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Google invests $740M in Australia amid calls for more regulation

Ten months after threatening to pull Search out of Australia, Google has pledged AU$1 billion to Australia's digital economy over the next five years.

Alphabet CEO Sundar Pichai.

Google has had a contentious relationship with the Australian government in 2021, with the Silicon Valley giant at one point threatenening to pull Google Search from the country. A much more conciliatory note was struck on Monday night (Tuesday morning Australia time), when Google announced it was investing $740 million (AU$1 billion) in Australia's digital infrastructure over the next five years.

"We want to help Australia shape the next wave of innovations," said Sundar Pichai in a prerecorded video statement announcing the investment. He said the money will go toward further developing Australia's cloud infrastructure, to create Google's first research hub Down Under and to establish local partnerships that tackle local and global issues like clean energy production and finding ways to protect the Great Barrier Reef. 

Speaking at Google's offices in Sydney, Australian Prime Minister Scott Morrison called it a "one-billion-dollar vote of confidence in Australia's Digital Economy Strategy." The strategy to which he refers is an $880 million (AU$1.2 billion) initiative his government launched in May to invest in AI, quantum computing, blockchain and other technologies. 

It's the latest twist in Australia's turbulent 2021 with US tech titans. In January, with Australia's parliament working on a bill that would force Google and Facebook to pay the media publications whose content populates Google search results and appears on Facebook feeds, Google threatened to pull its Search platform entirely from Australia. Cooler heads eventually prevailed (although Facebook did block Australian news for a few days), the aforementioned media bill became a law and Google has since struck big-money deals to pay Australian media companies.

"I particularly appreciate the approach that Google has taken to dealing with some difficult issues," Morrison said Monday, in reference to his government's spat with the tech giant earlier in the year. "But we sat down, we've worked through them and I think we've got the right result for both citizens of Australia and for the technology future that we both want to embrace."   

Though Morrison was all smiles at Google's Australian headquarters on Monday, confrontations with Google may not be entirely in the past. 

Australia's competition watchdog, which long petitioned for the news media bill that ultimately became law, once again has Google in its crosshairs. In September it released a report saying that Google has used its dominance in ad tech -- where Google makes most of its money -- to hurt competition in the industry, and advised heavier regulation. Google rejects the accusation, saying its ad tech services support small businesses and create jobs.