Report from Reuters
In Brief – Australia has passed legislation enacting the News Bargaining Incentive, a 2.5% tax on the advertising revenues of large social media and search businesses that do not pay Australian media companies sufficient funds for content showing up on their digital platforms. The tax scheme applies to covered digital services with local advertising revenue exceeding A$250 million ($178 million), currently meaning Meta, Google, TikTok and LinkedIn. Those companies can reduce, and even eliminate, their tax liability by reaching direct payments agreements with at least eight Australian publishers. Payments to large publishers receive a 150% offset against the platform’s new tax obligation, agreements with small and medium-sized Australian outlets receive a 200% offset, and no individual media payments deal can account for more than 25% of a platform’s total media payments liability.
Context – Media companies have been lobbying their home governments for years to require digital giants, especially Google and Meta, to pay them when their content appears on the platforms. Australia and France were leaders. Australia enacted its News Media Bargaining Code in 2021 to pressure Google and Meta to agree to content licensing rates. The two companies capitulated. France used the neighboring rights provision of the 2019 EU Copyright Directive and the threat of antitrust sanctions to force Google to pay French media when “snippets” were used in search results. The biggest change in recent years occurred in 2023 when Canada enacted an Australian-styled law. Google again agreed to pay up, while Meta refused and instead blocked news uploads in Canada. Meta, which had been paying Australian media companies around $75 million per year, announced in late 2024 similar plans for that country’s media companies. The government responded with their tax “incentive” idea. In recent years, online publishers have become very worried about AI upending their online revenue ecosystem. Despite publisher calls to bring chatbots into the Australian media payments regime, they were not included.