U.S. trade officials have called on Australia to develop a voluntary code and suspend proposed laws.
The U.S. government has called on Australia to drop proposed laws that will make it the first country in the world to force Facebook Inc and Alphabet Inc’s Google to pay for information from local media.
In a communication calling on the government to “suspend” the plans, US Deputy Trade Representatives Daniel Bahar and Karl Ehlers suggested Australia “to further study the markets and, if necessary, to develop a voluntary code ”.
Under the bill, which enjoys broad political support in Australia and is currently before a Senate committee, Google and Facebook will be subject to compulsory price arbitration if a trade deal on payments to Australian media cannot be worked out. concluded.
“The US government fears that an attempt, through legislation, to regulate the competitive positions of specific players … to the obvious detriment of two US companies, could lead to adverse results,” the document said, under the heading of executive office of the president.
Such a move could also “raise concerns about Australia’s international trade obligations,” he said.
Exploitation by digital platforms
The Australian government announced the legislation last month after an investigation found tech giants held too much market power in the media industry, a situation it said posed a potential threat to a democracy that works well.
Traditional media companies have long complained that their content is being exploited by digital platforms without proper compensation. The Australian government has said it is trying to level the playing field as once-dominant publishers lose ad revenue to Google and Facebook. In May, for example, News Corp. by Rupert Murdoch has announced plans to cut jobs and close or stop printing more than 100 local and regional newspapers in Australia.
Asked about a response to the US bid, Australian Treasurer Josh Frydenberg said in a statement that the government “is committed to adopting a binding code” that would resolve “bargaining power imbalances with digital platforms and companies. media”.
The code follows an 18-month review by the chairman of the Australian Competition and Consumer Commission (ACCC) and an “extensive consultation” that included views from Google and Facebook, he said. added.
The ACCC investigation found that for every A $ 100 ($ 76.8) of online advertising spent, A $ 53 ($ 40.7) goes to Google, A $ 28 ($ 21.5) to Facebook and AU $ 19 ($ 14.5) to other media companies.
Following intense but unsuccessful Australian government lobbying from the two tech giants to abolish proposed laws, which they deem unfair, Google and Facebook have suggested they may be forced to limit their offers in the country.
Facebook had taken a harder line and threatened to prevent Australians from sharing information on its sites if the law was passed. The different responses have made Australia a test case as watchdogs around the world seek to harness the immense advertising power of the digital giants.