News content is important for Google and Facebook – but they don’t want to pay for it

Executives from Google and Facebook have told a Senate committee they are prepared to take drastic action if Australia’s news media bargaining code, which would force the internet giants to pay news publishers for linking to their sites, comes into force.

Google would have “no real choice” but to cut Australian users off entirely from its flagship search engine, the company’s Australian managing director Mel Silva told the committee. Facebook representatives in turn said they would remove links to news articles from the newsfeed of Australian users if the code came into effect as it currently stands.

In response, the Australian government shows no sign of backing down, with the country’s Prime Minister Scott Morrison and Treasurer Josh Frydenberg both saying they will not respond to threats.

So what is going on here? Are Google and Facebook really prepared to pull services from their Australian users rather than hand over some money to publishers under the…