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Australia’s parliament has passed a law requiring major technology companies to pay a tax on their advertising revenue if they fail to strike commercial deals with local news organisations.
The News Bargaining Incentive legislation was passed on Thursday (August 20), aiming to ensure news publishers receive fair compensation when their content is used on digital platforms.
Under the new system, eligible technology companies that do not reach commercial agreements with local news organisations could face a tax of up to 2.5% of their Australian digital advertising revenue. The proceeds will be directed to the country’s local media and journalism sector.
The law will apply to major technology companies including Meta, Alphabet’s Google, TikTok and Microsoft’s LinkedIn. Companies operating significant social media or search services in Australia and earning more than A$250 million (about US$178 million) a year in local advertising revenue will fall under the scheme.
However, companies can avoid the tax by reaching commercial agreements with at least eight different news publishers within the specified timeframe. The agreements must be directly linked to news production or the publication of news content on the relevant platforms.
The legislation also provides tax credits of up to 150% for agreements with major publishers and 200% for deals with small and medium-sized news organisations. However, no single agreement can offset more than 25% of a company’s total tax liability.
The Australian government said the legislation sends a clear message to digital platforms: they can either enter commercial agreements with local news organisations or pay the prescribed tax.
The government argues that news content produced by local media helps attract users to digital platforms and generates advertising revenue, making fair compensation for news producers necessary.
The law comes as Australia continues to tighten regulation of major digital platforms. A day earlier, parliament passed legislation restricting gambling and betting advertisements.