Tech War With News Publishers Reaches US: Bloomberg

The battle between news publishers and Alphabet Inc.’s (NASDAQ: GOOG) (NASDAQ: GOOGL) Google and Facebook Inc (NASDAQ: FB) kickstarted in Australia got further intensified as it made way into the U.S., Bloomberg reports.

What Happened: Policymakers intend to reintroduce legislation to permit news organizations to crowd together to negotiate with the technology companies over the payment for content and user data retained by the tech majors.

The legislation is being proposed in the Senate and House with bipartisan support.

Australia passed a law last month forcing payment for news content. Publishers have been lobbying European Union lawmakers to copy parts of the Australian law.

Why It Matters: Google initially threatened to shut down its search engine in Australia, while Facebook imposed a news blackout on its platform. Google decided to negotiate deals with publishers, while Facebook backed down after concessions from the government, only subjecting publishers to arbitration as a last resort.

Google launched a paid news showcase platform to bypass the Australian and U.K. content laws.

Interestingly Microsoft Inc (NASDAQ: MSFT) commended the U.S. to charge the tech companies for content usage akin to Australia and U.K. to further its vested interests concerning market share expansion of its search engine Bing.

However, the media organizations need to ensure a collective bargain with the tech majors to win the case. However, collective bargaining is prohibited under U.S. antitrust laws.

The House will hear the issue Friday at an antitrust panel hearing to consider antitrust reforms following a 16-month investigation on anticompetitive tactics employed by tech companies to eliminate competition.

The investigation committee recommended providing publishers the antitrust safe harbor provision.

Amy Klobuchar of Minnesota, who is leading the Senate’s initiative, stressed the legislation’s importance in translating into better negotiation power for the publishers against tech giant monopoly. The ruling stands a better chance upon Senate Minority Leader Mitch McConnell being a co-sponsor of the bill, thereby aiding the survival of struggling local news organizations.

Price action: GOOG shares are higher by 0.36% at $2,060, while FB shares are down 0.11% at $265.48 on the last check Wednesday.