SYDNEY (Reuters) – The US government has called on Australia to drop proposed laws that will make it the world’s first country to force Facebook Inc. and Google Alphabet Inc. to pay for local media news.
In a statement in which the government “suspended” the plans, US trade representatives Daniel Bahar and Karl Ehlers suggested that Australia “further study the markets and, if necessary, develop a voluntary code”.
Under the law, which has broad political support and is currently before a Senate committee, Google and Facebook will be subject to mandatory price arbitration if no commercial agreement on payments to the Australian media can be reached.
“The US government is concerned that an attempt, through legislation, to regulate the competitive positions of specific players … to the clear detriment of two US companies, could lead to harmful results,” the document said, under the headline Bureau executive of the president.
Such a move could also “raise concerns about Australia’s international trade obligations,” he said.
The Australian government announced the legislation last month after an investigation found that technology giants had too much market power in the media industry, a situation it said posed a potential threat to a well-functioning democracy.
Asked for a response to the US filing, Australian Treasurer Josh Frydenberg said in a statement that the government “is committed to a binding code” that addresses “bargaining power imbalances with digital platforms and media companies”.
The code followed an 18-month review by the chairman of the Australian Competition and Consumer Commission (ACCC) and an “extended consultation” that included the views of Google and Facebook, he added.
The ACCC survey found that for every $ 100 spent on online advertising, $ 53 goes to Google, $ 28 to Facebook and $ 19 to other media companies.
Following an intense but unsuccessful lobby by the Australian government from both technology giants to drop the proposed laws, which they consider unfair, Google and Facebook have suggested they could be forced to limit their bids in the country.
($ 1 = $ 1.3014)
Report by Paulina Duran in Sydney; Montage by Richard Pullin