LDN - Business

Australia plans to tax digital platforms that don't pay for news

[December 12, 2024] By ROD McGUIRK

MELBOURNE, Australia (AP) — The Australian government said Thursday it will tax large digital platforms and search engines unless they agree to share revenue with Australian news media organizations.

The tax would apply from Jan. 1 to tech companies that earn more than 250 million Australian dollars ($160 million) a year in revenue from Australia, Assistant Treasurer Stephen Jones and Communications Minister Michelle Rowland said.

They include Meta, Google-owner Alphabet and ByteDance, the Chinese owner of TikTok.

The tax would be offset through money paid to Australian media organizations. The size of the tax is not clear. But the government aims to make sharing revenue with media organizations the cheaper option.

"The real objective ... is not to raise revenue -- we hope not to raise any revenue. The real objective is to incentivize agreement-making between platforms and news media businesses in Australia,” Jones told reporters.

The move comes after Meta, which owns Facebook, Instagram and WhatsApp, announced that it would not renew three-year deals to pay Australian news publishers for their content.

A previous government introduced in 2021 laws called the News Media Bargaining Code that forced tech giants to strike revenue-sharing deals with Australian media companies or face fines of 10% of their Australian revenue.

Meta said in a statement the current law was flawed and the U.S. company continued to have “concerns about charging one industry to subsidise another.”

"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 and that news publishers voluntarily choose to post content on our platforms because they receive value from doing so,” the statement said.

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.

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Assistant Treasurer Stephen Jones, left, and Minister for Communications Michelle Rowland attend a press conference in Sydney, Thursday, Dec. 12, 2024. (Mick Tsikas/AAP Image via AP)

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.

“We are reviewing today’s announcement and will have more to say once we’ve assessed the full impact,” Google added.

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.

Jones said Australian officials had explained the government's intentions to their counterparts in the United States, where most of the digital giants are headquartered. President-elect Donald Trump's administration is planning to increase tariffs against some countries, which has the potential to trigger trade wars.

“We want to ensure that they understand the reasoning, also understand that this is not a tax in the normal sense of the word,” Jones said.

“This is an incentive to bolster up a law that has existed in Australia since 2021,” he added.

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 said.

“The policy intent here is very clear. It is to incentivize deals between digital platforms, search engines, and Australian news publishers in order to support the health of our democracy,” she added.

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