Google, Yahoo, Facebook and eBay have criticised Singapore's move to tighten regulation of news websites.
In a letter to Singapore's Communications and Information minister, the internet companies say the proposed licensing regime has "negatively impacted Singapore's global image as an open and business-friendly country."
Under the rules, selected news websites which report regularly on Singapore would be licensed, and a performance bond of nearly $US40,000 placed with authorities.
Any story deemed objectionable by authorities would need to be taken down within 24 hours.
The executive director of the Asia Internet Coalition, which includes Yahoo and Google, Dr John Ure, says the ruling came as a shock.
"Although we had been in some discussions with the government on internet regulations and Singapore's attitude to internet regulation, which up to now has been fair and free and quite liberal, this came without any consultation with the industry," he told Radio Australia's program.
"We've made the point that all the powers are already in existence, they're all in the Broadcasting Act."
The Singapore government says the new licensing framework is not intended to curb internet freedom, but to make the rules more consistent with those governing traditional media such as newspapers.
Dr Ure says he is not aware of any particular new agenda in the increased regulation, but it does signal a worrying precedence.
"While the practice (of online media regulation) in Singapore has been good up until now, there are other countries in the region where it's not so good," he said.
"They will be looking to countries like Singapore to see what direction they're heading in."
The Singapore Government has moved quickly to consult with groups such as the Asia Internet Coalition following the decision.
Though not about the decision itself, rather the implementation.
"They've talked about amending the Broadcasting Act, to take into account the fact that many of the internet operators are not Singaporean," Dr Ure said.
The Asia Internet Coalition believes it does raise questions as to where international internet companies might invest and place their servers in the future.
The sector is worth around $77 billion to Singapore, blessed with the appropriate infrastructure and position in southeast Asia.
But the options abroad are opening up.
"Our members - Google and Facebook are members of the coalition - they're inevitably going to be looking at what the alternatives are, not just in the next six months, but over the next five years," he said.
"People inevitably look to places like Singapore for their lead.
"That's doubly important to us that they send the right signals, not the wrong signals."