SYDNEY (Reuters) – The U.S. government has called on Australia to stop proposing laws that would make it the first country in the world to force Google Inc. of Facebook Inc. and Alphabet Inc. to pay for news obtained from local media.
In a presentation asking the government to “suspend” the plans, U.S. Deputy Trade Representatives Daniel Bahar and Karl Ehlers suggested to Australia that it “study the markets further 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 can be reached in the Australian media.
“The U.S. government is concerned that an attempt, through legislation, to regulate the competitive positions of specific actors … to the clear detriment of two U.S. companies, could produce detrimental results,” the document said, under head of the President’s Executive Cabinet.
This 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 tech 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 an answer to the US presentation, Australian Treasurer Josh Frydenberg said in a statement that the government “is committed to proceeding with a mandatory code” that would address “bargaining power imbalances with digital platforms and media companies” .
The code was followed by an 18-month review by the chairman of the Australian Competition and Consumer Commission (ACCC) and an “extensive consultation” that included the views of Google and Facebook, he added.
ACCC research found that for every $ 100 spent on online advertising, $ 53 goes to Google, $ 28 to Facebook and $ 19 to other media companies.
After intense but successful pressure from the Australian government by both technology giants to remove the proposed laws, which they consider unfair, Google and Facebook have suggested they may be forced to limit their bids in the country.
(1 $ = 1.3014 Australian dollars)
Paulina Duran’s report in Sydney; Edited by Richard Pullin