Big tech to pay more if no deal reached with Australian media

Australian lawmakers are set to introduce amendments to media bargaining laws, proposing a 2.5% levy on big tech companies' digital advertising revenue if they fail to strike commercial deals with local news organizations. This move aims to create a more sustainable news production ecosystem by ensuring tech giants compensate the creators of the content they utilize.

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Big tech companies should provide compensation to the organisations that provide them content through news.

While the penalty rate is higher than initially proposed, the levy will only apply to digital advertising revenue, a concession secured by the companies. This means the financial impact will be calculated on a smaller portion of their overall revenue. The government has adjusted the incentive structure, requiring companies to reach agreements with at least six local news services to avoid the fee.

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That will mean that we have a news production ecosystem that is more sustainable going forward.

Assistant Treasurer Daniel Mulino emphasized that the scheme targets the part of the business that uses news content. He expressed confidence that major tech companies, including Google and Meta, will not withdraw their services from Australia, a significant and profitable market, despite previous threats to do so.

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This reflects the fact that what we are really trying to target here is the part of the business that uses the news.

The amendments also broaden the definition of journalists to include essential production roles and freelancers. Furthermore, 5% of funds raised through the News Bargaining Incentive will be directed to a grants program supporting small publishers and new media startups, reflecting a commitment to a diverse media landscape.

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Australia is one of the largest economies in the world, it's very profitable for them, and we are hearing no indications that would be their reaction.