Australia’s News Bargaining Incentive: Meta, Google, TikTok, and LinkedIn Face New Law
Australia’s parliament passed the News Bargaining Incentive on Thursday, ending a five-year debate that started when Meta realized it could avoid paying for news by simply not carrying any. The new law removes this option.
Application of the Law
The law applies whether or not a platform carries news and levies a 2.5% tax on advertising revenue for platforms with significant search or social media services in Australia and over A$250 million (approximately $178 million) in local advertising revenue. Originally set at 2.25%, the rate has since increased, adding LinkedIn in early August as a technical adjustment, which the industry questioned.
Purpose of the Tax
This tax is not intended to be collected but acts as a price on refusing to negotiate. Platforms can reduce or eliminate the tax by striking commercial agreements with at least eight Australian news businesses. These agreements are weighted based on the size of the publisher, with large publishers counting at 150% and small and medium outlets at 200%. No single deal can offset more than a quarter of a platform’s total liability.
Timing and Implementation
Deals must be finalized before the end of a platform’s financial reporting period to count against liability in that period, aligning the negotiating timeline with each company’s accounting practices.
Funding for News Outlets
Money not offset by agreements goes to the News Journalism Payments scheme, supporting publishers nationwide, with a focus on smaller and regional outlets.
Minister’s Statements
Anika Wells, the communications minister, emphasized the importance of journalism for "strong democracy" and accountability. Assistant treasurer Daniel Mulino highlighted the significance of Australian public interest journalism for diverse communities and the nation.
Potential Challenges
Meta has challenged the law, arguing it violates the free trade agreement between Australia and the United States. Other notable absences include AI firms, which, despite using and summarizing journalism, are not part of the legislation.
A grant layer, announced in early August, adds another dimension to the scheme, with a share of levy revenue dedicated for funding.