Alphabet Inc’s Google said on Friday it would block its search engine in Australia if the government proceeds with a new code that would force it and Facebook Inc to pay media companies for the right to use their content.


Google’s threat escalates a battle with publishers such as News Corp that is being closely watched around the world. The search giant had warned that its 19 million Australian users would face degraded search and YouTube experiences if the new code were enforced.


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What is the issue between Google and the Australian Government?


There is a deadlock between Google and the Australian government over the media payment law. The government of Australia is working on a draft of this law. Under this law, both Google and Facebook may have to pay to display the news of local media companies on their search engine. This law is currently being debated in Parliament. Voting may also be held soon.


Apart from Google, Facebook, other tech companies are opposing this law of the Australian Government. Google has warned that if the government is forced to pay media companies, then free search services in Australia can be withdrawn. Then people here will have to pay to use Google.


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.


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.


Managing director of Google Australia and New Zealand Mel 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, as quoted by Reuters.


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