Australia's bold move to make Google and Facebook pay for news content they share turned into a high-stakes drama when the tech giants threatened to pull out of the country. But instead of leaving Google and Facebook cut deals worth $166 million annually with local news outlets, avoiding the full force of the new laws. This struggle between tech behemoths and news organizations is now influencing similar legislation in California, where lawmakers are grappling with how to balance the needs of struggling media with the power of Silicon Valley. As global debates about tech regulation heat up, Australia's experience offers a dramatic preview of what might come next.

Google threatened to leave Australia three years ago when lawmakers there took on the titans of Big Tech, drafting laws to make Google and Facebook pay for news stories they posted on their websites.

Google Australia Managing Director Mel Silva stated in a Senate hearing that the business would have "no real choice"...