Key facts
- Australia passed legislation to compel tech giants to pay for local news content.
- The News Bargaining Incentive law imposes a 2.5% levy on advertising revenue for non-compliant tech firms.
- Companies like Meta, Google, TikTok, and Microsoft's LinkedIn are subject to the levy.
- Platforms can avoid the levy by striking commercial deals with at least eight local publishers.
- Funds generated will support Australian news businesses and journalism.
Australia has enacted a new law, the News Bargaining Incentive, designed to ensure that major technology companies compensate local news organizations for the use of their content. The legislation mandates that companies like Meta, Alphabet's Google, TikTok, and Microsoft's LinkedIn must either strike commercial deals with Australian publishers or face a levy of 2.5% on their advertising revenues. This move aims to support the sustainability of local journalism, which contributes to user engagement and advertising income on these platforms.
To avoid the levy, tech platforms must finalize agreements with at least eight different publishers before the end of their financial reporting period. The value of these deals can offset the levy liability, with spending on smaller and medium-sized outlets offering a higher offset percentage (200%) compared to larger publishers (150%). However, any single deal's contribution to offsetting the levy is capped at 25% of the total liability. The Australian government emphasized that the message to platforms to pursue commercial deals is clear and that the legislation marks an important day for Australian news businesses.