Social networking giants Google and Facebook face a looming crisis in Australia, over that country’s intention to press ahead and implement a new law to force them to pay publishers for news.
The legislation is currently being reviewed by an Australian Senate committee, and a vote is expected early this year. If it is passed, Australia would become the first country in the world to force Facebook and Google to pay for news sourced from local media outlets.
Now Reuters has reported that the US Government has asked Australia to halt the legislation, Reuters reported.
The US asked the Australian government to “suspend” the plans, and assistant U.S. trade representatives Daniel Bahar and Karl Ehlers, reportedly suggested Australia instead “further study the markets, and if appropriate, develop a voluntary code.”
“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,” said in the document, under the letterhead of the executive office of the President, Reuters reported.
Such a move could also “raise concerns with respect to Australia’s international trade obligations,” it said.
When asked for a response to the US submission, Australian Treasurer Josh Frydenberg reportedly said in a statement the government “is 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 and “extensive consultation” that included the views of both Google and Facebook, he added.
The ACCC inquiry found that for every A$100 of online advertising spend, A$53 goes to Google, A$28 to Facebook and A$19 to other media companies.
Australia’s move is being strongly opposed by Google and Facebook, despite Australia touting the new law as a way to protect independent journalism.
It comes after Google in June 2020 announced the ‘News Showcase’ scheme, which would see news publishers in Australia, Brazil, and Germany starting to be compensated for the news they produce.
CEO Sundar Pichai pledged $1 billion (£778m) over three years to the scheme, which will be rolled out worldwide.
Google in November additionally signed copyright agreements with six French newspapers and magazines, including Le Monde and Le Figaro.
However this Google scheme to compensate news publishers has been ‘paused’ in Australia, due its to disagreement with this new Australian law change.
Facebook in September also bluntly warned Aussie users it will prevent them sharing local and international news, if Australia presses ahead with this law.
Facebook has previously labelled the Aussie law as ‘bad legislation’ and said the law “defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.”
Google has also previously expressed its opposition to this Australia legislation and used its search web page in Australia to warn local users that it would harm their ability to search.
But Australia has not backed down, with the country’s top antitrust regulator, ACCC Chair Rod Sims, saying that it was tech firms call if they choose not to comply.
Last week the Australian government slammed Google after it began blocking certain news websites as an ‘experiment’ for a number of Australian users.
The Australian government said that Google should focus on paying for Australian content instead of blocking it.
But this is sign of things to come for Australians if the new law is implemented.
Google could likely shut down its Google News service altogether for that country, as it did in Spain back in 2014, when Spain required news aggregators (such as Google) to pay for a license to use news content.
Facebook, as already mentioned above, has previously warned it will prevent Australians from sharing local and international news, if Australia presses ahead with this law.
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