Australia snafu shows need for clarity on U.S. digital policy

As the U.S. government finally starts reining in digital platforms and getting serious about saving the free press, it needs a consistent position across the new administration.

Lately, it’s sending mixed messages.

Right after suing Google and Facebook for choking competition, the U.S. government urged Australia to back off its effort to address the same misbehavior.

Australia’s Senate is considering a policy that would require Google and Facebook to compensate publishers for news content they display and profit from.

The proposal is being closely watched by press advocates, regulators and policymakers around the world as they step up efforts to prevent digital platforms from stifling competition and killing the free press.

So it was jarring to see the Office of the U.S. Trade Representative urge Australia to ease up, slow down and consider instead a “voluntary code of conduct” for digital platforms.

In testimony submitted Jan. 19, the agency said it’s unclear there’s a market failure justifying the legislation. It warned Australia the policy might run afoul of its free-trade agreement with the U.S.

I was particularly irked by the testimony’s sneering at the press crisis, writing that Australia’s policy “is based on a perceived urgency in the need to address the impact on the news business.”

This came after the U.S. government found market failures in digital search and advertising and social media, prompting it to sue Google on Oct. 20 and Facebook on Dec. 9.

Not to mention the Jan. 6 insurrection fueled by misinformation, in a country that lost more than half its newspaper industry.

The ironies aren’t lost on Australians.

“Disappointing that the U.S. government doesn’t respect Australian sovereignty when it’s clear how important a viable media is to democratic societies. I’d offer the USA as exhibit A,” digital-reform advocate Peter Lewis, director of the Centre for Responsible Technology in Sydney, told me via email.

Perhaps we should cut the feds some slack because of the presidential transition. It was the Trump administration that finally sued digital platforms, while simultaneously playing the spoiler in Australia.

President Joe Biden, inaugurated soon after, can help the situation, and his promising choice for trade representative, with clarity. He should affirm the administration’s commitment to antitrust enforcement and regulatory reform, to restore competition and spur innovation that’s stifled by digital platforms’ unfair business practices.

This is needed partly to help save the free press, bridge divides and sustain democracy. The press is harmed by platforms abusing their digital-advertising dominance and providing inadequate compensation for content use.

Biden also needs a consistent digital platforms message as he rebuilds foreign relations. Numerous countries are looking for ways to address anti-competitive behavior by American tech giants and preserve news industries to sustain their democracies.

With the U.S. slow to respond, others are enforcing competition rules or drafting new ones to better regulate platforms.

The European Union is considering two sweeping proposals to regulate the digital sector, including large platforms deemed “gatekeepers.”

Former Federal Communications Commission Chairman Tom Wheeler makes a convincing argument that the U.S. should form a digital alliance with the E.U., to jointly address issues like misinformation, competition and consumer protection.

America’s lack of leadership threatens digital platforms’ success, as a mix of other nations try to fill the void. Cooperative policymaking, including companies’ input, will help the industry and international relations, Wheeler argued in a recent Brookings Institution paper.

The opposite is happening in Australia, where a discordant, defensive response is failing to soften the policy. Instead, it’s unifying political factions to get it done.

Google’s thuggish response — including threats to cut search services in Australia — is also hardening lawmakers’ resolve. “I think it’s actually locked them into their position,” Lewis said.

Australia’s policy stands out because it’s intended to address anti-competitive conditions, as opposed to paying for copyrighted material.

Notably, it would require payments to be set by arbitration, if platforms and publishers can’t agree.

This isn’t perfect. It will particularly benefit one large publisher, News Corp, but it’s a start. Lewis said any publisher generating more than $150,000 yearly may participate.

Alan Oakley, a News Corp veteran working on a venture called NewsFarm to support small publishers in Australia, told me they won’t benefit initially. “But once NewsFarm has scale, we’ll be banging on the doors of Google and (Facebook) for some payment,” he said via email.

Google and its tech allies, meanwhile, say the policy amounts to forcing payment for links and breaking the web. That’s a hyperbolic response and unlikely outcome.

There was resistance to paying for online music but compensation schemes were sorted without an apocalypse. That industry’s decline was reversed after Congress passed reforms, including new copyright and royalty policies, U.S. Sen. Maria Cantwell noted in her recent report on saving local news.

Progress in these complicated areas takes clarity and consensus building, unlike what the U.S. is offering in Australia.

It’s tricky because the U.S. does need to stand up for its companies and watch for unfair treatment of them by foreign governments.

Nobody wants others telling their kids how to behave. But you’ve got to expect other adults will step in, if your kid acts like a bully in someone else’s house.

In this case, the U.S. let the bullying happen for too long in its own backyard.

Countries around the world are acting to save the press and sustain their democracies with competition policy, aimed mostly at American companies.

The U.S. should be leading this effort, not chasing, confusing and complicating it.