The federal government could just create a new tax for Google or Facebook if they don't come to a deal with publishers to pay for content.
Allan Fels, chair of the Australian Competition and Consumer Commission (ACCC), is not surprised the giant digital platforms are pushing back against a mandatory code governing the relationship with publishers.
“Personally, I think that the government has got this huge stick in the closet if Google walks or partly walks, and that is to put on a digital tax,” Fels told The Conversation in an interview.
"A digital tax is being talked about globally, mainly at the OECD. And virtually every member of the OECD wants to put a digital tax on the platforms except the US."
Fels says people expect Google and Facebook to "suck it and see" rather than going home with a cricket bat or baseball bat.
In 2014. Google closed its news service in Spain when the government there charged Google copyright fees for using news.
Google says it would be too difficult to simply shut Google News in Australia, as it has elsewhere, to avoid the code.
The platform says the proposed law to govern how digital platforms pay news publishers for their content encourages “enormous and unreasonable” demands, calling it “unworkable”.
At the base of Google’s objection is that the proposed code gives publishers information on its algorithm which it says would make Search and YouTube worse for users.
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