Australia is moving to impose a new revenue-based tax on major digital platforms if they fail to pay news publishers for journalism content shared across their services.
Australia Targets Big Tech With New News Funding Plan
On Tuesday, the Australian government released draft legislation that would require Meta Platforms, Inc. (NASDAQ:META), Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google and TikTok to pay a 2.25% levy on their Australian revenue unless they strike commercial deals with news organizations, NPR reported.
Officials said the plan is designed to support struggling media outlets and ensure journalists are compensated for content used on social platforms.
Revenue Tax Designed To Incentivize News Deals
The proposal, called the News Bargaining Incentive, would lower costs for platforms that agree to pay publishers directly.
If implemented, revenue collected from non-compliant companies would be redistributed to news organizations based on newsroom size.
The government estimates the measure could raise between AUD 200 million ($1.432 billion) and AUD 250 million ($1.791 billion) annually, roughly matching previous payments made under Australia’s earlier bargaining framework.
Government Says Journalism Is Essential To Democracy
Prime Minister Anthony Albanese defended the plan, arguing that media content should not be freely monetized by global tech firms.
“We think that investment in journalism is critical to a healthy democracy,” Albanese said.
Tech Giants Push Back On Proposed Tax
The companies criticized the plan, calling it a disguised digital services tax.
Meta told the publication that the publishers “voluntarily post content on our platforms because they receive value from doing so.” It warned that the policy could create an unsustainable subsidy model.
In a statement to Benzinga, Google said it already has agreements with publishers and rejected the need for additional taxes.
“While we are currently reviewing the draft legislation, we have been clear: we reject the need for this tax. It ignores the fact that Google already has commercial agreements with the news industry,” the Google spokesperson said.
Meta and TikTok did not immediately respond to Benzinga’s request for comments.
White House spokesperson Kush Desai said in a statement to Australian media outlets on Wednesday that President Donald Trump remains committed to protecting the U.S. technology sector from digital services taxes and other forms of foreign pressure, Capital Brief reported.
He added that the administration will continue engaging trading partners on the issue.
Renewed Clash Over News And Platform Power
Australia previously passed a 2021 law that pushed platforms into payment deals with publishers, but many agreements have since lapsed as companies reduced news visibility on their services.
The new proposal is expected to be introduced to Parliament by July 2.
Australia Probes Social Media Giants Over Under-16 Rules
Last month, Australia’s eSafety Commissioner, Julie Inman Grant, also said regulators are examining whether Meta, Snap Inc. (NYSE:SNAP), TikTok and YouTube, a unit of Google, have violated Australia’s new regulations limiting access for users under the age of 16.
Price Action: Meta closed at $671.34 on Tuesday, down 1.07% and rose to $671.77 in after-hours trading. Alphabet Inc. shares ended Tuesday lower, with Class A falling 0.16% to $349.78 and Class C slipping 0.29% to $347.50. Both ticked up slightly in after-hours trading, according to Benzinga Pro.
Data from Benzinga Edge shows that Alphabet Inc. (GOOGL) ranks in the 95th percentile for Quality, reflecting strong performance across short, medium and long-term trends.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Poetra.RH / Shutterstock
Recent Comments