- Google says it could withdraw Search from Australia in response to proposed legislation compelling the internet giant to pay for news content from local publishers.
- One Australian search engine expert says the move could be “devastating” for businesses which rely on Google Search to reach customers.
- But one competition law expert believes Google’s revenue from Search in Australia would be too substantial to give up so easily.
- Visit Business Insider Australia’s homepage for more stories.
The withdrawal of Google Search from Australia could have a “devastating” impact on local users and businesses, according to one search engine expert.
Zac Basara, CEO of Australian search engine optimisation firm SEO Advantage, said some local businesses would be left “scrambling” if Google Search departs the domestic market.
“Worst case scenario, I see a lot of businesses being wiped out,” he told Business Insider Australia, pointing to firms which rely on Google Search results to reach customers.
But, while Google asserts it is prepared to pull Search domestically, not everyone is so convinced the internet juggernaut will make good on that claim.
What’s going on?
The draft media bargaining code seeks to allow Australian news organisations the ability to individually or collectively negotiate with Google and Facebook for the privilege of hosting news content on their sites.
Should those parties be unable to reach an financial agreement, the matter would go to mandatory arbitration. In the end, those internet giants would be compelled to pay up.
Google says it is willing to pay Australian news publishers for links displayed on its News Showcase product.
But the company says that if the draft legislation is passed in its current state, Google Search would effectively become unworkable – and in that “worst case scenario,” Google says it is prepared to remove Search from Australia entirely.
How would users be impacted?
Google Search accounts for 94% of the Australian search engine market, and pulling the company’s flagship product would have an considerable impact on Australian internet users.
For starters, the default homepage of the internet would be rendered unusable.
It is foreseeable that removing Search would also force people to change the way they use Google Chrome, as well as Google’s Android mobile operating system, which offers Search capabilities in a similar way.
The change could impact other websites, too, as third-party pages which use custom Google Search functions could be hobbled.
Eliminating Google Search would also mean limiting the functionality of products like Google Maps, which can feed users relevant links and locations based on their prior Search results.
In short, most Australian users would be forced to operate within a different internet ecosystem.
That transition would also “devastating” for some Australian businesses. Basara said firms could lose their footing in search results, and potentially customers, if Australian users migrate towards a different search engine.
“It’s pretty loud and clear how that’s going to impact the business,” Basara said.
“It’s a complete turnaround to a different search engine that previously nobody has previously relied on for business generation.
“And if it does happen, everyone will be forced into that predicament – ourselves included.”
Is it likely?
But Google may think twice about pulling Search from Australia, even if the draft legislation does pass in a relatively unchanged form, says Associate Professor Rob Nicholls, lecturer at UNSW Business School and an expert in competition law.
Google’s nuclear option “would risk damaging the major source of data it uses in order to be able to generate the ad revenue that it does, on Search, YouTube, and all of the other sites it provides advertising,” Nicholls said.
“It’s a very big risk. Even if the withdrawal was only for a relatively short period, only to make a point, then there’s a risk of suddenly finding, ‘well, I can’t get all of that data in Australia.'”
Nicholls said payments made to the media under the proposed code would still be overshadowed by Google Search revenue.
Cheques made out to Australian news organisations would “not be material from an audit point of view on Google’s Australian accounts, let alone its global accounts,” he said.
“It’s a very big threat over a very small imposition on Google’s business.”
What happens next?
Tensions are heightening between Google and the federal government, which this week doubled down on core elements of the draft legislation.
And on Wednesday, Microsoft publicly backed the code, while announcing its Bing search engine is ready and able to fill the potential void left by Search.
Nicholls said any transition away from Search will result in “a different sort of world, but it won’t be one where suddenly the internet is broken.”
But Basara, who is closely watching developments around the media bargaining code, said he has already begun advising clients to look at Bing-specific SEO optimisation.
The parliamentary committee is expected to table its recommendations on the draft code on February 12, with the proposed legislation expected to face a vote shortly after.
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