Australia Proposes Tax on Tech Giants to Fund News Industry

Australia released draft legislation Tuesday imposing a 2.25% tax on local revenues of Meta, Google, and TikTok unless they pay news outlets directly, with the government expecting to raise AU$200-250 million ($144-179 million) annually to fund journalism based on newsroom employment. The proposal represents Australia's second attempt to force digital platforms to compensate news organizations after its 2021 News Media Bargaining Code, which initially generated AU$200-250 million per year but collapsed when platforms began removing news content rather than renewing deals. Prime Minister Anthony Albanese defends the measure as critical to democracy and national interest, while Meta and Google reject it as an unfair digital services tax that ignores existing commercial agreements and arbitrarily excludes other platforms like Microsoft and OpenAI. The targeted companies, all American, face criticism from U.S. observers who argue Australia disproportionately burdens American corporations.

Australia's Proposed Tax on Digital Platforms to Fund Journalism

• ▪The Australian government would distribute income from the News Bargaining Incentive among news organizations based on how many journalists each organization employed
• ▪The Australian government expects the News Bargaining Incentive would raise between 200 to 250 million Australian dollars ($144 million-$179 million) a year
• ▪Under Australia's proposed News Bargaining Incentive, platforms would be given offsets and their overall costs would be lowered if they agree to pay publishers for journalism
• ▪The Australian government released draft legislation Tuesday that it intends to introduce to Parliament by July 2
• ▪Australian Prime Minister Anthony Albanese said investment in journalism is critical to a healthy democracy
• ▪Australia's proposed News Bargaining Incentive tax would apply to Meta Platforms, Google, and TikTok
• ▪Australia's proposed News Bargaining Incentive would charge major platforms that choose not to strike commercial deals with news publishers a 2.25% tax on their Australian revenue

Platform Responses and Criticisms of the Legislation

• ▪Google said Australia's proposed News Bargaining Incentive mandates payments from some companies while arbitrarily excluding platforms like Microsoft, Snapchat and OpenAI
• ▪Google said Australia's proposed News Bargaining Incentive ignores that Google already has commercial agreements with the news industry
• ▪All the platforms targeted by Australia's proposed News Bargaining Incentive are American
• ▪Meta said Australia's proposed News Bargaining Incentive is nothing more than a digital services tax
• ▪U.S. critics have argued that Australia's News Media Bargaining Code had disproportionately cost American corporations
• ▪Digital platforms criticized Australia's proposed News Bargaining Incentive as a digital services tax that misunderstood the evolving advertising industry
• ▪Australian Prime Minister Anthony Albanese said his government will make decisions based upon the Australian national interest
• ▪Google rejected the need for Australia's proposed News Bargaining Incentive tax

Evolution from the 2021 News Media Bargaining Code

• ▪Australia passed legislation in 2021 that created the country's News Media Bargaining Code
• ▪Digital platforms chose to reach commercial deals with news creators rather than be forced into arbitration under Australia's 2021 News Media Bargaining Code
• ▪Digital platforms were pressured to strike deals with Australian news publishers to pay for journalism by the 2021 News Media Bargaining Code legislation
• ▪Digital platforms paid Australian news outlets about 200 to 250 million Australian dollars per year when the News Media Bargaining Code was working at its peak

Perspective of Australian government

• ▪The Australian government designed the News Bargaining Incentive to address digital platforms avoiding deal renewals by removing news from their services