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That is utterly false

The Australian government isn't forcing Google to index content, and I suspect what op suggested is what will happen and News corp will beg for reindexing

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I don't get it... if News Corp doesn't want to be indexed can't they just set their robots.txt accordingly? It doesn't seem like they'll be able to successfully argue this.

What this law gives them is a way to force all their competitors (e.g. Fairfax) to join their boycott, by being able to negotatiate a single, mandatory price for the industry that their competitors won't be allowed to undercut.

I'll just note that robots.txt does not affect indexing. It is used for traffic management and will not hide pages from Google. [1]

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[1] https://support.google.com/webmasters/answer/6062608?hl=en

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