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Google’s Australia Exit Could Really Hurt CE & Appliance Retailers

Google’s potential exit from Australia could be very harmful to retailers that depend on traffic coming from the search engine giant.

The California-based tech behemoth threatened to withdraw its search product from Australia entirely in protest of the government’s News Media Bargaining Code.

In its current state, the code would force Google and Facebook to ink deals with publishers in order to show news online.

As of today, Google controls around 94 per cent of the search market.

“The ability to link freely between websites is fundamental to Search. This Code creates an unreasonable and unmanageable financial and operational risk to our business,” Google shared in a recent blogpost.

“As Mel Silva said during the Senate hearing last week, if the Code were to become law in its current form, we would have no real choice but to stop making Google Search available in Australia.”

But what would an absence of Google Search in Australia really mean?

For the consumer electronics and appliance industry, it means the millions of customers who are directed to websites via the search engine could be wiped out.

Online sales for retailers such as JB Hi-Fi and Harvey Norman have skyrocketed after the COVID-19 pandemic forced everyone indoors, with JB recording a 161 per cent lift in website sales alone.

But without Google search, keywords such as ‘soundbars’, ‘headphones’ or ‘4K TVS’ which would ordinarily direct users to these big CE companies would no longer work.

Electronics retailers are also traditionally big ad spenders in online news websites. If news publications lose valuable audience numbers, this would also negatively affect the click-through rates and eventual sales for retailers.

Retailers also invest big money into Google Ads, which also contributes to online traffic.

But it doesn’t mean these audiences will disappear completely. Australians will still require a search engine to navigate the internet, so users will likely convert to lesser-known engines such as Bing or Yahoo.

Google has openly defended its position against the News Media Bargaining Code and shared its contribution to the Australian economy via a blogpost over the weekend.

“Today, we support an additional 116,000 jobs across the country, and provide $39 billion in benefits to Australian businesses and $14 billion in benefits to consumers,” Google wrote.

“In the 2019 calendar year, Google Australia paid AU$59 million of corporate income taxes, and Google’s presence in Australia contributed over AU$700 million in taxes to the Australian Government’s revenue base.”

UPDATE

Canada is also gearing up to present similar legislation which wouold force social media companies to pay local news publishers.

Canadian Heritage Minister Steven Guilbeault told his MPs of the plans last week and said Canada was ‘looking closely’ at the case developing in Australia, The Globe and Mail reports.

Guilbeault also tweeted support for Australia, writing: “we stand in solidarity with our Australian partners” and that “when facing the web giants, we must stand united.”

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