Social media giants must pay for Australian news or be hit with hefty levy

Social media giants who refuse to pay for Australian news on their platforms will face huge financial penalties under Labor’s plan to incentivise big tech to fairly compensate local journalism.

Social media giants who refuse to pay for Australian news on their platforms will face huge financial penalties under Labor’s plan to incentivise big tech to fairly compensate local journalism.

The Albanese Government is expected to release its proposal to keep tech companies at the negotiating table on Thursday as agreements inked with Australia’s news publishers three years ago have begun to expire.

Under Labor’s plan, if tech giants like Facebook or Google will not renew their commercial deals with Australian publishers, they will be hit with a levy imposed through the tax system.

It is understood this financial punishment would be greater than the cost of big tech instead paying for the news content they profit from.

Tech giants like Facebook or Google must renew their commercial deals with Australian publishers or be hit with a levy imposed through the tax system. Picture: Denis Charlet/AFP

The value of the original deals struck under the news media bargaining code are expected to be used as a benchmark for any new agreements.

Labor is also understood to have developed a separate solution to help fund smaller publishing groups.

In 2021 the Morrison Government passed historic laws that lead to most major tech companies agreeing to compensate Australian media organisations for news content used on their social media platforms and search engines.

But Labor started to work on an alternate plan after Meta – parent company of platforms like Facebook and Instagram – refused to continue its annual agreements with publishers, estimated to be worth about $200 million, when they expired earlier this year.

Meta is the parent company of platforms like Facebook and Instagram. Picture: Robyn Beck/AFP

Under the Coalition-era laws, social media platforms were not required to pay for news if they blocked the content from traditional media companies from their sites, which Meta has already done in Canada.

Google’s initial deals are yet to run out, but the company has also not committed to renewing its agreements at the original levels despite the search engine’s heavy reliance on local news content.

Labor’s new plan would retain the principle that the deals are a commercial arrangement, and not charitable funding of journalism.

The deals between big tech companies and media organisations including News Corp Australia – publisher of this masthead – Nine, the ABC and Guardian Australia are estimated to be worth about $1 billion over four years.

In October a parliamentary committee recommended the federal government consider imposing a permanent “digital platform levy” in the wake of Meta’s decision to abandon its deals with Australian media companies.

But Labor rejected the idea, which was also opposed by the Facebook parent company.

“The committee’s recommendations ignore the realities of how our platforms work, the preferences of the people who use them, and the value we provide news publishers who choose to post their content on our platforms,” a Meta spokeswoman said at the time.

The committee also recommended the creation of a fund to support independent media companies and publishers operating in “under-served communities” as well as regional, rural and remote areas.

Originally published as Social media giants must pay for Australian news or be hit with hefty levy