On Thursday, the Albanese government announced a new plan — the news bargaining incentive (NBI) — to ensure tech giants keep paying for Australian journalism. The plan entails imposing an unavoidable levy on large digital platforms if they refuse to enter commercial deals with media outlets.
The levy will apply to all social and search platforms with Australian revenue of more than $250 million. Alphabet (which owns Google), Meta (which owns Facebook, Instagram and Threads) and ByteDance (which owns TikTok) would likely be hit, while Microsoft (which owns LinkedIn) may also be hit, depending on the legislation. There are still details to be worked through in the new year — including, importantly, the size of the levy.
The NBI builds on the Morrison government’s news media bargaining code (NMBC), which compelled tech giants to negotiate deals with media outlets to pay for news content on their platforms. But as the responsible ministers Michelle Rowland and Stephen Jones highlighted last week, the NMBC is full of holes and workarounds, which the NBI is intended to plug.
Labor’s plan indeed improves upon Morrison’s policy, which was withering on the vine. But potential issues remain, presumably due to a fear of provoking News Corp and other commercial media behemoths with a regime less friendly to their interests.
The pros
First up, the good news. The big improvement is that tech companies won’t be able to wriggle out of paying news companies by simply banning news from their platforms, as they have in Canada.
The NMBC left this possibility open, thanks to convenient framing by the Coalition and large media companies. They sold the legislation as just compensation for media companies, since tech giants supposedly profited unfairly from news content. Some even called it “stealing”. Accordingly, social media platforms were made to negotiate with media outlets to compensate them.
Meta, however, threatened to simply ban news content on its platforms. It was more than happy for users’ feeds to be populated by cat videos and your cousin’s wedding photos, and didn’t fear a loss of eyeballs from ditching news. The supposed profits the tech giants were reaping from news clearly weren’t as great as the media executives made out.
Labor’s NBI will patch up this loophole by making the tech giants pay, regardless of whether they host news or not. Tech giants will be able to deduct the cost of any commercial deals with media outlets from their levy liability. Thus, they can choose who to pay: the media outlets or the government (which in turn will purportedly divvy up payments to publishers through an undecided mechanism). “Neither” is no longer an option.
So, one nightmare scenario has been averted — no payments to publishers and a prolonged news blackout on social media, where 20% of Australians get most of their news. But two other bleak scenarios remain possible.
The cons
First, Meta could still switch off news out of spite. Meta founder Mark Zuckerberg may seek to punish the Australian media industry to set an example to other companies abroad — if you convince governments to tax us, don’t expect us to send any traffic your way. Social media platforms, particularly Facebook and X, are already deprioritising news content in users’ feeds.
The recent Labor-led parliamentary committee on social media recommended exploring a novel solution: “must carry” requirements. This could be legally contentious, as the committee acknowledged, but the logic is sound. Tech platforms would be legally required to carry journalism, for the same reason that radio and TV channels are: for the public good. These are oligopolistic platforms with large user bases, and the risk of them purely harvesting misinformation and nonsense is too great to be left to the whims of a few billionaires. They should have a positive obligation to inform the public.
Labor’s frontbench is yet to comment on this recommendation. But if Zuckerberg or other tech titans start mulling a retaliatory retreat from news, watch this space.
But let’s say Meta reneges on its refusal to negotiate commercial deals, preferring to dole out its own grants, lest the taxman does it for it. This still gives Meta a privileged role in determining which media outlets get additional funding and which do not. And we already know that it cut multiple worthy recipients out of its previous grant round, including the SBS and The Conversation.
As the ABC’s Tom Crowley reports, “the design of this tax would not stipulate which media outlets the platforms should pay … this raises the possibility that platforms could choose to sign exclusive deals with one or some outlets”.
If they were being selective, Silicon Valley executives would likely seek to curry favour with the largest Australian media companies (News Corp, Seven, Nine) which have the best connections in Canberra, and which might whisper in ministers’ ears to reduce the levy’s as-yet-undecided size to a mutually agreeable number.
This could easily leave smaller, independent outlets out in the cold. And though the government has announced $180 million to boost “vital” local news organisations and community broadcasting, there are plenty of worthy non-regional outlets that could fall through the cracks.
A much better model would’ve been dumping the NMBC entirely and having the government distribute the funds from its tech tax to news outlets via an independent grant body, like the Australia Council does for arts funding. An independent panel of experts could apportion funding based on its journalistic merits and ensure a diverse and equitable distribution.
Labor reportedly mulled similar options but baulked, according to The Sydney Morning Herald, for fear of Trump (and his new adviser Elon Musk) being angered by taxes on American companies and retaliating with tariffs.
This is frankly ludicrous reasoning, if anyone truly believes it. Musk is not at risk of paying the tax, for his company’s Australian turnover almost certainly isn’t high enough. Zuckerberg is trying to make nice with the president-elect, but getting Trump to do his bidding on a relatively minor policy dispute in a foreign jurisdiction seems a bridge too far.
The more likely motivation for allowing deductible commercial deals is they favour the largest media companies, particularly News Corp, Seven and Nine, which will continue to reap the most revenue from the arrangement. With an election approaching next year, one suspects Anthony Albanese was loath to pick a fight with them.
Once again, Australian media policy seems to have conformed to the golden rule: “what News Corp wants, News Corp gets”. Some things change, others stay the same.
Have something to say about this article? Write to us at letters@crikey.com.au. Please include your full name to be considered for publication in Crikey’s Your Say. We reserve the right to edit for length and clarity.
