In a letter sent to Australian lawmakers, United States trade representatives have accused Australia of flouting free trade agreements over its plans to force Google and Facebook to pay Australian news outlets for hosting their content.
“As set forth in these comments, the U.S. Government is concerned that an attempt, through legislation, to regulate the competitive positions of specific players in a fast-evolving digital market, to the clear detriment of two U.S. firms, may result in harmful outcomes,” representatives Daniel Bahar and Karl Ehlers write in their letter to the Australian Senate Committee on Economics. “There may also be long-lasting negative consequences for U.S. and Australian firms, as well as Australian consumers.”
If passed, the proposed legislation designed by the Australian Competition and Consumer Commission would force Facebook and Google to negotiate with Australian media companies for the price of displaying their content. The country isn’t alone in its attempt to reign in the two companies’ domination of the media landscape, with the French government ordering Google to engage in similar negotiations.
The move comes after an interim report released by the Commission in October of last year revealed that out of every $100 spent by advertisers in 2018, $49 went to Google and $24 to Facebook.
It’s no secret that tech giants like Facebook and Google can have enormous power over digital media companies that are heavily reliant on ad revenue. Even small changes to the often blackbox algorithms that lie behind Facebook’s newsfeed or Google’s search results can sink some companies. That’s also why, for example, the proposed legislation would require the two companies to notify local media of any changes to relevant algorithms 14 days in advance.
Google and Facebook have unsurprisingly been far from cooperative. Last week it was reported that Australian news websites weren’t appearing in Google searches for some users in what the company confirmed was an “experiment.” And, last summer, Australians were greeted with pop-up warnings on the search engine’s homepage reading “the way Aussies use Google is at risk.”
Despite significant pushback from the two companies, the Australian government doesn’t seem to be backing down, with Treasurer Josh Frydenberg saying in a statement to Reuters that the government is still planning to tackle “the bargaining power imbalances with digital platforms and media companies.”
Google, Facebook, and the Australian Competition and Consumer Commission (ACCC) did not responded to Motherboard’s request for comment.