Powerful US tech lobby groups have taken aim at Australia’s proposed News Bargaining Incentive, labelling it as a “digital services tax” and hinting that Donald Trump, who has been heavily backed by tech bros, could step in. In letters to the Australian Government’s consultation about the incentive, they claimed the proposal is a draconian and “discriminatory” tax against a few of the largest US tech companies and that it would encourage tax avoidance, which Silicon Valley tech firms are already notorious for.
The proposed News Bargaining Incentive aims to compel tech giants like Google, Meta, TikTok, Apple and Microsoft to strike commercial deals with local news publishers to pay a fee for distributing news content. The incentive rate is proposed at 2.25% of total revenue, based on a 150% deduction rate, aimed to encourage deals roughly equal to 1.5% of revenue.
The incentive is targeted at ensuring the adoption of commercial arrangements with media companies. It is intended to apply to large digital platforms operating significant social media or search services, irrespective of whether they carry news content or not (they all do, and book billions in advertising revenue that they off shor for tax avoidance purposes).
Platforms that choose not to enter or renew commercial arrangements with news publishers would pay a levy based on their Australian revenue. Deals with news publishers can be offset against that charge so that platforms pay less if they reach agreements. The idea is to make social media companies come to the table with commercial deals are more financially attractive option.
Companies like Google and Meta, which distritbute a lot of news content, often shift most of their ad revenue offshore under legal processes, while Australian news outlets are left struggling financially. Media companies, which publish content on these platforms to reach bigger audiences, claim that the value exchange is not fair.
Meta agrees with the position of US tech lobby groups while Google said it wants to support Australian journalism. In a recent blog, Google said it continues to support a wide range of titles, “This includes a range of Australian regional publishers like Victor Harbor Times, Loddon Herald and Naracoorte Community News, building on the earlier renewals of mainstream and digital publishers like Australian Community Media, Junkee, Mamamia, Yahoo, Private Media, The Conversation, Schwartz Media, QNews, Australian Jewish News and Southern Cross Austereo.
“Since 2020, we have signed agreements with 88 Australian publishers, representing 226 media outlets across the country. In the last year alone, we’ve renewed agreements with 60 publishers and we remain the only technology company that has maintained commercial partnerships with the Australian news industry since 2020.”
The proposed News Bargaining Incentive aims to compel these platforms to pay for news content, aimed at sustaning journalism and preventing a further erosion of the Australian media landscape.
The new incentive is designed to fix weaknesses in the 2021 news media bargaining code by ensuring platforms cannot simply opt out of deals, as mMeta has done, and securing funding for Australian journalism.One complaint by the lobby groups is that it is a ‘digital tax service’ without any transparency about whether the money supports public interest journalism.
This new legislation can be interpreted as a response to Meta refusing to renew any of its 13 deals with Australian media outlets that it formed under the News Media and Digital Platforms Mandatory Bargaining Code. Meta did a similar thing in Canada and when the Canadian government tried to pressure the company through Canada’s Online News Act, Bill C-18, it instead wiped all Canadian news content from all of its platforms.
Powerfiul US lobby groups like NFTC, SIIA & CCIA (representing the major tech companies) are threatening Albanese to revise the proposed legislation or for Trump to get involved on the basis of breaking the Australia-US Free Trade Agreement.
The trade groups main concerns surrounded discrimination claims, inconsistencies with foreign trade agreements and how any fees obtained would be used to benefit Australian journalism.
SIIA argued that the Incentive primarily targeted large US tech companies and referred to the incentive as a “digital services tax on primarily US platforms”. However, SIIA failed to recognise that the incentive would also affect ByteDance, a Chinese tech giant. The trade group also voiced concerns over potential violations of the Australia-US Free Trade Agreement signed in 2005. They described the incentive as “the type of measure that the Trump Administration has said it might retaliate against”.
That criticism sits uneasily alongside the financial reality of how these big, multinational tech giants operate in Australia. According to figures from the Australia Financial Review in 2022 Google and Facebook reported combined Australian digital advertising sales of $8.3 billion. Yet $7.26 billion of that was labelled as “reseller revenue” to offshore parent companies, effectively shifting most of the cash out of the ATO’s reach. Facebook alone declared $1.26 billion in ad revenue but paid most of it to Facebook Ireland
This left just $224.6 million locally and a net profit of $34.7 million, a 2.7 per cent margin compared with Meta’s global net margin of 35 per cent. Across Apple, Google, Facebook and Microsoft. The AFR estimated more than $25 billion was extracted from Australia in 2022. This reinforces that even if the incentive were framed as a digital services tax, these companies are already highly adept at minimising their local tax exposure through well-established profit-shifting structures and regulatory loopholes.
The CCIA criticised what it called an “outdated understanding of how audiences consume, discover and even engage with news”. The trade group argued that search engines and social media platforms are not primary vessels through which audiences access news, instead pointing the finger at new technologies and the evolution of Generative AI.
CCIA warned the incentive risks being anchored to an ecosystem that has already evolved beyond the assumptions the framework was built upon.
The trade group recognised “the everchanging technological landscape” noting the solidification of Generative AI serving as a primary channel in Australian journalism. While the incentive does not account for how genAI is reshaping the Australian newsroom, it failed to address Google’s blatant use of GenAI as part of its ‘AI Overview’.
With AI Overviews now presenting information directly to users, these summaries increasingly function as a form of news delivery in their own right, raising questions about whether such AI-generated outputs should fall within the scope of the incentive.
The NFTC trade group has also raised concerns about the use of funds generated under the proposed News Bargaining Incentive, questioning whether the mechanism would meaningfully support Australian journalism.
While the consultation paper for the News Bargaining Incentive states that “The Government will collect no revenue from it,” the NFTC argues this assurance leaves a critical gap.
It does not clearly explain where any collected funds would flow, how they would be allocated, and whether they would be directed toward sustaining public-interest journalism.
According to the trade group, lack of transparency around fund distribution risks undermining the policy’s stated objective of supporting news media. Without explicit structures to ensure payments are channelled into Australian newsroom investment, or regional reporting, the group warns the incentive could operate without delivering tangible benefits to Australia’s media ecosystem.
