Pushing Back against U.S. Government Pushback on Non-Discriminatory Tech Regulations: The Case of Australia's Online Safety Regulation

Over the years, I've talked a lot about the distinction between, on the one hand, domestic regulation that is ostensibly about some public policy objective but actually constitutes disguised protectionism, and, on the other hand, domestic regulation that pursues legitimate policy objectives but has an incidental impact on foreign producers or companies. When a regulation constitutes disguised protection, the role of trade policy and trade agreements is clear. By contrast, when the regulatory efforts are genuinely about pursuing public policy goals, treating them as a trade issue can lead to a long-lasting and difficult to resolve conflict.

Recently, this has come up a lot in the context of tech regulation, with accusations of protectionism and responses indicating that there is a legitimate public policy being pursued. Here's a recent example from Australia that is a good illustration of how the issue arises in the real world, as Australia is considering some online safety legislation and the Trump administration is raising objections.

The proposed Australian online safety legislation and the Trump administration's response

The draft legislation in question is Online Safety Amendment (Digital Duty of Care) Bill 2026, which the Australians are in the midst of debating. The explanation of the bill by the Australian Prime Minister's office notes the following elements related to algorithmic feeds and harmful features or content:

• Users will be able to "choose to opt in to having their default feed include personalised content recommended by the algorithm"; "[a]lternatively, users can opt out of personally recommended content in their default feed and see the friends and creators they choose to follow."
• "digital services like online games, apps and AI chatbots will be required to protect under 18s from design features that have negative behavioural impacts, like addictive features or those that can have an effect on a young person’s self-esteem."
• These same services will also be required "to protect under 18s from harmful content like": "content that promotes, encourages or accelerates eating disorders"; "content that promotes hostile ideas about women and gender equality"; "pornography"; "content that glorifies crime or life endangering stunts"; and "content that causes serious mental health distress, including abuse and bullying."

The Australian government asked for feedback on the draft law, with the legislation to be introduced in Parliament this year.

The Trump administration submitted a response that puts forward a wide range of concerns. Here are some of the key arguments it made:

• "We are particularly concerned by potential mandates that would allow regulators to impose rigid, one-size-fits-all platform design requirements – such as forced chronological feeds or opt-in recommendation systems."
• "A framework that empowers governments to enforce vague definitions of 'harm' risks becoming a mechanism for viewpoint-based censorship, as platforms will be incentivized to over-moderate speech that should be protected to avoid regulatory penalties."
• "If Australia compels platforms to aggressively filter content in algorithmic feeds to satisfy a government mandate, and such filtering draws in protected speech, the effect on a disfavored speaker or media source’s reach would not be meaningfully different than outright removal.  The U.S. government would likely consider such a measure as facilitating censorship."
• "Mandated platform design features, especially when applied to algorithms, may affect what users see, say, and hear not just in or from Australia, but globally.  Platforms generally build and deploy product features at a global scale rather than market-by-market; forced platform design changes to mitigate Australia-specific risks could result in systemic changes that affect how users everywhere, including Americans, experience these platforms and reach audiences."
• "The U.S. government has made clear its opposition to foreign measures that result in extraterritorial censorship of protected speech by Americans online."
• "Regulations that impose disproportionate compliance burdens on American companies relative to competitors, or that apply unevenly across similar services, will invariably raise concerns."

I have some concerns with what each side is doing here. I'll start with the Australian legislation and then turn to the U.S. response.

How to improve social media feeds: Regulation of existing companies vs. encouraging new platforms with different business models

Starting with the merits of the draft Australian legislation, I'll focus first on the "potential mandates" for "forced chronological feeds or opt-in recommendation systems." I agree that chronological feeds and an opt-in for recommendation systems are good features for social media, and I'm happy that Australia is trying to promote them. I've never liked having someone else decide what I see on my social media feed, especially when this is done in a non-transparent way, as is generally the case. (I soured on Facebook pretty early when I realized they weren't showing me every post from people I followed, but rather using an algorithm to decide what I saw.) As a I result, I agree with the motivation behind the Australian draft as it relates to this issue.

However, I'm skeptical that government regulation is the right approach to addressing the problem. My concern is that regulation along the lines of what Australia is proposing will leave us with the same companies offering pretty much the same problematic services, with minor tweaks that don't get at the issue of the standard social media business model that is at the heart of the problem: Maximize usage of the platform, gather data on users, and sell that data to advertisers.

In my view, a better model for social media companies would be to offer chronological feeds, either as the exclusive option or as one of multiple options, and look for alternative sources of revenue besides the collection and sale of data. For me, the most useful thing the Australian government and other governments could do to move things in this direction would be the following:

• Use the bully pulpit to encourage companies to offer chronological feeds or feeds that people can customize in a transparent way.
• Use the bully pulpit to encourage their citizens to use chronological feeds or customized feeds.
• In their own social media activities, use services that take this approach rather than services that rely on non-transparent company-provided algorithms. And if they find the existing range of social media services inadequate, encourage companies to build new ones around a different model.

The goal here is to shift the market in the direction of new business models. A model based on toxic engagement and selling user data is one way to make money in this market, but it is certainly not the only one, and it would be nice if we had more options.

