MELBOURNE, Australia — On Thursday, officials from the Australian government announced plans to impose a tax on large digital platforms and search engines unless they agree to distribute revenue with local news media organizations.
The tax is set to take effect on January 1 and will target technology companies that generate over 250 million Australian dollars (approximately $160 million) annually from Australian operations. This includes well-known entities such as Meta, Google’s parent company Alphabet, and ByteDance, which owns TikTok.
Although the exact rate for the tax has not been disclosed, government representatives, including Assistant Treasurer Stephen Jones and Communications Minister Michelle Rowland, have indicated that the intent is to encourage revenue-sharing agreements between these tech firms and Australian media outlets, making the sharing option more financially appealing.
“The primary goal here is not to collect taxes — we actually hope not to generate any revenue. The essential aim is to foster agreements between the platforms and Australian news organizations,” Jones stated during a press briefing.
This announcement follows Meta’s recent decision not to extend existing three-year contracts for compensating Australian news publishers for their content. Previously, a law called the News Media Bargaining Code was enacted in 2021, compelling tech companies to negotiate revenue-sharing arrangements with Australian media or face significant penalties of 10 percent of their Australian revenue.
Meta responded to the new proposal, calling the current legislation flawed and expressing concern about the notion of charging one sector to benefit another.
“The proposal does not reflect the realities of our platforms. Most users do not come to our platforms specifically for news, and news publishers choose to share their content on our platforms because they find value in doing so,” the company declared in their statement.
In contrast, Google has successfully established revenue-sharing partnerships with over 80 Australian news organizations over the past three years and plans to continue those agreements. However, Google raised concerns over the government’s latest approach, suggesting that the specific tax could undercut the sustainability of existing commercial arrangements with news publishers.
“The new targeted tax may jeopardize the ongoing viability of our agreements with news publishers in Australia,” a Google spokesperson stated. They expressed the need to thoroughly evaluate the announcement and its potential implications.
TikTok, on its part, pointed out that its audience does not primarily seek news on their platform. “As an entertainment platform, TikTok has never positioned itself as a news source. We intend to participate in the consultation process and look forward to more information,” a TikTok spokesperson mentioned.
Jones also highlighted that Australian government officials have shared their motivations with counterparts in the United States, where most digital giants operate. He emphasized that this initiative should not be perceived as a traditional tax.
“We want to ensure they grasp our reasoning and recognize that this is, in fact, an incentive designed to strengthen a law that has been in place in Australia since 2021,” Jones explained.
Rowland added that the revenue-sharing initiative is crucial for protecting democratic values in Australia, noting, “The accelerated expansion of digital platforms has significantly altered Australia’s media environment, putting public interest journalism at risk.”
“The intention of this policy is crystal clear: to foster agreements between digital platforms, search engines, and Australian news publishers to help sustain the health of our democracy,” she concluded.