The United States has urged Australia to abandon draft media laws that would force technology giants, Google and Facebook, to pay news organizations for sharing their content.
In a submission to the Australian Parliamentary Inquiry, the United States said that the proposed legislation was unreasonable, impractical and unbalanced and could be contrary to the United States-Australia Free Trade Agreement.
Media laws impose a mandatory code of conduct on digital platforms, which would allow individual and collective negotiation by The Australian media to determine payment for news content on Google and Facebook.
The laws allow the arbitrator to have the final say if the U.S. media and technology giants cannot agree on a fair price, and require the media to be given 14 days' advance notice of changes that may affect their business.
The laws were introduced in Parliament in December and are now before a Senate committee.
In a report to that Committee, the Office of the United States Trade Representative said that the proposed laws could lead to adverse consequences.
He called on the Australian Government to postpone the proposal, arguing that direct market intervention to distribute advertising revenues was exceptional and an important step that needed to be carefully considered and justified.
"From the United States point of view, it would be better to continue to study the additional market and consult to determine the failure of a particular market that can be addressed first through a voluntary code," said the Office of the United States Trade Representative.
He added: "If the Code is clearly ineffective, it is possible to assess options and provide evidence to support or oppose specific proposals through the regulatory process in Australia where stakeholders can participate.
The Office of the United States Trade Representative said: We respectfully request that Australia reconsider whether legislation is needed.
The Australian Competition and Consumer Commission was initially asked to develop the voluntary code, but the code became mandatory in April 2020 after a sharp decline in advertising revenue and the closure of several regional newspapers in April.
The United States is concerned that the bill gives the responsible minister broad discretion to nominate a technology company as subject to a highly mandatory and cumbersome law without proof of violation of current Australian law or market failure.
The submission states that the legislation is designed exclusively to target two United States companies, and urges the United States Government to consider whether allowing the arbitrator to determine a fair price allows full compliance with section 20.5 of the Australia-Us Free Trade Agreement.
The United States said it would be inappropriate for the draft code to allow collective bargaining, a measure introduced to allow smaller media players to come together, because it represents a departure from widely accepted competition principles.
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