Australia's proposal to introduce a new law has put tech giants such as Google, Facebook on the spot. In fact, this move has also driven Google to announce the withdrawal of its services in Australia if it remains unrevoked. However, why are these companies threatened, and what does this law mean for them? Here's what you need to know about the row:

What is the law?

Australia's landmark new law is known as the News Media Bargaining Code. It is an obligatory code of conduct developed by the Australian Competition and Consumer Commission (ACCC). The law, regarded as the first of its kind, calls out the power imbalance between media and tech companies.

A draft code released by the ACCC in July 2020 stated how news media businesses should be allowed to bargain individually, or collectively, with companies such as Google and Facebook over the return for including news on their platforms.

"Google and Facebook like to do things on their terms," Rod Sims, chairman of Australia's consumer protection regulator, was quoted saying at a recent Senate hearing. Sims also stated how Google and Facebook did not express consent over the law and that it would be in the interest of both the parties to work out the deals on their own. However, allowing smaller, local news companies to go to an arbitrator rather than to court in case of unfair treatment "is what really gives strength to the bargaining for the news media businesses".

News Media Bargaining Code would also require Google and Facebook alert publishers to execute deliberate changes over their algorithms that would significantly influence their businesses 14 days before their implementation.

What do Google, Facebook argue?

Google has announced to pull out its services from Australia if they decide to go forth with this law, stating that "they would have no choice". According to the tech giant, passing the proposed code in its current form would be rendered 'unworkable' for its business model. Mel Silva, Managing Director of Google Australia and New Zealand, announced the law would hurt not just Google, but small publishers, small businesses, and the millions of Australians that use their services every day.

The strife, which has been going on for the past year, has also seen backlash from Facebook. The social media company has reportedly threatened to stop Australian users from sharing news stories on the platform if the code receives a 'green signal'.

How will this affect people in Australia?

Long story short, well, yes. Google disappearing is not only restricted to the search engine. It will pull out everything beginning from Gmail, Google Docs, Google Maps, YouTube and the entirety of Play Store.

According to the Digital News Report published by the University of Canberra in 2020, local newspapers and their websites were considered a 'top source of local news' (41 per cent). But the study further revealed that almost a quarter of news consumers were now beginning to turn to alternative sources such as local social media groups (Facebook) for news about their community.

And while Google pulling out its services may seem like a cause of concern, several have succeeded in trying to browse the internet differently. A writer from Wired magazine tried using Bing for three months and found the results satisfactory. Bing is the second most used search engine, and the writer found that there is very little it cannot do.

Why is this law important for Australia?

The government in Australia argued saying tech platforms gain consumers from those who want to read news online. However, this law states that tech companies should pay newsrooms a "fair" amount for their journalism.

It has mentioned how strong financial support is essential to any news industry because media is vital to a democracy.

What happens now?

In the past week, Google affirmed that it was blocking Australian news websites from its results for about one per cent of local users. The Australian Financial Review was the first to report by announcing how Google had 'tweaked its algorithm' and 'buried links' from local news providers.

It stated how this was an 'experiment' to test the value of Australian news services. The experiment led to the tech giant receiving severe flak. However, in an interview with Business Insider, a spokesperson from the company was quoted saying: "Every year we conduct tens of thousands of experiments in Google Search. We're currently running a few experiments that will each reach about 1 per cent of Google Search users in Australia to measure the impacts of news businesses and Google Search on each other."

Although the debate seems to be considering minor tweaks, it is unlikely that the code would find itself revoked in Australia. In fact, Australian Senator Rex Patrick told Google: "It's going to go worldwide. Are you going to pull out of every market, are you?"

Although, in a completely different scenario, Google has withdrawn its services from a country before due to local laws (read: China).