News media bargaining code: Tech giants including Facebook, Tiktok told to strike news deals or face new taxes

The parent companies of Facebook, Google and Tiktok face paying hundreds of millions of dollars to the Government unless they strike fresh deals with media companies to pay for news content under a bid to maintain the viability of public interest journalism. Media bosses will seek to get the tech giants back to the table as soon as possible after the Government announced a news bargaining incentive will start from January 1. It uses the tax system to make it cheaper for large tech companies running social media and search engines in Australia to strike deals with news organisations than to walk away, strengthening the existing news media bargaining code struck in 2021. Companies that don’t reach agreements or strike low-ball deals will have to pay a charge – potentially tens of millions of dollars a year – which the Government will distribute to media organisations. The new charge would be on top of regular tax liabilities. Assistant Treasurer Stephen Jones and Communications Minister Michelle Rowland said the new arrangements closed loopholes while ensuring Australians could continue to access quality news content on digital platforms. “Digital platforms receive huge financial benefits from Australia, and they have a social and economic responsibility to contribute to Australians’ access to quality journalism,” Mr Jones said. Google and Meta struck deals with media companies including Seven West Media – owner of West Australian Newspapers, which publishes The West Australian – Nine, News Corp and the ABC worth about $200 million a year after the Morrison government brought in the bargaining code. But while Google has been renewing those deals, earlier this year Meta walked away and limited news content on its platforms. In Canada, which followed Australia’s lead, Meta has blocked news media content entirely from Facebook and Instagram rather than pay publishers. “Let’s see this as an opportunity for us to start afresh with some of those companies that have withdrawn from the field and some other companies that haven’t been involved in the past,” Mr Jones said. Seven West chief executive Jeff Howard said the arrangements were clearly designed to motivate tech platforms to strike commercial deals. “We welcome a strengthening of the news media bargaining code and the Government’s commitment to ensuring Australian media businesses are fairly remunerated for the news we produce, so that Australians continue to receive reliable and trusted Australian news,” he said. “An enhanced news bargaining incentive means trusted and reliable news will continue to appear on these platforms, combatting the growing problem of misinformation and disinformation.” News Corp Australia executive chairman Michale Miller said he would be contacting Meta immediately seeking to resume talks for a new deal,and reaching out to TikTok. Nine’s acting chief executive Matt Stanton indicated he would also seek to resume talks. But Meta and digital industry peak body DIGI, which includes Google and Tiktok in its membership, said there were many unanswered questions and more work needed. “This proposal sees a small subset of one sector being forced to commercially subsidise another, and we don’t believe such a tax exists in any other area of the economy,” a DIGI spokesman said. Meta’s spokesperson raised similar concerns. “We agree with the government that the current law is flawed and continue to have concerns about charging one industry to subsidise another,” they said. A Google spokesman said the introduction of a “targeted tax” risked the viability of deals it had already renewed with media companies. “As many have noted, Australians are increasingly turning to a range of platforms, such as Microsoft, Snapchat and Apple, for news content and this shift in consumption should be reflected in any proposed measure,” he said. The new charges will apply to all social media and search companies that have annual Australian revenue above $250 million, whether they carry news content or not. It’s expected to capture Meta, Alphabet and Bytedance, and the ministers indicated it may also include Apple and Microsoft. Any money the Government collects under the new arrangement would be distributed to media companies, not boost its budget bottom line. There will be protections to stop tech companies only striking one large deal with a single media company. Details of the charges, offsets and criteria for distributing money to media companies are yet to be finalised.