Australia to Tax Meta, Google & TikTok for Journalists

Australia has proposed taxing digital giants Meta, Google and TikTok a proportion of their revenue to pay for news reporters.

Australia Proposes New Law to Make Tech Giants Pay for Journalism

The government released Tuesday’s draft legislation to introduce by July 2. It incentivizes social media firms to pay news organizations for journalism. Platforms criticized the proposal as a misguided “digital services tax” that ignores advertising evolution and won’t sustain a viable news sector. Australian Prime Minister Anthony Albanese said we must attach a monetary value to journalists’ work. Large multinationals shouldn’t take journalists’ work, generate profits, and skip compensation for creators, Albanese told reporters.

“We think investment in journalism is critical to a healthy democracy,” he added. Australia now launches its second legislative attempt to force platforms to pay for the Australian news text and images that their users view. Legislation passed in 2021 created the country’s News Media Bargaining Code, which pressured digital platforms to strike deals with Australian news publishers and pay for journalism.

Plans 2.25% Tax on Tech Giants Refusing News Deals

Platforms chose to reach commercial deals with news creators rather than face forced arbitration where a judge would set the price. But they have since avoided renewing those deals by removing news from their services. The 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.

The platforms would be given offsets and their overall costs would be lowered if they agree to pay publishers for journalism, the government said. The government expects the incentive would raise between 200 to 250 million Australian dollars ($144 million-$179 million) a year.Platforms paid news outlets that amount at the News Media Bargaining Code’s peak performance.The government would distribute that income among news organizations based on how many journalists each organization employed, Communication Minister Anika Wells said.

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The tax hits Meta (Facebook, Instagram), Google (Alphabet), and TikTok (U.S.-backed). Meta opposes: News organizations voluntarily post for value. “The idea that we take their news content is simply wrong. This proposed legislation, which would apply to platforms regardless of whether news content even appears on our services, is nothing more than a digital services tax,” Meta said in a statement.

Australia Defends Tax Plan as Tech Giants Push Back

“Government-mandated wealth transfers from one industry to another, ignoring exchanged value, won’t create a sustainable, innovative news sector. Instead, it will create a news industry dependent on a government-administered subsidy scheme,” Meta added.

Google said “we reject the need for this tax.”“It ignores the fact that Google already has commercial agreements with the news industry, misunderstands how the ad market changed and mandates payments from some companies while arbitrarily excluding platforms like Microsoft, Snapchat and OpenAI — despite the major shift in how people consume news,” a Google statement said.

TikTok did not immediately respond to a request for comment.All the targeted platforms are American. U.S. critics have argued that Australia’s News Media Bargaining Code had disproportionately cost American corporations. Albanese dismissed U.S. pushback concerns. “We’re a sovereign nation; my government prioritizes Australia’s national interest,” he said.

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