Australia Passes Law Requiring Tech Giants to Pay for Local News

Australia passed legislation on Thursday known as the News Bargaining Incentive. This law forces major technology companies to pay millions of dollars in levies if they fail to reach commercial agreements with local media outlets for the distribution of news on their platforms. The levy is set at 2.5 percent of the advertising revenue of companies that provide a significant search or social media service in Australia and have local advertising revenue exceeding 250 million Australian dollars. Targeted companies include Meta, Alphabet's Google, TikTok, and Microsoft's LinkedIn.

To avoid the charge, platforms must strike deals with at least eight different publishers by the end of their financial reporting period. These agreements must support the production of news content or relate to news produced by publishers and made available online by the platform. The value of these deals will be offset against the company's levy liability. The law provides different incentives based on the size of the media outlet: spending with large publishers carries a 150 percent offset, while spending with small and medium sized outlets carries a 200 percent offset. Additionally, any single deal is capped at 25 percent of the platform's total levy liability.

The Australian government stated that the proceeds will be directed to local news outlets whose content drives user engagement and advertising revenue for the tech firms. The government described the passage of the law as an important day for Australian journalism. This legislation follows the passage of laws restricting gambling advertisements by the Australian Parliament one day prior.