The U.S. government is concerned a proposed law in Australia will force social-media companies such as Google and Facebook to pay for news stories they take from publishers and post on their sites.
Assistant U.S. trade representatives Daniel Bahar and Karl Ehlers said in a letter to the Australian government the legislation warranted "further study" and politicians needed to reconsider. The two government officials said Australia should "suspend" its plans.
"The U.S. is concerned that an attempt, through legislation, to regulate the competitive positions of specific players...to the clear detriment of two U.S. firms, may result in harmful outcomes," the letter said.
The law, which targets companies such as Facebook and Google, was proposed by Australia lawmakers last month.
The legislation was drafted after an investigation found that companies such as Google and Facebook held too much market power in the news industry. The proponents of the new law said Google and Facebook's continued dominance was a threat to a "well-function democracy."
The law is the result of an 18-month review conducted by the Australian Competition and Consumer Commission. The review included "extensive consultation" with both Google and Facebook.
The review found a lot of advertising payments were made to Google and Facebook in return for the news stories they took and a small amount only found its way to the news companies producing that content.
The law is currently before an Australian Senate committee. It has received a lot of political support. If passed, both Google and Facebook will need to pay news companies or agree to mandatory price arbitration if a commercial agreement can't be reached.
In response to the request to scrap the law, Australian treasury official Josh Frydenberg said the government was committed to a "mandatory code" to address market "imbalances" related to digital and news companies operating there.
Google and Facebook, which have both unsuccessfully lobbied against the proposed law, have previously said they may be forced to limit their presence in Australia if the law was enacted.
