Meta challenges Australia plan for news payments

Summary

Meta said Australia’s proposed levy on digital platforms to fund news outlets was unfair and may breach a U.S. trade agreement.

Why this matters

The proposal could reshape how large tech platforms pay for news in Australia and affect the finances of local media outlets. It also raises questions about trade obligations and how governments support journalism as advertising revenue declines.

Meta said Thursday that Australia’s proposed News Bargaining Incentive, which would require major digital platforms to support media outlets financially, was “poorly designed” and “grossly unfair.”

In a submission to the government, the Facebook, Instagram, and WhatsApp parent company said the plan would shield publishers from the pressure to adapt to a changing media market.

“The NBI does the opposite: it insulates publishers from the competitive pressure to evolve by guaranteeing revenue regardless of whether they build sustainable business models,” Meta said. “This entrenches dependency at the very moment when adaptation matters most.”

Meta also said the “economically incoherent” proposal would not create a sustainable news sector and “plainly” violated Australia’s commitments under its free trade agreement with the United States.

“A strong, independent media cannot be built on punitive taxes, levied on foreign companies, with no connection to the value exchanged,” the company said.

Under the center-left Labor government’s proposal, social media and search platforms would face a 2.25% levy on Australian revenue if they do not reach deals to pay Australian outlets for news content. Platforms that meet a minimum number of commercial agreements could lower the effective rate to 1.5%.

Revenue from the levy would be distributed to media outlets based on the number of journalists they employ.

The proposal targets Meta, Google, and TikTok owner ByteDance, but would not apply to artificial intelligence developers that also affect search traffic, such as OpenAI, the maker of ChatGPT.

The government said the measure, which must be approved by Parliament, would raise 200 million to 250 million Australian dollars, or about $143 million to $178 million, for local media outlets.

The proposal would replace the previous government’s News Bargaining Code, which Meta and other tech companies avoided by removing news content from their platforms.

Australia’s media sector has been hit by falling advertising revenue. The Media, Entertainment and Arts Alliance, the country’s main media union, said more than 19,500 journalism jobs have been lost since 2008.

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