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

      The News Bargaining Incentive will be effective from 1 July 2026. Platforms engaging with news organisations will benefit from full or partial offsets against the levy. The legislation clearly states that pure AI chatbot services are not included. Communications Minister Anika Wells and Prime Minister Albanese announced the draft on Tuesday.

      On Tuesday, the Australian government unveiled a draft law for a “News Bargaining Incentive,” which imposes a 2.25% levy on the Australian revenues of Meta, Google, and TikTok, applicable unless these platforms negotiate agreements to compensate local news publishers for journalism featured on their services. This proposal was shared by Communications Minister Anika Wells and Prime Minister Anthony Albanese during a press conference in Canberra.

      The levy is set to apply starting in the 2025–26 financial year, commencing on 1 July 2026. Meta, Google, and TikTok have not responded to requests for comments as of yet. The structure of the mechanism is designed as a market incentive rather than a requirement.

      Platforms that negotiate and establish agreements with Australian news publishers will receive offsets against the levy, with larger offsets available for agreements made with smaller, regional news outlets. If a platform does not engage in any agreements, it will be required to pay the full 2.25% levy on its Australian revenue, with the funds allocated to news publishers based on their journalist count.

      Wells described the approach as a combination of incentives and penalties: “Platforms should engage with news organisations. If they opt not to, they will end up paying more.” Albanese remarked: “Our goal is to encourage organisations to collaborate with news organisations to finalize these agreements, allowing us to make progress.”

      The levy is based on the platform’s consolidated revenue “attributable to Australia,” determined from their financial statements from three years prior. This backward-looking calculation is designed to prevent manipulation through revenue reallocation.

      The precision of this calculation base is crucial: the Australian revenues for major global platforms like Meta and Google are not always detailed publicly, and the criteria for what is “attributable to Australia” concerning advertising revenue generated in a global auction may be debated during the legislative process. Australia has not provided an estimate of the levy’s potential generation if the major platforms refuse to negotiate.

      This proposal replaces the 2021 News Media Bargaining Code, the law from the Morrison government which mandated good faith negotiations between platforms and publishers or risk mandatory arbitration. The government believes that those rules "are no longer effective."

      The original code had a complex background. Following its passage, Meta briefly blocked Australian users from sharing news articles on Facebook in a contentious standoff that garnered worldwide attention. The platform later established agreements with various Australian media companies, as did Google. However, these agreements lapsed in 2024, and since the platforms chose not to renew them, the government determined that the voluntary negotiation framework had reached its end.

      The draft bill clearly states that "artificial intelligence services that solely use large language models to provide answers to questions or other information" are excluded. This exemption aims to prevent the levy from applying to AI chatbots such as Gemini, Meta AI, or ChatGPT when used directly as question-answering tools.

      The distinction made between a search engine or social media feed that utilizes journalism as supplementary content and an AI assistant that gives direct answers without guiding users to publisher websites reflects the government's effort to differentiate platforms that derive commercial value from news distribution from those that no longer distribute news at all.

      The viability of this legal distinction may come into question as the boundaries blur, particularly as AI-driven search begins to supplant traditional link-based results—a matter the legislation will need to address over time.

      The international backdrop is pertinent. Canada enacted its Online News Act in 2023 under a similar premise; Meta responded by blocking news sharing on Facebook and Instagram for Canadian users before ultimately returning to a limited agreement. The EU's Copyright in the Digital Single Market Directive established neighbouring rights for press publishers in 2019, which have been under continuous dispute with Google across several member states.

      Australia's News Bargaining Incentive represents the most explicit iteration of the "negotiate or pay" model, featuring a defined percentage rate instead of an open-ended arbitration process. The 2.25% rate applies to revenues across the designated platforms, rather than being limited to advertising revenue or related income, making it a broader tax instrument compared to the strategies adopted in Europe.