Australia announces a 2.25% tax on Meta, Google, and TikTok.

      The News Bargaining Incentive will commence on 1 July 2026. Platforms interacting with news organizations will be eligible for full or partial offsets against the levy. The legislation specifically excludes AI chatbot services from its scope. Communications Minister Anika Wells and Prime Minister Albanese jointly announced the draft on Tuesday.

      On Tuesday, the Australian government unveiled a draft bill proposing a “News Bargaining Incentive,” which entails a 2.25% levy on the Australian earnings of Meta, Google, and TikTok, applicable unless these platforms negotiate agreements to compensate local news publishers for journalism featured on their services. Anika Wells and Prime Minister Anthony Albanese introduced the plan during a press conference in Canberra.

      This levy is set to come into effect from the 2025–26 financial year, beginning on 1 July 2026. Meta, Google, and TikTok did not immediately respond to inquiries for comments. The framework is designed as a market incentive rather than an obligation.

      Platforms that successfully negotiate and establish agreements with Australian news publishers will receive offsets against the levy, with greater offsets available for deals with smaller, regional news entities. If a platform fails to secure any agreements, the full 2.25% levy on its Australian revenue becomes due, with the resulting funds allocated back to news publishers based on the number of their journalists.

      Wells described the approach as a carrot-and-stick model: “Platforms should negotiate with news organizations. If they choose not to, they will end up paying more.” Albanese added: “What we’re encouraging is for organizations to cooperate with news publishers, finalize these deals, and then we can progress.”

      The calculation for the levy is based on the platform’s consolidated revenue attributed to Australia, determined from their financial statements from three years prior, aiming to prevent manipulation through revenue reallocation.

      The specificity of this calculation is crucial: Australian revenues of global companies like Meta and Google are not always detailed publicly, and the definition of what qualifies as “attributable to Australia” for globally auctioned advertising revenue could become contentious during the legislative process. Australia has not provided an estimate for potential revenue from the levy if major platforms refuse to negotiate.

      The proposal directly replaces the 2021 News Media Bargaining Code, the law from the Morrison government which mandated platforms to negotiate in good faith with publishers or face compulsory arbitration. The current government believes those regulations are “no longer functioning effectively.”

      The previous code had a complex history. After its implementation, Meta briefly blocked Australian users from sharing news articles on Facebook during a widely publicized dispute that drew international attention. Subsequently, Meta and Google formed agreements with several Australian media organizations, but these arrangements lapsed in 2024 and were not renewed, leading the government to conclude that the voluntary negotiation framework was no longer viable.

      The draft bill specifically excludes “artificial intelligence services that solely employ large language models to provide answers to inquiries or other information.” This exemption aims to prevent the levy from applying to AI chatbots like Gemini, Meta AI, or ChatGPT when they are used directly for answering questions.

      The differentiation between a search engine or social media platform that utilizes journalism as supplementary content, and an AI assistant that delivers direct responses without linking to publisher websites, demonstrates the government's effort to delineate between platforms that derive commercial benefit from news distribution and those that have simply ceased to distribute news.

      The durability of this distinction as categories converge—especially as AI-driven search increasingly supersedes conventional link-based results—remains a question the legislation will confront over time.

      The international context is pertinent. Canada enacted its Online News Act in 2023 under similar principles; Meta's reaction was to block news sharing on Facebook and Instagram for Canadian users, although the company eventually entered into a limited agreement. The EU's Copyright in the Digital Single Market Directive established neighboring rights for press publishers in 2019, leading to ongoing disputes with Google across several member states.

      Australia’s News Bargaining Incentive is the most definitive version yet of the “negotiate or pay” model, introducing a fixed percentage rate instead of an open-ended arbitration framework. The 2.25% rate applies to revenue across the specified platforms, extending beyond just advertising or news-related revenue, making it a broader tax mechanism than those employed in Europe.