Australia passes law to levy tech giants that fail to pay for local news

Australia passes law to levy tech giants that fail to pay for local news The ⁠levy applies to Meta, Alphabet's Google, TikTok ⁠and Microsoft's LinkedIn, covering firms with a "significant" social media or search service in Australia, and local advertising revenue exceeding A$250 million ($178 million).

Key points

• While spending with small and medium-sized outlets carries a 200% offset Photo Credit: REUTERS, spending with sizeable publishers ‌carries a 150% offset.
• The News ⁠Bargaining Incentive taxes the firms 2.5% on their advertising revenues unless they strike agreements.
• The passage ‌of the News Bargaining Incentive comes one day after parliament passed laws restricting gambling.
• Platforms can avoid ‌the charge by reaching agreements with at least eight different publishers by the end of their reporting period.
• Any single accord is additionally capped at 25% of a platform's levy liability.

Australia passed legislation on Thursday that will force tech giants to pay millions of dollars in levies if they fail to ‌strike commercial deals with local media outlets for news on their platforms.

Notably, the News ⁠Bargaining Incentive taxes the firms 2.5% on their advertising revenues unless they strike agreements. Proceeds from the scheme ‌would be directed to local Australian news outlets, whose content helps drive user engagement ‌and advertising revenue on the tech firms' ‌platforms.

Meanwhile, the ⁠levy applies to Meta, Alphabet's Google, TikTok ⁠and Microsoft's LinkedIn, covering firms with a "significant" social media or search service in Australia, and local advertising revenue exceeding A$250 million ($178 million). Platforms can avoid ‌the charge by reaching agreements with at least eight different publishers by the end of their reporting period. The value of those deals would ‌be offset against their levy liability.

Meanwhile, the deals must backing the production of news content or relate to news content produced by ⁠the publishers being produced available online by the platform, the legislation noted.

"The legislation is here, and the message to platforms to pursue commercial deals is ‌clear. Deals will need to be finalised before the end of a digital platform's financial reporting period to be applied to offset their ⁠liability in that period, " office-holders noted in a ⁠statement.

"This is an important day for Australian news businesses and Australian journalism."

For context, the passage ‌of the News Bargaining Incentive comes one day after parliament passed laws restricting gambling.

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Taken together, the developments around australia passes law to levy tech giants that fail to pay for point to a situation that is still moving, and the coming days should bring more clarity.