Tech giants Facebook and Google against new U.S. legislation that seeks to aid struggling news publishers by allowing them to negotiate collectively against the tech companies over revenue sharing and other deals.

U.S. lawmakers introduced the plan in Congress to address a perceived power imbalance between news outlets and the tech giants. Critics accuse the companies of using content to drive traffic and ad revenue to their platforms without fairly compensating the publishers.

The move adds to pressure on the tech firms, which are facing antitrust lawsuits and the threat of more regulation.

Google, which declined comment on the proposal, launched a website asserting it is "one of the world's biggest financial supporters of journalism" by virtue of the ad revenue and content licensing fees it provides to media. Google said its search engine sends readers to publishers' websites 24 billion times per month.

Also opposing the bill are two technology industry trade groups that Facebook and Google belong to -- the Computer & Communications Industry Association and NetChoice.

“Objective news coverage is a public good, but we don’t think the way to fund that public good is by constructing a cartel,” said CCIA President Matt Schruers.

The group opposed a 2019 version of the legislation and views the proposed joint bargaining as a way of restricting competition.

Some industry observers say the proposal could disproportionately benefit private equity firms and hedge funds that have snatched up medium and large newspaper chains. Newspapers such as the Chicago Tribune and the Miami Herald are controlled by the likes of Alden Global Capital and Chatham Asset Management.

The bills come not long after Facebook battled with Australia over how much it should pay news publishers for their content. During the fight, Facebook blacked out Australian news pages and only restored them once the government granted concessions

Senator Amy Klobuchar, a Democrat who sponsored the bill in the Senate, said the Australia dispute illustrated Facebook’s outsized clout and the need to give publishers more leverage. “We have to have an even playing field and allow people to negotiate,” she said in a congressional hearing.

Source- Reuters

Country- U.S