The Australian parliament has just passed a law that will force four major tech companies – Meta, Google, Microsoft (LinkedIn), and TikTok – to compensate media outlets for their use of information. The Australian Government’s approach, which has received opposition support, is that the existence of digital platforms has left news companies at a disadvantage when negotiating possible compensation for the use of their information. The new legislation will become a corrective factor for the protection of journalism.
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The Australian law, called the ‘News Bargaining Incentive,’ requires major tech companies to reach at least eight revenue-sharing agreements with media companies or else face a government levy of 2.5% on their advertising profits. Australian Prime Minister Anthony Albanese has stated that “the Government will not make money from this. It is directly about supporting journalists. Every dollar raised will be returned to the sector.”
The new regulation will apply to companies that have a “significant” social media or search service in Australia with local advertising revenue exceeding 250 million Australian dollars (about 150 million euros). The tech companies’ agreements with media outlets will result in a considerable tax deduction.
In a statement, the Australian Government pointed out that “the legislation is already in force, and the message to platforms to seek commercial agreements is clear. Agreements must be formalized before the end of a digital platform’s reporting period so they can be used to offset their obligation in that period.”
“The news bargaining incentive aims to make the system fairer,” says the Deputy Treasurer
The Deputy Treasurer and Minister for Financial Services of Australia, Daniel Mulino, commented in parliament that “the business model underpinning journalism has been disrupted by the major digital platforms, which benefit from news content and the attention it attracts. The news bargaining incentive aims to make the system fairer.” In his opinion, the new law “offers digital platforms a clear incentive to close commercial agreements with Australian news publishers, rather than leaving them to negotiate from a position of weakness.”
The Australian Government estimates that the approval of the new law will provide new revenue to media outlets equivalent to about 300 million euros annually. The executive’s intention is to offer incentives to news companies to allocate that money to journalists, strengthening newsrooms, rather than increasing corporate profits.
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If the major tech companies decide not to reach agreements with news companies, the Australian Government has committed to “transfer all funds raised directly to news organizations through a mechanism included in the journalism payments bill, with amounts based on the number of journalists employed,” Mulino explained.
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