Prime Minister Scott Morrison has pushed back against a threat by Google to stop making its search engine available in Australia if it is forced to pay news outlets for showing links to their websites and stories under a new media code.

“Let me be clear, Australia makes our rules for things you can do in Australia. That’s done in our Parliament,” the Prime Minister said.

“It’s done by our government and that’s how things work here in Australia, and people who want to work with that, in Australia, you’re very welcome.

“But we don’t respond to threats.”

The comments come after Google insisted during a parliamentary inquiry that it would stop making its search engine available in Australia if the federal government proceeded with its planned digital media code.

• Related: Google threatens to disable search engine

The code would see digital giants such as Google and Facebook pay local media companies for providing their content in search and sharing their content on social media.

Managing director of Google Australia and New Zealand Mel Silva told a parliamentary hearing into the proposed scheme that it was unworkable and “untenable” for them.

“The principle of unrestricted linking between websites is fundamental to search and coupled with the unmanageable financial and operational risk,” she said.

“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.

“This is our worst-case scenario, we do not want to be in this situation, we would love to get to an outcome where there is a workable outcome for all parties.”

Ms Silva said the company was willing to strike deals with news publishers to direct users to their content and had already made similar arrangements around the world.

“There is, however, a workable solution for Google where we would pay publishers for value, they would create and curate content and panels that would exist across several Google services,” she said.

“These are deals that have been done all around the world, 450 so far.”

Google ‘experiment’ already burying news sites

Google is currently doing an experiment on its Australian users where it hides news sites from its search results.

The media giant has tweaked its search algorithm for about 1 per cent of its users which means links to some news sites are buried, a move that some believe is a response to the Australian government trying to make it pay for news content.

Ms Silva said the experiment had “several arms” and would not confirm which news outlets, including the ABC, were or were not part of the trial.

Despite this, for at least one user, reaching the ABC News website through the search engine was impossible earlier this week.

Peter Lewis is the head of the Australia Institute’s Centre for Responsible Technology and said if it was true the company had used the ABC in the experiment, it would “taint” Google’s argument that news content “is not of greater value than, say, a cat video”.

“It’s really concerning for all Australians that care about access to the news,” he said.

“Particularly during a pandemic when important public health information is vital.

“Using it on commercial outlets is one thing, using it on the public broadcaster is more egregious because the level of reliance so many people place on the ABC for that important flow of information, we’ve seen it during the pandemic, we saw it last year during the bushfires.”

According to the Nielsen Digital Content Ratings, ABC News was the number one news website in 2020, with an average monthly viewership of 12.4 million people.

Mr Lewis said he believed the experiment was being used by Google to bolster its argument that it should not have to pay for news content.

Facebook outlines concerns with the code

Facebook has three main issues with the proposed code. Photo/ ABC/AP/Karly Domb Sadof

Facebook also appeared before the inquiry and has previously threatened to remove Australians’ ability to post news content to its platforms if the code goes ahead.

The vice-president of public policy at Facebook, Simon Milner, said the social media giant had three main concerns about the legislation.

“One is the mandating that we have to have commercial arrangements with every single publisher in Australia.

“The sheer volume of that we regard as unworkable.”

The second is a process of binding arbitration in price negotiations instead of good faith negotiations.

“And third is a non-differentiation clause that prevents us from offering commercial terms to certain publishers and changing how we display their content regardless of whether we agree a deal.

“It means if one publisher is out, all Australian publishers are out.”

The inquiry also heard the code would prevent the company from rolling out its Facebook News product in Australia which pays news outlets to host and promote their content in a specific service.

–ABC