US asks Australia to ditch plan to make Facebook, Google share ad revenue

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The US government is asking Australia to abandon a proposed law that would force Facebook and Google to pay local media firms a cut of the advertising revenue they rake in when using their content.

American trade representatives Daniel Bahar and Karl Ehlers asked Australia to “suspend” the plans and suggested the country instead “further study the markers, and if appropriate, develop a voluntary code.”

Under the law, the tech giants will be subject to mandatory price arbitration if they can’t reach a deal to pay Australian media directly. For every dollar spent on online advertising down under, nearly a third goes to Google and Facebook, a 2019 ACCC report on digital platforms showed.

The US government representatives wrote that the plan would be “to the clear detriment of two US firms” and “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 18-month 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 a statement, Australian treasurer Josh Frydenberg said that the country is committed to addressing “the bargaining power imbalances with digital platforms and media companies.”

With Post wires

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