Australia Takes New Aim at Big Tech: A 2.25% Tax on Platforms That Won't Pay News Publishers

Australia released draft legislation this week creating a 2.25% revenue tax on major digital platforms that refuse to negotiate payment deals with local news publishers. The proposed News Bargaining Incentive specifically targets Meta, Google, and TikTok, and Parliament is expected to introduce it on July 2.

This builds on Australia's 2021 News Media Bargaining Code, which set up a framework where platforms and publishers could be forced to arbitrate disputes, but relied mainly on voluntary agreements rather than financial penalties. Under the new approach, platforms earning above certain revenue thresholds must either make commercial deals with Australian news outlets or pay the tax on their Australian earnings.

How the Tax Would Work

The legislation applies the tax to platforms that meet specific earning thresholds in Australia, though the government hasn't yet announced the exact numbers. The 2.25% tax applies to qualifying Australian revenue—essentially a cost of doing business for platforms that choose not to sign payment agreements with news publishers.

Big tech companies have pushed back hard. Google warned that the tax "risks the ongoing viability of commercial deals with news publishers in Australia," and the industry has characterized the approach as a misguided "digital services tax" that won't create a sustainable news sector. The platforms argue the proposal misunderstands how modern advertising networks actually work.

Who Supports the Change

Australia's major media companies—Nine Entertainment, ABC, and News Corp Australia—released a joint statement calling the government's approach "a critical step toward securing the future of Australian news." The fact that these normally competing outlets spoke with one voice shows how financially pressured the industry is. Traditional advertising revenue has dried up as readers moved online, and ad money has followed them to the big platforms.

Why Australia Is Doing This a Different Way

Australia's approach appears designed to avoid a mistake that happened in Spain. When Spain introduced a "snippet tax" that forced Google to pay for news headlines shown in search results, Google simply stopped showing news content from Spanish publishers on its platform. Spanish readers lost a major way to discover news, and the outcome disappointed almost everyone. Australia is trying a different angle: instead of taxing platforms for content, it's creating a financial incentive to negotiate. That's supposed to be less likely to backfire.

The broader context here is that this regulatory tension has played out across multiple countries over the past five years. France, Canada, and the UK have each tried their own version of requiring platforms to pay publishers, with mixed results. Australia's model sits somewhere in the middle—more direct pressure than voluntary approaches, but structured to avoid completely shutting down news discovery like Spain did.

The Practical Challenges

Figuring out what counts as "Australian revenue" turns out to be surprisingly hard for companies that run global advertising systems. When an ad is sold, served, and clicked, the data might cross multiple countries in seconds. Determining where the money truly came from—Australia or somewhere else—requires new accounting systems that platforms will need to build. This administrative work may actually push some platforms toward making deals rather than paying the tax, especially for smaller companies operating near the revenue threshold.

Other Support for News

Australia isn't relying solely on platform payments. The government has also introduced three additional tax measures to help the news industry: a tax credit for newsrooms that hire journalists, a tax credit for people who pay for news subscriptions, and quasi-charitable status for certain news outlets. Other proposals floating through Parliament would add tax breaks for news subscription purchases and investment incentives for public-interest journalism.

This multi-layered approach reflects an uncomfortable truth: platform payments alone probably won't save the news business. The real problem is that advertising money has permanently migrated to platforms and search engines. Subscription models work, but mainly for big-name outlets in major cities that already have loyal readers.

The Bigger Picture Globally

Australia's move comes as governments everywhere are clamping down on how platforms handle publishers and creators. The European Union's Digital Services Act includes rules around content payment transparency. The UK's Online Safety Bill is pressuring platforms indirectly toward revenue-sharing arrangements with content makers.

From a regulatory design perspective, Australia's approach avoids some of the pitfalls that sank Spain's headline tax. The 2.25% rate appears high enough to exceed the typical profit margin on Australian operations for these platforms, which means making a deal is usually cheaper than paying the tax. That logic should create incentive to negotiate, rather than simply drop content from the country.

One thing worth considering: the July 2 timeline suggests the government wants to move fast—possibly before platforms have fully calculated their compliance costs or developed alternatives. This speed could limit the back-and-forth discussion with industry that might catch unintended consequences or technical issues before the law takes effect.

The proposal marks a significant shift from Australia's earlier voluntary framework toward direct financial consequences. Whether this approach works better than Spain's content tax or Canada's mandatory arbitration model—both of which had mixed results—will likely influence similar laws being drafted in other countries dealing with the same media sustainability crisis.