The Australian government, which has already imposed strict regulations on American tech firms operating in the country, now expects these companies to pay taxes to support Australian journalism.
On Tuesday, Australia unveiled draft legislation for a “News Bargaining Incentive,” which would require major tech companies, including Meta, Google, and TikTok, to make commercial deals with news organizations or face a 2.25 percent tax on local revenue, reports The Wall Street Journal. Companies would be incentivized to comply by receiving offsets of either 150 or 170 percent, effectively reducing the tax. The legislation would not apply to AI companies.
Prime Minister Anthony Albanese told reporters that the bargaining incentive would bring in an expected 200 to 250 million Australian dollars, “every single dollar” of which “will go back to journalists.”
Australia’s communications minister, Anika Wells, pitches this as a way to fix the country’s old News Media Bargaining Code, which took effect in 2021. Like the legislation introduced this week, that code pressured designated tech companies to pay journalistic outlets for news. Google and Meta initially entered into agreements with news outlets. But when Meta’s contract expired in 2024, the company refused to renew, arguing that just 3 percent of its content was news-related.
A Meta spokesperson criticized Australia’s most recent proposal as a “digital services tax,” writing on X: “News organizations opt to post content on our platforms because they get value from it. We don’t take their news content. Yet the tax applies whether or not news content appears on our platforms.”
Google is also pushing back against the tax, explaining in a statement that the proposal “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.”
The Australian government has a history of meddling in its country’s information environment. In December, it prohibited people under the age of 16 from using social media platforms. Enforcement has been rocky, and many young Australians have successfully evaded the ban. Instead of accepting that kids are savvy enough to evade restrictions, the Australian government threatened to sue Facebook, Instagram, Snapchat, TikTok, and YouTube for noncompliance.
The mission to save local journalism may appear well-meaning. Who doesn’t want to support original reporting? But the new scheme would not just benefit scrappy reporters at small-town papers doing shoe-leather journalism. While it offers incentives for tech companies to strike deals with smaller organizations, the companies could still reduce their tax burden by making deals with larger operations. Australia’s major news organizations, including News Corp Australia, the Australian Broadcasting Corporation, and Nine Entertainment Co., have been vocal supporters of the code and would likely be its major beneficiaries.
And even if the new code gives a boost to struggling newsrooms, that wouldn’t address the journalism industry’s underlying problems. It would impose a system where Australian newsrooms rely on another country’s tech industry for survival. The more durable, albeit challenging, path forward for newsrooms is to reach audiences and secure funding without a government middleman.
