US’s enormous technology industry is lobbying the Trump government to engage in a new fight with the Australian government over its regulations governing social media and streaming services.
Top executives from Silicon Valley, who have built close relationships with Trump, are now pressuring him to ease Australia’s regulations or risk retaliation.
The Computer and Communications Industry Association (CCIA), which represents the industry, has submitted a formal submission as part of the White House’s review of US trade policy.
Those tariffs could lead to a new front in Mr Trump’s trade war, as he considers putting new tariffs on Australia to create more profitable trade conditions for US companies.
As part of its submission, the CCIA opposes the Albanese government’s “News Bargaining Incentive.”
It is a scheme that would push large social media and search firms to either make commercial agreements with news platforms to utilize their content or spend a separate charge. The scheme was revealed in December. It will substitute an older system, under which Facebook (now Meta) and Google agreed to compensate ABC and commercial media outlets for using their content.
The government claims that firms that raise revenue from Australian advertisers must back Australians’ ability to obtain quality news content.
However, the CCIA views the proposal as a “coercive and discriminatory tax that requires US technology companies to subsidize Australian media companies”.
“Currently, the two companies targeted by the law pay $AU250 million annually through deals that were coerced through the threat of this law,” according to the submission. “However, with the threat of the new ‘incentive’ tax from the Australian government (rate yet to be determined), this cost is likely to significantly increase.”
A local content quota is also among the complaints raised by the association about American streaming services. Netflix would be forced to finance Australian productions under the quotas, similar to the rules imposed on traditional television networks.
“Australia’s online video streaming market is estimated to generate up to $2.3 billion ($3.7 billion) of annual revenue, with the majority of it earned from US companies,” the CCIA submission states. “If the Australian government pursues the 20 percent expenditure mandate it has floated in the past year, that would put this revenue at risk.”
Local content quotas were announced by the federal government more than two years ago. In recent times, however, the government has backed off the idea due to concerns about how it would fit with the Australia-US free trade agreement.
As a proponent of open trade, the CCIA opposes any new tariffs on Australia. However, it suggests they can be used as a negotiating tool.
This submission was made to the Office of the US Trade Representative, which has been charged with assisting in devising Mr. Trump’s “reciprocal tariffs”. On April 2, those tariffs will take effect, but Mr Trump has not yet outlined the details.
Australia has been attempting to convince the Trump administration not to place further tariffs on Australian imports after previous steps to exclude Australia from tariffs on aluminum and steel were ineffectual.
Treasurer Jim Chalmers stated the standing taken by the US tech giants was unsurprising.
“I’m not privy to the conversations that they have with President Trump from time to time,” he added. “It’s self-evident they’re very close with the US administration. Our focus and our job is to make our case in the US as we have been doing.”
There are more than 20 big players in the tech industry affiliated with the CCIA, including Meta, Google, X, Apple, and Amazon.
In addition to being one of Mr Trump’s most influential inner circle members, Elon Musk is heading up his “DOGE” cost-cutting operation. Additionally, Mark Zuckerberg and Jeff Bezos have strengthened their previously strained relationship with Mr Trump, announcing new business policies aligned with his administration’s priorities and donating millions of dollars to his inaugural fund through their businesses.
