In the Land Down Under, the ripple effects of the clash between regulators and a giant in online search (that would be Google, of course) may be such that consumers are left searching for search.
And it signals that Big Tech may deem it prudent to exit markets, to the detriment of users who have come to rely on those firms’ offerings for everyday life.
As reported on Friday (Jan. 22), Google has said it might pull out of the country if changes are not made to the proposed news media bargaining code. That code would, in broad terms, mandate that companies such as Google and Facebook would bargain with content publishers, specifically over the value of the news that is distributed over Big Tech platforms. The legislation is in Australia’s House of Representatives at present.
As reported, Managing Director Mel Silva and Government Affairs Head Lucinda Longcroft — appeared virtually at a public hearing before a legislative committee and said that the proposed legislation would be harmful to Google and other firms. Search, they said, needs “unrestricted” linking between sites to function. Should the legislation become law, Google might shut down its site in Australia.
According to Statista, Google has almost 90 percent market share in Australia. Even a brief interruption of service there would have strong ripple effects across business and personal activities. Commerce relies, in part, on search to steer people to where they want to spend money. There would be, at least initially, a vacuum that would eagerly be filled by competitors, who collectively have roughly 10 percent of the search market (Bing may get a lift, for example).
And Google is not alone in its warning that business as usual might not continue in the country. As CNN reported, Facebook has said it will prevent users from sharing news in the country should the legislation be passed into law.
And here is the issue for Google and for others who would opt to leave a market, whole cloth: Big Tech, at large, is under the microscope and range of countries and regions. Might it be the case that similar initiatives would be adopted by other countries targeting market share and perceived pricing power along any subsets of conglomerates’ business – from advertising to payments? Consider the fact that a coalition of 38 state attorneys general filed an antitrust lawsuit against Google, with allegations that the company has engaged in anticompetitive behavior.
The New York Times reported that in Australia, “one potentially groundbreaking element of the proposed legislation” ties in with algorithms, where platforms have to give media firms 14 days’ notice of “deliberate algorithm changes that significantly affect their businesses.”
Firms such as Google will have to weigh the blowback of leaving a country versus the potential of having to alter at least some of its market practices (such as algorithms), exposing it to some additional competitive pressures. The tightrope is a tough one to walk.