I'll go even further here and say that legislation of the sort Australia is proposing could distract from what is needed. When politicians make claims that regulation will address a problem, it causes people to think the problem is being solved for them, and steers them away from doing what needs to be done themselves: Building and using alternative platforms, ideally ones that are interoperable with each other (i.e. decentralized social media) rather than the "walled garden" platforms many people use today.

Finally, as to governments trying to influence what shows up in algorithmic feeds, which is also part of the Australian draft legislation, I think that while it is well-intended, it may not work out as well as people hope. Each change in government could mean a shift in what exactly government officials are worried about people seeing in their feeds, with these feeds turning into an endless back and forth between right-wing and left-wing agendas. In my view, regulating the content of company-provided algorithms is unlikely to go well, and I think this supports my earlier point that we should all try to avoid this type of feed.

Pushing back on U.S. government pushback against foreign tech regulation

While I'm not thrilled about aspects of the Australian legislation – because I see what they are going for but I question whether it is the right approach to getting there – I'm even less enthusiastic about the Trump administration's response. As far as I can tell, none of what Australia is doing is intended to discriminate against American products companies. As a result, I'm not convinced the U.S. government should be pushing the issue with the Australian government in the way it is doing here.

In my view, governments should tread carefully when offering criticism of foreign regulations. All regulations can affect the interests of exporters from the contesting government's country, but the impact of these regulations varies considerably, ranging from an equal impact on all companies, a disparate impact on foreign companies, and a disguised attempt to protect domestic producers from foreign competition. Here, there is nothing to suggest that the Australian legislation should be thought of as disguised protectionism, and I think that is an important consideration.

A key part of my thinking here is a concern with whether international trade principles intrude too much into domestic policy-making. If we rely on a principle of international trade under which "disproportionate compliance burdens" are sufficient to constitute an actionable trade barrier, it could lead to trade conflicts that cannot easily be resolved. When a government is regulating in a way that it genuinely sees as in the public interest, objections by other governments come across as an intrusion into sovereignty or policy space. As we've seen over the years, that often goes badly.

Obviously, the affected companies themselves can express their views to the Australian government, and they should probably do so here. If you are operating in the Australian market, you have an interest in these matters, and can offer your perspective. But other governments doing the pushing in the form of complaints about "market access" and "trade treatment" is something very different, and has broader implications for the overall functioning of the trading system (the administration's response says "the proposed digital duty of care regime, depending on how it is implemented, potentially raises significant concerns regarding fair competition, market access, and trade treatment for American companies, independent media, and content creators").

Turning to the "censorship" issue, I raised some concerns above with the Australian approach (although I'm not sure I have a good sense of what this approach would mean in practice), but I have even stronger concerns with the Trump administration's reaction.

One issue is that there's plenty of censorship going on in the U.S. right now, so making allegations about Australia's censorship feels odd.

Another issue is that speech policies are always going to vary by country, based largely on the views of the people of that country as to what speech should be allowed. Americans may prefer a certain approach at the moment (or maybe they don't even like the current approach, as the policies are set by the Supreme Court to a great extent), but that's not an argument for telling other countries how they should do things on speech policy, and I think the U.S. government should be very careful about telling others what to do.

That's not to say it should do nothing about concerns related to free speech in other countries though. What I think would be useful here is if there were an international body that served as a forum for governments to talk about comparative speech policies and the extraterritorial effect of domestic speech policies. Everyone would probably learn a lot from that exercise.

In terms of the impact of the draft legislation on U.S. companies, I can understand how this sort of regulation is a big pain for companies who operate in different markets, and who will have to tailor their services for local statutes and regulations. But that's just how things work, and they will have to figure out how to deal with it. If a particular company wants to follow only American laws, it can do so: Just offer the service only in the U.S. The U.S. is a big market, so there's still plenty of money to be made if they don't want to adapt to foreign regulations. On this point, the Trump administration says:

Platforms generally build and deploy product features at a global scale rather than market-by-market; forced platform design changes to mitigate Australia-specific risks could result in systemic changes that affect how users everywhere, including Americans, experience these platforms and reach audiences.

That may be true where you have walled garden platforms operating globally, but that's not a great system and this approach is in need of disruption. What would be better is if we had decentralized social media, in which all of the platforms could connect, and you had U.S. companies following U.S. law, Australian companies following Australian law, etc., with users in each place still being able to connect with each other.

Finally, the Trump administration is also concerned about Australia forcing companies to do filtering of algorithmic feeds. To me, this is just more evidence that algorithmic feeds have some fundamental flaws, and people should consider alternatives to company-provided feeds (and companies themselves should deemphasize them). I know there are some people who prefer algorithmic feeds to chronological ones, although despite many conversations I've had on this issue, it's still not clear to me why they prefer this. Regardless, I do recognize that there is some demand for these feeds, and what I would suggest here is that if companies are going to offer them, they should give users the ability to configure them so that people have a better sense of what they are getting.

Conclusion

Summing all this up, what I would like to see here is Australia take its concern about the impact of social media feeds and online content, which I think is a legitimate worry, and channel it into something a bit more productive. As the same time, I wish the U.S. would focus on rooting out disguised protectionism in foreign tech regulations rather than complaining about any and all regulations that have an impact on U.S. companies or reflect different values than those of the administration in power at that moment.