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

The Australian government passed legislation on Thursday that imposes levies on tech giants like Meta, Alphabet's Google, TikTok, and Microsoft's LinkedIn for not paying local media outlets for news displayed on their platforms. The News Bargaining Incentive tax requires these companies to pay 2.5% of their advertising revenues unless they negotiate commercial agreements with local publishers.

The funds generated from this scheme will be allocated to Australian news outlets, which play a crucial role in boosting user engagement and advertising revenue for the tech companies.

The levy applies to platforms with significant social media or search services in Australia and annual advertising revenue exceeding A$250 million ($178 million). Platforms can avoid the levy by reaching agreements with at least eight different publishers by the end of their reporting period. The value of these deals will be deducted from their levy liability.

Deals must involve the production of news content or its online availability through the platform. Spending with large publishers receives a 150% offset, while spending with smaller and medium-sized outlets gets a 200% offset. Each individual deal cannot exceed 25% of a platform's levy liability.

The legislation emphasizes the importance of platforms concluding commercial deals before the end of their financial reporting period to offset their liability for that period. This new law marks a significant step for Australian news businesses and journalism, coming just one day after parliament passed laws restricting gambling advertisements.