Australia passes new law to fine tech giants that don't pay for local news

Australia’s parliament has passed the “News Bargaining Incentive” on Thursday, a law focused on top tech platforms like Meta, Google, TikTok and Microsoft, handing them a choice between signing paid deals with Australian news publishers or giving up 2.5% of their local advertising revenue to the government.

The levy is set to affect only firms with a “significant” search or social media service in the country alongside local advertising revenue worth over A$250 million ($178 million), according to The News and SBS. According to current figures, these requirements cover Meta, Alphabet’s Google, TikTok and Microsoft’s LinkedIn.

Terms set for the tech giants

To ensure the companies do not escape the 2.5% charge entirely via loopholes, however, the law has terms built-in so the funds are well distributed. These platforms are now required to sign agreements with at least eight separate Australian publishers before their financial reporting period ends, and none of the deals can be credited for more than 25% of what they would otherwise owe.

The 25% cap is the Australian government’s method to plug an obvious potential loophole. Without this cap, a platform could simply give one large media group a huge check, completing the workaround, and leaving smaller newsrooms with nothing.

Funds spent with large publishers count towards 150% of a platform’s bill, while spending with small and medium-sized news outlets counts towards 200%. The law also stated the deals must fund news production or the online distribution of publisher content.

Legislation funds Australian news organizations

The Australian government believes publisher content drives the ad sales and all forms of engagement these tech platforms benefit from, so a share of the money belongs with the newsrooms.

The legislattion extends the News Media Bargaining Code introduced in 2021, which Australia intended to use in pushing platforms toward direct negotiations with publishers.

Parliament passed the new measure a day after clearing separate laws that restrict gambling advertising. “This is an important day for Australian news businesses and Australian journalism,” the government said in a statement.

AI angle important to publishers

Some platforms have already started paying for journalism to feed AI systems. Google has said it would work with the Associated Press to source quality information through its Gemini service, and OpenAI struck a deal with Axios to fund 13 new local newsletters, staff and technology included.

AI answer engines are now summarising the news readers used to click through to read in entirety, and publishers now also want the value of their reporting recognised in cash, not just in citations.

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