Australia looks set to pass laws that would make tech giants negotiate payments with local publishers and broadcasters for what's included in search results or news feeds.

And if they can't strike a deal, ah government appointed arbitrator will decide the price.

It grew out of an investigation where Australia found Google and social media giant Facebook held too much market power in its media, a situation it said posed a potential threat to a well functioning democracy.

Google's local managing director Mel Silver called the code overly broad.

She says the company faces what it calls quote the unmanageable financial and operational risk under the code and that this is grounds for shutting down search in Australia.

In its current form, the code remains unworkable and if it became law, would hurt not just Google but small publishers, small businesses and the millions of Australians that use our services every day.

The U.

S government also part pressure on Australia on Tuesday to scrap their proposed laws, and on Friday, Prime Minister Scott Morrison hit back.

Australia makes our rules for things you could do in Australia that's done in our Parliament.

It's done by our government and that's how things work here in Australia and people who wanna work with that in Australia.

You're very welcome, but we don't respond to threats.

This fight is being closely watched around the world being the biggest challenge so far to the way US tech giants use news on some of the world's biggest websites.