Two immediate issues at stake are the Australian law passed late in 2024 to restrict social media access for children under 16 years – a world-first legislative step – and the Albanese government support for a news bargaining incentive law to drive Big Tech digital platforms into paying publishers for the use of their news content.
The Trump administration has put foreign governments and Australia on notice. Signifying an alliance of unprecedented mutual self-interest between Trump and Big Tech, the Trump presidential memorandum of February 21 to senior cabinet figures seeks by “imposing tariffs and taking such other responsive actions” to retaliate against a foreign government that “through its tax or regulatory structure” imposes “a fine, penalty, tax or other burden” that harms American companies.
Both the abovementioned Australian policies fall easily into these categories. And the idea that Trump or Elon Musk will give Australia an exemption can be dismissed. This is a sweeping protectionist dictum from Trump to quarantine from accountability the richest companies on earth by preventing foreign governments from upholding their sovereign rights.
Australia is mentioned in the February 21 memo. It becomes a target because of what it does and what it believes.
Have no doubt, when the Trump-Big Tech coalition threatens Australia, this will transcend a policy dispute; it will penetrate to principles that define our social and democratic values.
The ban on young people having access to social media was passed on a bipartisan basis. The idea, first proposed by Peter Dutton, was embraced by the Albanese government with Anthony Albanese saying: “Social media is doing harm to our kids. I’m calling time on it.”
The legislation was contentious, opposed by crossbenchers, attacked for its alleged unworkability, but it is widely popular with parents.
It was influenced by American social psychologist, Jonathan Haidt, whose recent book The Anxious Generation argued there had been “a rewiring of childhood” by social media companies that had transformed our society and that allowing open access was “the biggest blunder we have ever made” in raising children.
The law comes into force only 12 months after its passage with social media companies liable for fines up to $50m for failing to take reasonable steps to keep children under 16 off their platforms.
Musk attacked Australia’s initiative last November saying: “Seems like a backdoor way to control access to the internet by all Australians.”
Musk has Australia in his sights. With several countries assessing similar laws, Big Tech companies have a vested interest in neutralising Australia’s actions.
Labor’s news bargaining incentive is the follow-up to former treasurer Josh Frydenberg’s news media bargaining code, implemented with Labor support, to ensure Big Tech paid media companies (such as News Corp, publisher of The Australian) for use of their news content.
During that showdown, Facebook, now rebranded as Meta, at one point blocked all news and government public service information from its platform seeking to break Australia’s and the government’s will. It failed. Since then Meta said it would not renew the existing 2021 deal with publishers, prompting former Australian Competition & Consumer Commission chairman Rod Sims, to say this was “as arrogant as it is damaging to Australia”.
Labor has produced a variation on the earlier code in the form of a de facto levy on digital platforms; those that renew deals with publishers won’t have to pay but those that refuse will face the levy. Communications Minister Michelle Rowland has announced Labor’s decision and says it will consult with stakeholders on the final design. Both the Coalition and Greens have criticised Labor for its delay – and Meta has signalled its campaign of resistance against Australia.
The foundation for Big Tech’s policy alliance with Trump was foreshadowed earlier this year by Meta boss Mark Zuckerberg when, calling on Trump to intervene against EU moves to impose accountability on Big Tech, he said the EU moves were “almost like a tariff”.
This was a brilliant branding. It signals one of the potentially greatest bids for protection in commercial history. Given that Trump loves tariffs, the tactic is to extend the concept of protecting American industrial production to protecting the Big Tech companies, their profits and their “masters of the universe” titans, the world’s richest men, with Musk conveniently located at Trump’s right hand.
Never in US history has there been a union this deep between the most powerful companies on earth and the most powerful political leader on earth. Of course, if you are fool enough you might still hope or even believe that Trump’s presidency is about the ordinary American!
This follows an epic strategic rethink by the Big Tech titans. They decided that only the US President was able to protect them against the laws being proposed by other nations, notably the EU, in their sovereign interests. Hence much of Silicon Valley ditched its left-wing, progressive faiths and crossed the Rubicon in the 2024 election to link with Trump. The goal was to obtain an insurance policy to guarantee and expand their techno-command. So the 2024 election was a combined victory for Trump, JD Vance and Musk, with Musk reportedly donating more than $US200m to the campaign.
Musk’s quest is to rewrite capitalism along with the media. After the election, Musk told his followers on X: “You are the media now.” Musk is under assault from foreign governments on multiple fronts; his tactic is to bond with Trump, offer him invaluable domestic support and recruit the power of the US government to hold the EU and other governments – think Australia – at bay.
Zuckerberg and Jeff Bezos have come aboard. The fuse is now lit with Trump’s February 21 instruction to agency heads that tariffs and other actions be taken in retaliation against “regulations imposed on United States companies by foreign governments that could inhibit the growth or intended operation of United States companies”.
The scope is virtually unlimited in terms of the justification for retaliatory action. Brookings Institution visiting fellow and former chairman of the US Federal Communications Commission Tom Wheeler said the groundwork was laid by Zuckerberg’s interview with podcaster Joe Rogan, saying “the US government should be defending its companies”.
Think about that. Anyone who hopes Australia can avoid a showdown should read the February 21 memorandum. It says: “American businesses will no longer prop up failed foreign companies through extortive fines and taxes.” In short, by branding an array of foreign government regulations as equivalent to tariffs, Trump offers a justification for his use of tariffs in retaliation.
Wheeler says while the usual aim of tariffs is to protect domestic production, Trump has a different aim – to target foreign regulatory action precisely because this increases costs for Big Tech, thereby “cutting into their profit margins”.
Here’s the story – the tech titans as victims. Only in Trump’s America.
In his memo Trump said the value of the US-digital economy was bigger than the “entire economy of Australia, Canada or most members of the EU”, but instead of empowering their own workers foreign governments were “appropriating revenues that should contribute to our Nation’s wellbeing, not theirs”.
Australia’s proposals aren’t significant in terms of the money involved but they are vital in terms of the principles enunciated. The action will come after the May federal election when the implementation phase begins.
Will Australia lose its nerve? Albanese and Dutton are aligned together on both issues. Yet the social media ban and news incentive policy are both novel – and have their critics.
Can Trump and Big Tech intimidate Australia, break its will and foment a local backlash?
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