Australia Tables New Legislation to Force Tech Giants to Pay for News
The News Bargaining Incentive introduces a levy on digital advertising revenue to close loopholes used by platforms to avoid paying publishers.
The Australian government has tabled the News Bargaining Incentive (NBI) legislation, a strategic move to ensure large technology companies compensate journalism outlets for the content they utilize. The law targets a perceived market failure where digital platforms profit from news production without contributing to its costs.
Under the new framework, social media and search companies with more than $250 million in annual Australian digital advertising revenue must strike deals with at least eight eligible news businesses—a requirement amended from six following negotiations between the Labor and Coalition parties. Platforms that fail to meet this threshold will be subject to a charge of 2.5% of their Australian digital advertising revenue. These collected funds are distributed through the News Journalism Payment Scheme, which utilizes a weighting formula based on the number of full-time equivalent (FTE) journalists employed by the news organizations. Additionally, the legislation includes a specific 5% allocation for the Australian Associated Press (AAP).
Closing the Loophole
This legislation serves as a successor to the News Media Bargaining Code. While the previous code generated between $200 million and $250 million annually, it contained a significant vulnerability: platforms could avoid payments by simply removing news content from their services. Meta, for instance, utilized this approach to bypass the system. The NBI model is designed to eliminate this loophole by applying the financial charge regardless of whether the platform actually carries news content on its site, shifting the incentive from content hosting to financial contribution.
Industry Implications
The shift toward a levy based on advertising revenue represents a fundamental change in how the government views the relationship between tech giants and the press. By decoupling the payment from the actual presence of news links, the government aims to create a more stable and predictable funding stream for journalism. However, the move has sparked debate over the scope of the funding pool. Critics argue that basing the charge on advertising revenue rather than total revenue limits the potential financial recovery for publishers.
Future Outlook
As the legislation moves forward, industry observers are watching how the revenue thresholds will impact the broader media landscape. There are ongoing concerns that the current design may favor larger media outlets over smaller, independent publishers. Furthermore, the legislation does not currently address the rise of AI-generated summaries, leaving a gap in coverage for AI companies that provide "zero-click" information. Whether the government will expand the NBI to include AI firms remains a key point of uncertainty for the future of the Australian media economy.