Canberra wary of content ‘tax’ on tech giants Facebook and Google

Canberra fears forcing tech giants to hand over revenue to media firms could be interpreted as a tax.

Communications Minister Paul Fletcher. Picture: Kym Smith

The Morrison government is concerned about forcing digital giants to pay media companies for using their journalism out of fear they could be interpreted as new taxes, as it moves to respond to the ACCC’s landmark report into digital platforms’ impact on journalism.

Sources close to the government indicate one major concern of Communications Minister Paul Fletcher and Treasurer Josh Frydenberg in responding to the ACCC’s final report is the prospect of forcing digital platforms to pay revenue to media companies or the government — and those measures being interpreted as a new tax.

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As well as a perception of a Liberal government placing new taxes on digital companies, there is also concern that companies such as Facebook and Google could ­relocate their activities offshore, resulting in a loss of local revenues and jobs. The government has a preference for any new revenue sharing to be done at a global level to prevent loss of revenue or jobs locally.

One of the recommendations of the ACCC’s final report into digital platforms was that Google and Facebook enter into a code of conduct with media companies to monitor and regulate the use of their journalism.

According to ACCC boss Rod Sims, this could include a new revenue stream to media companies, with Google and Facebook forced to pay for the use of original journalism.

The Australian reported this week that the government was preparing to delay the response to the digital platforms inquiry that it had previously promised to release by the end of the year.

The Australian understands that although cabinet was slated to review the response this week, it is yet to do so and it may not happen until next week.

The response is being managed by Mr Frydenberg, Mr Fletcher and Attorney-General Christian Porter with the final response document not yet complete. Amid the delay, industry group Digi and Google have engaged in increased lobbying activity to soften the government’s response to the report, with the likes of Newgate, Nick Campbell’s APAC Nexus Group and TG Endeavour lobbying for the digital giant.

TG Endeavour includes Scott Morrison’s former policy director Brendan Tegg and former Labor communications minister Stephen Conroy.

Despite Facebook having a registered lobbyist in Canberra, the company claims it has not employed any lobbyists to influence the government’s outcome on the ACCC report. “We currently have absolutely no lobbyists, we’re not paying anyone for the ACCC matter or any related matters in Australia,” the spokesman said.

Facebook has hit back at claims it is trying to stonewall the ACCC’s digital platforms inquiry, telling The Australian it supports most of the watchdog’s recommendations and has made no attempts to delay their implementation. A Facebook spokeswoman said in a statement that the company supports 15 of the 29 recommendations, and outright opposes only five.

However, in its response to the ACCC’s final report, Facebook ­accused the regulator of “inaccurate” and “speculative analysis” based on “factual errors” and a misunderstanding of how digital platforms operated.

Facebook also objected to any revenue or data-sharing code of conduct with media organisations.

Facebook claimed the code — which media organisations have welcomed — would “unfairly shelter media” companies that didn’t need the protection of a regulator.