Australia imposes new levy on tech giants to support news publishers

The Australian government has introduced a new initiative known as the news bargaining incentive (NBI), aimed at compelling large digital platforms to remunerate Australian news outlets for their content. Announced on Thursday, the NBI follows the previous Morrison government’s news media bargaining code (NMBC) and is designed to close loopholes that allowed tech giants to minimise their payments to publishers.

The NBI imposes a levy on digital platforms with Australian revenues exceeding $250 million, targeting major players such as Alphabet, Meta, ByteDance and potentially Microsoft. The levy roll-out is planned for the coming year, with specifics including the levy’s size yet to be determined. Responsible ministers Michelle Rowland and Stephen Jones indicated that addressing the deficiencies in the NMBC — which previously allowed tech companies to evade fair compensation for news content — was a primary objective of the new policy.

Critics of the NMBC argue that it fell short as tech companies found ways to sidestep negotiations, including blocking news content altogether as was seen in Canada. Notably, the new structure guarantees that tech companies cannot bypass responsibilities by excluding news content; they will be mandated to pay regardless of their engagement with news outlets. The companies can offset any commercial deals made with media organisations against their levy obligations, thereby presenting a choice between directly compensating publishers or contributing to the government fund, which will then distribute the payments.

While the introduction of the NBI could alleviate the potential of a news blackout on social media platforms — where a significant portion of Australians rely on for news — it has raised concerns over the influence that companies like Meta may retain over the funding distribution. Meta’s previous threats to eliminate news from its platforms raise the spectre of retribution against such legislative pressures, and potential conflict over the form and channels of compensation could persist.

Recent discussions within a Labor-led parliamentary committee have suggested implementing “must carry” requirements, akin to obligations placed on radio and television broadcasters to provide public interest content, thereby ensuring that significant platforms carry journalism as a matter of course. However, the viability of such a legislative approach remains unclarified, leading to uncertainty about how platforms may react to the NBI.

The introduction of the NBI can be viewed as a mixed bag. While it addresses a critical gap in media remuneration, concerns have been voiced regarding favouritism towards larger media networks during the allocation of resources. Critics cite the possibility that platforms may enter into exclusive agreements with prominent news organisations — such as News Corp, Seven and Nine — leaving smaller, independent outlets at a disadvantage and potentially inhibiting the diversity of voices within Australian journalism.

The government’s allocation of $180 million to bolster local news organisations and community broadcasting aims to provide some support for underfunded media. However, as the details of the NBI are further refined, questions remain about the full impact on smaller news outlets and how effectively the funds will reach less prominent publishers.

Rumours of governmental hesitation regarding direct taxation on US tech companies stem from fears of retaliation from major industry figures — including Elon Musk — against potential trade relationships. Observers have pointed out the implications if the government were to bypass traditional commercial negotiations in favour of direct funding to news outlets.

The push for a more equitable distribution of resources in the news media landscape contrasts with a growing perception that policies may still bend towards the preferences of established media conglomerates. As the landscape continues to evolve, the need for a balance that supports a diverse range of Australian publications remains crucial.

Source: Noah Wire Services