational risk. 

If the Code becomes law, Google would have no real choice but to stop providing Search in Australia. That’s a worst-case scenario and the last thing we want to have happen—especially when there is a way forward to a workable Code that allows us to support Australian journalism without breaking Search. 

This workable solution would see Google pay publishers through News Showcase, a licensing program with nearly 450 news partners globally. By making News Showcase subject to the Code, Google would pay publishers for value, and reach commercial agreements with publishers, with binding arbitration on Showcase. In addition, we’ve also proposed amendments to the arbitration model that will bring it in line with widely accepted models and lead to fair commercial outcomes, and algorithm notification requirements that are workable for Google and useful for news publishers.”

Why we care. Of course, if Google left Australia, that would not be great for searchers there. But ultimately, I do agree, if Google had to pay to list links in its search results, it can change search and the web as we know it. It could also have a drastic ripple effect for companies and marketers in Australia (and globally) who rely on Google Search to drive traffic and business to their websites.

It’s hard to predict what will happen. I suspect Google will work out a deal with Australia to help news publishers there with additional monetization efforts and maybe donate some money. We will see.