Australia To Impose Tax On Tech Giants Over Revenue-Sharing With News Outlets

On Thursday, the Australian government announced plans to impose a tax on major digital platforms and search engines unless they agree to share revenue with Australian news media, as reported by the AP.

This is part of Australia’s ongoing efforts to regulate big tech companies. Last week, lawmakers passed a new law that prohibits children under 16 from using social media.

The new tax, set to take effect on January 1, will target tech companies generating over 250 million Australian dollars ($160 million) annually from Australian operations, according to Assistant Treasurer Stephen Jones and Communications Minister Michelle Rowland, as reported by the AP.

This includes companies like Meta, Alphabet (Google’s parent company), and ByteDance, the Chinese owner of TikTok.

The tax will be offset by payments to Australian media outlets, though the exact tax amount remains unclear. The government intends to make revenue-sharing the more cost-effective option.

“The news bargaining initiative will … will create a financial incentive for agreement-making between digital platforms and news media businesses in Australia,” Jones said as reported by Reuters.

The AP notes that a previous government introduced the News Media Bargaining Code in 2021, which required tech giants to negotiate revenue-sharing agreements with Australian media companies or face fines of 10% of their Australian revenue.

CBC pointed out that in August 2023, Meta blocked news links in Canada to avoid paying fees to media companies.

Since then, Canada has become the focal point of Facebook’s conflict with governments that have enacted or are considering laws requiring internet giants to compensate media companies for linking to news published on their platforms.

In response to the Australian ban Meta said in a statement that the current law was flawed. “The proposal fails to account for the realities of how our platforms work, specifically that most people don’t come to our platforms for news content” Meta statement said, as reported by CBC.

“News publishers voluntarily choose to post content on our platforms because they receive value from doing so,” Meta statement added,

CBC notes that Google has struck revenue-sharing agreements with more than 80 Australian news companies in the past three years and has committed to renewing those deals. But Google has raised doubts about the government’s new approach.

“The government’s introduction of a targeted tax risks the ongoing viability of commercial deals with news publishers in Australia,” a Google statement said, as reported by CBC.

TikTok noted that its users didn’t seek news. “As an entertainment platform, TikTok has never been the go-to place for news. We will actively engage in the consultation process and look forward to hearing more details,” a TikTok statement said, as reported by CBC.

Rowland said the revenue-sharing was needed to safeguard Australian democracy. “The rapid growth of digital platforms in recent years has disrupted Australia’s media landscape and it is threatening the viability of public interest journalism,” Rowland commented, as reported by CBC.