Labor sends tech giants back to news negotiating table

Big tech companies will potentially face fines of hundreds of millions of dollars if they refuse to strike commercial agreements with Australian news businesses for the use of their content.

TikTok Ceo Shou Zi Chew and Meta CEO Mark Zuckerberg before a US Senate Judiciary Committee hearing into big tech.

Big tech companies will potentially face fines of hundreds of millions of dollars if they refuse to strike commercial agreements with Australian news businesses for the use of their content.

The federal government announced on Thursday the establishment of the News Bargaining Incentive – a policy proposal that aims to compel digital giants including Alphabet (parent company of Google), Meta (owner of Facebook, Instagram and Whats­App) and ByteDance (TikTok) to enter into deals with Australian news publishers, big and small.

In February this year, Meta announced it wouldn’t be renewing its commercial deals with Australian news publishers, which were worth an estimated $70m a year to the industry.

Labor’s proposal, which the Albanese government intends to enshrine in law in early 2025, is essentially a fresh incarnation of the Morrison government’s news bargaining code that became law in 2021.

In announcing the policy, Assistant Treasurer Stephen Jones said while the 2021 media bargaining code sought to address the imbalance of bargaining power between digital platforms and news media publishers, it had limitations – namely, it allowed platforms to avoid their financial obligations to media outlets by simply removing news.

“The government wants Australians to continue to have access to quality news content on digital platforms,” he said. “Digital platforms receive huge financial benefits from Australia, and they have a social and economic responsibility to contribute to Australians’ access to quality journalism.

“This approach strengthens the existing code by addressing loopholes that could see platforms circumvent their responsibility to pay.”

Under Labor’s proposal, tech companies with Australian revenue of at least $250m will be required to negotiate commercial deals with news media outlets whose content they use on their digital platforms. If they refuse to negotiate, they will face fines that far outweigh the likely cost of any commercial deals they might strike with news companies.

The bargaining incentive includes a charge and an offset mechanism. Platforms that choose not to enter or renew commercial agreements with news publishers will pay the charge, while those that sign deals will be able to offset their liability.

Mr Jones said the policy was not a “revenue-raiser” for the commonwealth; it was designed to “incentivise” fair commercial agreements between the platforms and news media businesses.

The Assistant Treasurer said it wouldn’t be an “economically ­rational decision” if tech companies opted against entering into commercial deals with Australian news publishers in favour of paying fines. Should the fines be imposed, though, the federal government would divide and distribute the moneys.

News Corp Australasia executive chairman Michael Miller welcomed Labor’s proposal, pledging to restart the company’s commercial relationship with Meta.

“This will provide a foundation for rebuilding the media industry after the loss of an estimated 1000 jobs this year, and ensuring Australian news media businesses will continue to deliver inquiring and professional journalism, which has never been more important to cohesive, democratic societies,” he said.

“Following today’s announcement, I will be contacting Meta immediately to seek to restart the commercial relationship with News Corp Australia that it walked away from earlier this year.

“I will also be making contact with TikTok with the intention of reaching a commercial agreement with them as well.

“The package of recent Australian initiatives aimed at social media which now include restricting under 16s from accessing social media, moves to take on online scams and a new ex-ante competition framework, shows the government is prepared to be a leader in setting the rules and expectations for how big tech should operate in our society.”

In response to Labor’s announcement, a Meta spokesperson said: “The proposal fails to account for the realities of how our platforms work, specifically that most people don’t come to our platforms for news content and that news publishers voluntarily choose to post content on our platforms because they receive value from doing so.”

The News Bargaining Incentive will come into effect from January 1.