Australia’s ‘discriminatory’ tax: Meta slams News Bargaining Incentive

Newly proposed legislation focused on sustaining a shrinking sector is generating heat from one of the globe’s largest companies.

Further to recent coverage of the proposed News Bargaining Incentive and its numerous critics, conglomerate and owner of multiple social media platforms, Meta, has directly responded to the introduced legislation through a blistering critique earlier this month.

In a statement issued on 4 June by its ANZ wing, Meta called the News Bargaining Incentive “a discriminatory tax applied only to a handful of foreign companies” that is “broader than digital services taxes, as it is only applied on the widest possible revenue base and with no credible connection to news”.

The statement said: “Our position is clear: this law is poorly designed, grossly unfair, and will fail to deliver a diverse and sustainable news sector.”

The latest form of the drafted legislation, replacing the earlier News Media Bargaining Code, is intended to uplift and support journalism and the larger media news sector by requiring large and profitable digital platforms, such as Meta, Google, and TikTok, to either pay a 2.25 per cent charge on Australian revenue, or wipe out the tax liability by entering commercial deals with news publishers.

Australian Minister for Communication Anika Wells said: “We believe it’s only fair that large digital platforms contribute to the hard work of journalism that enriches their feeds and that drives their revenue.”

Similarly, Prime Minister Anthony Albanese said news and media coverage “needs to have a monetary value attached to it. It shouldn’t just be able to be taken by a large multinational corporation and used to generate profits for that organisation with no compensation appropriate for the people who reproduce that creative content.”

In the same statement, Albanese noted that Meta, along with Google and TikTok, has been consulted in the process of establishing the draft legislation – yet in light of Meta’s recent statement, it seems as unlikely as ever that they will be in support.

However, this more closely aligns with former sentiment and behaviour. In 2021, Facebook temporarily blocked all news links for Australians in response to the News Media Bargaining Code, and three years later, Meta announced it would not renew any private deals with media companies, shutting the Facebook News tab in Australia to challenge the existing rules.

In this vein, the latest statement is not completely unexpected.

The 4 June submission to the draft legislation argued that news organisations claim to not get a fair return on the value they provide to digital platforms, but in fact, often “derive real commercial benefits: referral traffic, audience growth, and subsequent advertising revenue they retain in full”.

It continued: “A sustainable news ecosystem requires publishers to innovate and adapt to changing consumer behaviour. 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.”

“Not only does this revenue base lack direct connection to news publishing, [but] it also captures innovations that Meta is bringing to the Australian market; products that have no relation whatsoever to news content.”

Where the incentive goes, and Meta’s response, is likely to be determined in the next few months, with the Australian federal government planning to introduce the finalised package of bills to Parliament within its winter sittings; if passed, it could apply retrospectively from 1 January 2025.

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