Urged United State Australia to abandon draft media laws that would compel tech giants, Google and Facebook, to pay news organizations to share their content.
The United States said, in a note submitted to the Australian Parliamentary Inquiry: The proposed legislation is unreasonable, impractical, unbalanced and may contradict the Free Trade Agreement between the United States and Australia.
Media laws impose a mandatory code of conduct on digital platforms, which would allow individual and collective bargaining from Australian media to determine payment for display of news content on Google and Facebook.
The laws allow the arbitrator to have the final say if the media and tech giants in the United States cannot agree on a fair price, and they also require the media to be provided 14 days in advance of algorithmic changes that may affect their business.
The laws were introduced in Parliament in December and are now before a Senate committee.
And in report To that committee, the Office of the United States Trade Representative said: The proposed laws may lead to harmful consequences.
He called on the Australian government to postpone the proposal, arguing that direct intervention in the market to distribute advertising revenue was exceptional and an important step that needs to be carefully considered and justified.
The Office of the United States Trade Representative said: From the point of view of the United States, it would be best to pursue additional market study and consultation to identify a specific market failure that could be addressed first through a voluntary code.
He added: If the code is clearly ineffective, then it is possible to assess options and provide evidence to support or oppose proposals identified 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 there is a need for legislation.
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 being subject to an overly mandatory and cumbersome law without demonstrating a violation of current Australian law or market failure.
The submission states that the legislation is exclusively designed to target two U.S. companies, and the United States government urges Australia to consider whether allowing the arbitrator to set a fair price allows full compliance with Article 20.5 of the Australia-US FTA.
The United States said it was inappropriate for the draft code to allow for collective bargaining, a measure introduced to allow smaller media players to come together, because it represented a departure from widely accepted principles of competition.