Social media giants to face levies for not negotiating deals with Australian news publishers

Facebook and other social media companies will have hefty levies imposed on them by the federal government if they refuse to negotiate deals with Australian news companies and pay to use their content online.

Meta chief executive Mark Zuckerberg. Picture: AFP

Facebook and other social media companies will have hefty levies imposed on them by the federal government if they refuse to negotiate deals with Australian news companies and pay to use their content online.

The proposal, which The Australian understands will be announced by the end of the week, aims to incentivise tech giants to renegotiate with media companies rather than face the more onerous and expensive prospect of ­financial penalties being slapped on them through the tax system.

In order to stop platforms such as Facebook pulling news content from Australian users so as to avoid the levy, the new scheme will capture companies based on revenue rather than if they use Australian news content.

The Australian understands the threshold for turnover being considered is in the order of hundreds of millions of dollars.

Despite the government’s plan to announce the policy this week, The Australian understands there is significant work to be done on how the scheme would work in practice, with a lengthy consultation period expected to be launched.

The move was made after Meta pulled out of numerous deals with media companies made via the ­Coalition-era media bargaining code. This prompted concerns from the government that other platforms – such as Google – would follow suit.

Other options considered were models similar to that in Canada and California, where money is collected from tech platforms by the government and distributed across media companies. But such schemes raised concerns about how the commonwealth would allocate such funds, with apprehension among media companies about the government effectively acting as an intermediary.

In 2021, the Morrison government introduced the news media bargaining code – legislation that required tech giants such as Meta and Google to pay for the right to display Australian news content on their platforms.

In February this year, Meta – owner of Facebook, ­Instagram, WhatsApp and Threads – announced that it would not be renewing its commercial deals with Australian news publishers, which were worth an estimated $70m a year to the industry.

Under the terms of the bargaining code, the Australian ­government could “designate” Meta, which would force the Mark Zuckerberg-controlled company back to the bargaining table to reach commercial terms with Australian media companies. Meta would likely face hundreds of millions of dollars in fines if it were designated under the code and still refused to negotiate deals.

Assistant Treasurer Stephen Jones has ministerial oversight of the matter after Jim Chalmers recused himself to avoid potential conflicts of interest because his wife works as a journalist for News Corp (publisher of The ­Australian).

On Monday a spokesperson for Mr Jones told The Australian: “The Albanese government supports journalists and a vibrant media industry in this country. We want to ensure that companies like Meta continue to make a contribution to public interest journalism in this country.”

A decision on Meta comes as negotiations continue between Australian news publishers and Google about the renewal of payment-for-content deals between those parties.

The existing deals between Google and Australian news media companies are yet to expire.