Google Paying For News In Australia Is “Inevitable” Says Treasurer

Australia’s Treasurer Josh Frydenberg said it’s “inevitable” that Google and other tech behemoths will have to eventually pay for using media content, responding to the internet giant’s threat to disable its search engine in the country if it’s forced to pay local publishers for news, reported Bloomberg.

Google stated Friday, January 22, that a proposed law, intended to compensate publishers for the value their stories generate for the company, is “unworkable,” opposing the requirement that media companies pay for displaying snippets of articles in search results.

As Google escalates a months-long standoff with the government, Frydenberg said Australia could either be a “world leader” in pushing for the code or wait to follow others in passing similar legislation.

“It seems that digital giants did themselves a big disservice last week when they very openly and publicly threatened the Australian public with pulling out of Australia effectively with search if the legislation proceeds as it currently stands,” Frydenberg said.

The threat is Google’s most potent yet as the digital giant tries to stem a flow of regulatory action worldwide, but such a radical step would hand an entire developed market to rivals. At least 94% of online searches in Australia go through the Alphabet unit, according to the local competition regulator. 

Still, Google’s market share puts the company in a position to boost revenue in other businesses to make up for higher costs.

“The company’s product lead in search over rivals such as Yahoo, Microsoft’s Bing and DuckDuckGo makes it unlikely that advertisers and publishers could move to competitor platforms for driving referral traffic in the near- to medium-term,” according to Bloomberg Intelligence analysts Mandeep Singh and Matthew Martino. “The company could offset this by raising ad prices and by lowering traffic acquisition costs paid to mobile network carriers.”

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