The US has asked Australia to scrap proposed laws that would make it the first country in the world to force Facebook and Google to pay for news sourced from local media outlets.
- A letter from the US Government said the bargaining code could “result in harmful outcomes”
- Treasurer Josh Frydenberg said the Australian Government was committed to implementing the code
- In response to the code, the tech giants have threatened to remove Australians’ ability to post news content to its platforms
In a submission asking the Government to “suspend” the plans, assistant US trade representatives Daniel Bahar and Karl Ehlers suggested Australia instead “further study the markets, and if appropriate, develop a voluntary code”.
Under the law, which has broad political support and is currently before a Senate committee, Google and Facebook could be forced into arbitration to pay for local news if a commercial agreement on payments to Australian media cannot be reached.
The planned mandatory bargaining code comes after years of complaints from traditional media outlets that social media platforms benefit from the hard work of journalists without paying for it.
The legislation was introduced to Parliament in December.
Google and Facebook continue to argue that media organisations benefit from referrals and clicks through to their websites.
Facebook has threatened to remove Australians’ ability to post news content to its platforms if the Federal Government does not back down.
The US Government has now also stepped in to pressure Australia to step back from its plans.
A document with the letterhead of the Executive Office of the President said: “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 firms may result in harmful outcomes.”
Such a move could also “raise concerns with respect to Australia’s international trade obligations”, it said.
The Australian Government announced the legislation last month after an investigation found the tech giants held too much market power in the media industry, a situation it said posed a potential threat to a well-functioning democracy.
In response, Treasurer Josh Frydenberg said in a statement that the Government was not backing down and was “committed to proceeding with a mandatory code” that would address “the bargaining power imbalances with digital platforms and media companies”.
The code followed an 18-month review by the Australian Competition and Consumer Commission (ACCC) chairman Rod Sims and “extensive consultation” that included the views of both Google and Facebook, Mr Frydenberg said.
The ACCC inquiry found that for every $100 spent on online advertising, $53 went to Google, $28 to Facebook and $19 to other media companies.
Google recently decided to hide some Australian news sites from its search results in a move that was interpreted as a response to the proposed laws.
Changes to Google’s search algorithm affected a small percentage of users and buried links to some commercial news sites.
A Google spokesperson said it was an “experiment” that happened “every year”.
Google would not say whether it was also burying links to the ABC and SBS, which are included alongside commercial media in the proposed code to make platforms pay for content.
The ACCC was approached for comment.
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