Australia Threatens Big Tech With 2.75% Revenue Tax Over News Bargaining Deals

Major tech platforms including Meta, Google, TikTok, and LinkedIn face a 2.75 percent tax on their Australian revenues unless they secure funding agreements with at least eight domestic news organizations before the end of their annual reporting periods. The legislation, approved by both chambers of Australia’s parliament, levies financial penalties on major digital platforms that fail to strike commercial arrangements to fund local journalism. Under the measure, direct payments made under eligible news-funding deals will reduce the final tax liability owed by the platforms.

The tax specifically targets digital operators generating more than AU $250 million ($178 million) in domestic advertising revenue while running a major search engine or social media platform. According to a Reuters report, funds collected through the assessment will be distributed directly to news organizations to compensate for content that drives user engagement and ad revenue on these digital services. Individual publisher payouts will be calculated based on newsroom staffing levels, factoring in both full-time journalists and freelance contributors.

Digital advertising spending has shifted overwhelmingly toward search and social media giants over the past decade, stripping billions in ad dollars from traditional print and digital publishers. By anchoring levy payouts to newsroom headcount, the updated framework aims to incentivize direct employment of reporters rather than rewarding platforms for distributing low-cost aggregator content.

Supplanting earlier framework rules established in 2021, the updated measure comes after Australian officials declared the previous voluntary bargaining guidelines ineffective. Following the passage of that initial law five years ago, Meta retaliated by temporarily blocking news links and publisher pages across Australia before eventually signing multi-year commercial agreements that expired two years ago. The social media giant executed a matching strategy in Canada three years ago, permanently shutting off news sharing for Facebook and Instagram users in response to similar regulatory mandates.