Canberra: Australia has passed a new law designed to make some of the world's biggest technology companies provide financial support to Australian news organisations. The measure targets major digital platforms including Google, Meta, TikTok and LinkedIn and is intended to strengthen the position of local news publishers in their negotiations with powerful technology companies.
The new system, known as the News Bargaining Incentive, gives large technology companies a clear choice. They can reach commercial agreements with Australian news publishers and support the production and distribution of local journalism, or they can face a levy based on their digital advertising revenue in Australia.
Under the legislation, companies covered by the scheme can face a levy of 2.5 per cent of qualifying Australian digital advertising revenue if they do not meet the requirements. The rules apply to platforms with significant search or social media services in Australia and more than 250 million Australian dollars in revenue. The government says the measure is intended primarily as an incentive for companies to negotiate rather than simply as a new tax.
To avoid the levy, a technology company must reach agreements with at least eight different Australian news publishers during the relevant reporting period. This requirement has been increased from an earlier proposal that would have required agreements with six publishers. The change is intended to ensure that the benefits are not concentrated among only a few large media organisations.
The law also gives greater weight to agreements with smaller publishers. Deals involving major publishers can count for 150 per cent of their value when calculating the amount that offsets the levy. Agreements with small and medium sized publishers can count for 200 per cent. At the same time, a single agreement cannot account for more than 25 per cent of a company's total levy liability.
The changes come after years of tension between the Australian government, traditional media companies and global technology platforms. Australia has argued that news organisations invest heavily in journalists and original reporting while large digital platforms benefit from the audience and advertising generated around online information.
The government believes the decline of traditional advertising revenue has placed considerable pressure on Australian journalism. Newspapers and other news organisations have faced falling revenue, newsroom closures and reductions in local reporting. The concern is particularly strong in regional communities where a local newspaper may be one of the few organisations providing regular coverage of councils, courts, schools, businesses and community events.
The new legislation is also a response to changes in the relationship between technology companies and news publishers. Meta has previously reduced its involvement with news in Australia and stopped renewing several commercial arrangements with publishers. Google has maintained a larger role in news partnerships, although it too has changed some of its agreements with Australian publishers.
This has created a difficult problem for the government. If technology companies are required to pay for news, they could respond by reducing the amount of news they distribute through their services. That could hurt publishers that rely on platforms for traffic and audience growth. The government therefore wants to encourage payment agreements without making Australian news disappear from major digital services.
The final legislation has also changed during months of political and industry negotiations. The levy was increased from an earlier proposed rate of 2.25 per cent to 2.5 per cent. However, the government agreed that the calculation would be based on digital advertising revenue rather than a company's entire Australian revenue. This means the potential financial burden is narrower than some earlier proposals suggested.
The government has presented the measure as a way to protect the future of public interest journalism. Supporters argue that a strong news industry is important not only for media companies but also for democracy because journalists provide information that allows Australians to understand government decisions, investigate wrongdoing and follow developments in their communities.
However, the legislation is not without criticism. Some media organisations have argued that the changes may not generate enough money to prevent further pressure on newsrooms and journalism jobs. Technology companies have also objected to being required to financially support news organisations through government policy.
The impact of the law will become clearer as companies begin negotiating with publishers. If major platforms sign agreements with a broad range of Australian news organisations, the new system could provide an important new source of income for journalism. Smaller publishers could benefit particularly from the stronger incentives attached to their agreements.
Australia's decision could also attract attention internationally. Governments in several countries are struggling with the same problem of how to support professional journalism as advertising and audiences move online. Australia's approach is significant because it uses the possibility of a financial levy to push technology companies towards private agreements with publishers.
The government does not necessarily want to collect the levy. Its preferred outcome is for technology companies to reach commercial agreements and provide direct financial support to news organisations.
The success of the new law will therefore depend on what happens after Parliament's decision. The central question will be whether the legislation produces meaningful and long term funding for Australian journalism while allowing people to continue accessing news through the digital platforms they use every day.
For Australia, the new law represents another major step in its effort to rebalance the relationship between traditional journalism and global technology companies. The coming months will show whether the pressure created by the levy leads to stronger partnerships or another major confrontation between Canberra and the world's biggest digital platforms.