Meta, Microsoft respond to government’s rebooted news tax

Tech giants Meta and Microsoft have responded to Labor’s rebooted plans to make tech giants pay for Australian journalism, which would force the companies to hand over millions of dollars from their domestic revenue to local media companies, or pay a higher amount in financial penalties.

As reported by this masthead, a Treasury discussion paper has revealed the government wants to introduce new charges for social media giants and big search engines, which it is calling “incentives”, that will be calculated based on a share of the tech company’s total income in Australia.

Mark Zuckerberg’s Meta earned an estimated $5 billion in Australian revenue in 2022. Under the new plan it could pay $75 million to publishers and avoid the charge entirely, or face a $112.5 million bill from the Australian Taxation Office.Credit: Bloomberg

The tech companies can avoid paying that fee by striking deals with Australian news companies, where every dollar they invest in media partnerships reduces the penalty amount by $1.50, until it reaches zero. This is designed to make paying for news content the most financially attractive option.

For Meta, for example, which earned an estimated $5 billion in Australian revenue in 2022, it could pay $75 million to publishers and avoid the charge entirely, or face a $112.5 million bill from the Australian Taxation Office.

The policy marks a significant escalation in Australia’s battle with big tech over journalism funding. Meta shocked publishers in early 2024 when it announced it wouldn’t renew commercial deals worth about $70 million struck under Scott Morrison’s 2021 News Media Bargaining Code.

The policy could prove a lifeline for struggling Australian media companies, including those that have been battered by declining advertising revenue, but may once again invite backlash from the big tech companies like Meta that are already unsettled by the government’s social media ban.

Microsoft said the company has a long-term commitment to Australia’s economic success and national security.Credit: Bloomberg

Questions remain about how payments will be distributed between large and small publishers, with Treasury proposing proportional caps or greater relief for smaller media companies.

Public consultation closes December 19, with the government indicating it wants to backdate the scheme to January 1, 2025.

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“We’re reviewing details of the government’s new policy and will continue to engage constructively on the important issue of addressing the bargaining power imbalance between large digital platforms and Australian news businesses,” a Microsoft spokesman told this masthead.

“Microsoft has a long-term commitment to Australia’s economic success and national security. We will always ensure our operations align with national laws and policies.”

A Meta spokeswoman said: “We will review the proposal, and look forward to participating in the government’s consultation process,” while a Google spokesman declined to comment.

Apple and TikTok were also contacted for comment.

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