Australia is preparing a landmark law for Google, Facebook, and potentially other tech companies to pay the media for their news content.
But the US-based tech giants argue that the law does not comply and will damage access to local services.
Meanwhile, Australian Prime Minister Scott Morrison said they would not give in to the “threats”.
Mel Silva, managing director of Google Australia, told the Senate hearing on Friday that the law was “unenforceable” and said: “If this becomes law, it leaves us no choice but to stop making Google Search available on Australia”.
Google is the most common search engine in Australia.
The government maintains that the tech giants must pay a “reasonable” amount for their news channels because the tech platforms get customers from people who want to read the news.
Australian print media have seen a 75 percent drop in advertising revenue since 2005, according to the government.
The threat to remove Google’s flagship product is the gravest threat in history, amid a controversy that other countries are closely following.