Social media levy on the cards in escalation of news dispute

Tech behemoths could be slapped with big new taxes after publishers warned the federal government against pushing Facebook owner Meta into abandoning news content altogether, creating a news desert on local social media.

Smaller online news outlets have urged Labor not to enforce a Morrison government-era code that would start a long arbitration process in the hope of reaching new deals for tech giants to pay Australian media firms for their content.

Assistant Treasurer Stephen Jones and Communications Minister Michelle Rowland are leading the government’s attempts to rein in big tech.Credit: Ben Symons

Those outlets, including The Daily Aus and Broadsheet, worry Meta will follow through on a threat, first reported by this masthead, to block all news content from Facebook and Instagram, crippling platforms reliant on social media for clicks.

The fear of news-free social media feeds has opened up the possibility that Assistant Treasurer Stephen Jones, who is leading Labor’s negotiations with Meta, will opt against “designating” Meta under the news media bargaining code to avoid the company ditching news in Australia. Under legislation brought in by the Coalition in 2021, the minister can “designate” a digital platform to negotiate with news media companies if it refuses to do so of its own accord.

A proposed levy paid by Meta and other tech giants to fund local journalism has been discussed in meetings between Jones and bosses from News Corp, Nine and other companies, according to high-level sources who asked for anonymity to divulge the private talks. Nine owns this masthead.

A levy would represent a big step-up in the Albanese government’s widening actions against big tech, involving clampdowns on misinformation, scams, child abuse material, addictive algorithms and copyright.

Hinting at policies that would go above and beyond the Coalition’s world-leading code, Jones said on Wednesday: “The [code] was a perfectly sensible and effective tool back in 2021 to deal with the circumstances in 2021. Those circumstances have changed significantly.”

The government has not discussed any new revenue measures in public as it has faced pressure from the Coalition to designate Meta.

In 2022, Facebook’s tax bill in Australia was $24 million, but the company funnelled nearly $1 billion in local ad revenue to its parent company overseas.

Under fear of being forced to the table under the legislated arbitration process, Meta owner Mark Zuckerberg in 2021 agreed to voluntarily pay about $70 million a year to publishers after a series of conversations with then-treasurer Josh Frydenberg. News Corp and other major firms may be frustrated if Labor declines to designate Meta this time around.

Those deals expired this year and Meta has refused to sign new ones, claiming it is the news publishers that benefit from sharing links on social media, not the other way around. Meta told Jones earlier this year that it was prepared to block news content if Labor enforced the code, as the company did in Canada last year in similar circumstances. Google, which relies more heavily on news content, is continuing to pay Australian firms.

Meta’s decision to stop paying for local journalism – a move Labor, the Coalition and Greens claim will weaken public interest journalism at a time when misinformation swirls on social media – has been cited by News Corp, Nine and Seven West Media in recent rounds of job cuts that have roiled the industry.

Amid a groundswell of political pressure on tech giants to clean up their platforms, News Corp Australia executive chairman Michael Miller has proposed that tech platforms “pay” for a social licence to operate in Australia.

Miller argued in a National Press Club speech in June that new laws should compel tech firms to pay for mental health programs, force complaint call centres to be established in Australia, impose penalties on misbehaving executives, and enact powers to block access to social media sites if they broke the rules.

“This idea of a social licence is neither overreach nor pie in the sky,” he said.

“In my view, the tech monopolies are also mining companies. They don’t mine our minerals, they mine our lives. Those lives are Australia’s greatest resource, and we have a responsibility to protect ourselves and the way we want to live.”

The Digital Publishers Alliance, made up of online-only outlets such as Mamamia, has been the main group against forcing Meta into arbitration. Some members would face collapse if news were blocked on Meta platforms.

One industry source said if Labor were to shun designation, the government would have given too much weight to the views of smaller publishers that do not produce as much original reporting as larger players.

The head of the Public Interest Journalism Initiative – a group chaired by former competition tsar Allan Fels – said a levy on digital giants would deliver millions to the media industry.

“A digital levy has the potential to deliver millions of dollars to the sector while allowing the platforms to reliably predict their financial liability, alleviating the uncertainty of bargaining activity with operators,” Anna Draffin said.

Jones’ decision on designation is expected in the coming months as he receives key advice from the Australian Competition and Consumer Commission and Treasury.

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