Both digital platforms that will be covered by the proposed code — Google and Facebook — have taken stands that they will not be able to operate under the regulations.
Google has said it will pull its search engine from Australia while Facebook says it will not allow the posting of news from Australian publications in its news feed.
They want a code that incorporates many changes from the one which the government introduced into Parliament on the last sitting day of December.
Localsearch Digital and Growth director Adam Boote said in a statement: "Google is one of the biggest lead generators for businesses in the digital age. Australia has more than 2.3 million businesses who have already been doing it tough in the last few years, Google no longer being available to them to market will kill them.
"Last December (2020), Google received 91.28% of online searches with the rest divided between the likes of Bing, Yahoo!, Baidu, YANDEX and other search engines. While SEO and SEM can be done on other platforms (like Bing), Google is the primary focus of these activities. If Google turns off their search engine, businesses will be required to start from scratch with their marketing.
"This is a big loss in the climate we currently face during a global pandemic. Search engines were one of the biggest and most successful avenues ensuring businesses — big and small — were able to survive and reach customers. If the bill is passed, it also means they would lose valuable business generated through Google My Business."
Localsearch has been supporting more than 28,000 Australian small businesses for more than 28 years.
Boote added: "Organic Google searches are one of the only online platforms where even the smallest business can compete with the big corporations. Small business owners don't even need financial investment on their part if they upskill themselves on the intricacies of organic ranking.
"If you are a newer business, this could be the make or break for your business. Now, imagine you don't have the money to invest in paid marketing just yet, so you're relying on building your organic — and then the organic methods are taken away. Where are you left standing?
"Even those businesses who can afford to utilise search engine marketing will suffer. When using paid search platforms, like Google Ads, the platform takes time to get to know your business, your consumers and the relationship between you.
"Over time, you'll receive better results as the platform learns where to push your ads. If Google were to leave, you'll have to start over from scratch, and for some businesses that could cripple them."