SYDNEY (Reuters) – The United States government has asked Australia to reject proposed laws that will make it the first country in the world to force Alphabet Inc’s Facebook Inc and Google to pay for news from the local media.
In a presentation asking the government to “suspend” the plans, US assistant commercial representatives Daniel Bahar and Karl Ehlers suggested that Australia “study the markets further and, if appropriate, develop a voluntary code”.
According to the law, which has broad political support and is currently on a Senate committee, Google and Facebook will be subject to mandatory price arbitration if a trade agreement on payments to Australian media cannot be reached.
“The US government is concerned that an attempt, through legislation, to regulate the competitive positions of specific players … to the detriment of two American companies, could result in damaging results,” the document said, Executive Office of the President.
Such a move could also “raise concerns regarding Australia’s international trade obligations,” the report said.
The Australian government announced the legislation last month after an investigation found that tech giants have a lot of market power in the media industry, a situation that poses a potential threat to the smooth functioning of democracy.
Asked about a response to the US presentation, Australian treasurer Josh Frydenberg said in a statement that the government “is committed to pursuing a mandatory code” that would address “imbalances in bargaining power with digital platforms and media companies”.
The code was made after an 18-month review by the chairman of the Australian Commission on Competition and Consumers (ACCC) and a “broad consultation” that included the views of Google and Facebook, he added.
The ACCC investigation found that for every A $ 100 spent on online advertising, A $ 53 goes to Google, A $ 28 to Facebook and A $ 19 to other media companies.
After intense but unsuccessful lobbying by the Australian government of both tech giants to dismiss the proposed laws, which they consider unfair, Google and Facebook have suggested that they may be forced to limit their offers in the country.
($ 1 = 1,3014 Australian dollars)
Reporting by Paulina Duran in Sydney; Richard Pullin’s Edition