Australia passed a law on Thursday that will force major technology companies to pay millions of dollars in fees if they fail to reach commercial agreements with local news outlets for displaying news content on their platforms.
The News Bargaining Incentive taxes companies 2.5% of their advertising revenue unless they secure such deals with news publishers.
Who the law targets
The levy applies to Meta, Google, which is controlled by Alphabet, TikTok and LinkedIn, which is owned by Microsoft. It covers companies that operate a "significant" search or social media service in Australia and generate local advertising revenue of more than 250 million Australian dollars, or about 178 million US dollars.
Money raised through the program will go to Australian local news outlets, whose content helps drive user engagement and advertising revenue on the tech platforms.
How platforms can avoid the levy
Platforms can avoid the charge by reaching agreements with at least eight different publishers before the end of their assessment period. The value of those agreements would be deducted from their tax liability.
Under the legislation, the agreements must support the production of journalistic content or relate to news content produced by publishers and made available online through the platform.
Spending with large outlets generates a 150% deduction, while investment in small and medium-sized outlets earns a 200% deduction. Any individual agreement is capped at 25% of a platform's tax liability.
Government response
The government said in a statement that the legislation was already in effect and that the message for platforms to pursue commercial agreements was clear. It said agreements would need to be finalized before the end of a digital platform's financial assessment period in order to count toward reducing its obligation for that period.
The government called it an important day for news companies and for Australian journalism.
What else was passed
The approval of the measure came a day after Australia's parliament passed laws restricting gambling advertisements.
