A powerful trade group representing Google and Meta has branded Australia’s plans to force the tech giants to support local media a “tax” that could breach Australia’s free trade deal with the US, as the Trump administration toughens its posture on global trade.
The submission from the National Foreign Trade Council was made to Treasury in December, but comes amid ongoing efforts by the Albanese government to secure exemptions from US President Donald Trump’s tariffs on imports, which are set to jump for Australia from 10 to 15 per cent.
It called the News Bargaining Incentive “legally dubious” and explicitly raised concerns over whether it would run afoul of Australia’s free trade deal with the US.
Australia’s trade pact with the US has already been undermined by Trump’s unilateral tariffs and the Albanese government has declared its policies, which are designed to support Australia’s local media ecosystem as tech giants pull billions from Australia, comply with all international obligations.
The tech giants’ concerns, which have gone unreported until now, ramp up pressure on the Albanese government’s efforts to strike a deal with the Trump administration on tariffs as Trade Minister Don Farrell travels to the US, where he is expected to meet with senior officials.
The Trump administration has previously said the US would “investigate” countries that levy “discriminatory or extraterritorial taxes” against its companies and citizens. In Europe, French President Emmanuel Macron has acknowledged a looming standoff with the US over the EU’s own regulation of digital platforms.
At issue in Australia is a policy aimed at forcing tech giants Google, Meta, TikTok and possibly others to support local media through what the Australian government describes as a charge and offset scheme.
Under the incentive, social media and search companies raking in revenue above $250 million a year will face a charge that can be offset by striking commercial deals with media companies. Companies that meet the government’s criteria will be captured regardless of whether they carry news.
“The proposal … appears inconsistent with Australia’s international trade commitments, including obligations under the Australia-United States Free Trade Agreement,” the National Foreign Trade Council’s submission reads.
Assistant Treasurer and Minister for Financial Services Daniel Mulino said the government remained committed to pushing forward with the policy following consultation late last year.
“We are a consultative government and continue to work with stakeholders,” Mulino said in a statement. “Australia’s policies on digital platforms are consistent with our trade obligations.”
Meta, which owns Facebook and Instagram, brought in revenue of $1.46 billion in Australia in 2024 and paid $44 million in income tax. The tech giant is broadly aligned with the lobby group’s position, according to one person familiar with its work on the policy.
Meta declined to comment. Google and Microsoft did not respond to questions about whether the companies were consulted on the submission or whether they share the concerns raised in the document.
Google has said publicly that it remains committed to supporting journalism. Last year alone, Google renewed more than 50 agreements related to its “news showcase” product.
Google reported $1.98 billion in local revenue in the 2024 calendar year, and $83 million in income tax. The search, advertising and AI giant has a wide spread of commercial agreements with Australian media companies after first striking deals in 2021.
However, over the last year, it has struck fresh deals on cut-price terms, leading media executives to push the Albanese government to expedite its plans for regulatory action.
Among the largest of Google’s earliest deals were with News Corp, which publishes The Australian; Nine Entertainment, owner of this masthead and the Australian Financial Review; and Seven West Media. These agreements were reached in 2021 under threat of the incentive’s predecessor policy, the News Media Bargaining Code.
Google also has commercial agreements with The Guardian’s Australian outpost, and the ABC, among dozens of other publications.
Meta, meanwhile, has since walked away from its 2021-era news deals. The move, which the company announced in early 2024, triggered a wave of media industry job cuts. Following the Bargaining Incentive’s announcement later that year, Meta has said it continues to hold concerns about “charging one industry to subsidise another”.
“The proposal fails to account for the realities of how our platforms work, specifically that most people don’t come to our platforms for news content and that news publishers voluntarily choose to post content on our platforms – for free – because they receive value from doing so,” a Meta spokeswoman said.
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John Buckley is a CBD columnist for The Sydney Morning Herald and The Age.Connect via email.