Australia's New Levy Targets Tech Giants Over News Deals

Australia has enacted legislation that imposes a financial levy on major digital platforms if they do not enter into commercial agreements with local news publishers. The News Bargaining Incentive, passed on Thursday, applies a charge of 2.5% on the advertising revenue of qualifying tech companies.

The levy targets platforms with a significant social media or search presence in Australia and local advertising earnings exceeding A$250 million (about $178 million). This includes companies such as Meta, Google, TikTok, and Microsoft's LinkedIn.

Platforms can avoid the charge by finalising content agreements with at least eight different publishers before the end of their reporting period. The value of these deals can be offset against the levy. Spending with large publishers earns a 150% offset, while agreements with smaller outlets receive a 200% offset. However, no single deal can account for more than 25% of a platform's total liability.

The government stated that the legislation sends a clear message to platforms to pursue commercial deals, which must be completed within the relevant financial reporting period to count. Proceeds from the levy are intended to support Australian news businesses, whose content contributes to user engagement and advertising revenue on these platforms.

The passage of this measure follows a separate parliamentary decision to restrict gambling advertisements.