Google has started telling its Australian search users what it will do if the country goes ahead with plans to make it pay for content.

And in separate news, News Corp national daily The Australian reported today that Android phones were tracking users irrespective of whether two-tier privacy settings are applied.

Search users have been confronted with a pop-up telling them about the implications if the Australian government introduces its proposed mandatory code, and that their experience on the platform will suffer.

Elsewhere Google Australia managing director Mel Silva says big media companies would gain "an unfair advantage" over other websites that appear on Google. "News media businesses alone would be given information that would help them artificially inflate their ranking over everyone else, even when someone else provides a better result.

"We've always treated all website owners fairly when it comes to information we share about ranking."

Australian users are warned, "Google Search results and YouTube will be worse for you."

In a statement, Silva (pictured) says that Google has offered to pay to license content, "but rather than encouraging these types of partnerships, the law is set up to give big media companies special treatment and to encourage them to make enormous and unreasonable demands that would put our free services at risk."

Ultimately it would be Google users that suffer, if the proposals go ahead, she says, adding that Google would do "everything we possibly can" to get the proposal changed.

• Separately, News Corp national daily The Australian has reported that Android mobile phones send location data back to Google, irrespective of whether two-tier location and privacy settings are activated.

Under the heading, 'Google knows your every move even with "location history" off,' it reported tests conducted with Oracle showed information being sent to Google even if ­location history settings were turned off and the incognito privacy feature turned on.

Data being sent to Google - duplicated and analysed by Oracle for the experiment - "show the technology giant tracks the phone's movement even when those settings, ostensibly meant to protect the privacy of users, are ­activated".

The Australian said Google Map voice prompts ­directing users through traffic were recorded and sent to Google along with the locations, and "a secret stream of data from Android phones to Google, including location data, information about hundreds of Wi-Fi routers and mobile phone towers which users passed" was intercepted.

They quoted a Google spokeswoman that "geographic information helps us provide useful services when people interact with our products, like locally relevant search results and traffic predictions".