Meta and various tech firms that decline to enter into content agreements with Australian news organizations could face hefty multimillion-dollar penalties, as Labor’s proposed media bargaining initiative aims to link fines to the local revenues of major platforms.
New regulations will apply to large social media and search platforms generating at least $250 million in Australian revenue, regardless of whether they distribute news content, as per recent disclosures from Assistant Treasurer Daniel Mulino.
Labor has shown a slow response in formulating a news bargaining incentive plan due to apprehensions about potential backlash from US President Donald Trump regarding his approach to US-based platforms.
Initially announced in December 2024, the implementation date remains uncertain, pending a month-long public consultation by the government.
These new regulations are intended to compel payments from platforms which have chosen to withdraw from the news media bargaining framework established during Prime Minister Morrison’s administration, a structure that has enabled publishers like Guardian Australia to secure around 30 agreements valued at an estimated $200 million to $250 million annually.
The decline in advertising revenue has significantly affected major media operators like News Corp and Nine and Seven West Media, leading to layoffs and cost reductions, while digital giants such as Google and Facebook’s parent companies continue to enjoy substantial profits.
Meta, which owns platforms like Facebook and Instagram, has declined to enter into new contracts under the existing terms, whereas Google has willingly renewed some contracts with publishers, albeit at lower payment rates.
Tech firms can bypass existing arrangements by entirely removing news content from their platforms, a move made by Meta in Canada in 2023.
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Labor’s new incentive initiative aims to assist news publishers in obtaining funding even from platforms that have opted out of the news bargaining system and to support smaller publishers that depend heavily on digital platforms for content distribution.
A new discussion paper outlines that if a tech platform refuses to engage in a content agreement, it will be required to pay either a portion of the gross revenue produced in Australia or just the revenue stemming from digital advertising. This penalty would be enforced at the group level and would not extend to smaller subsidiary brands owned by larger corporations.
The Treasury has indicated support for a $250 million annual income threshold for this new framework and suggested that the government use the total group income generated in Australia as the primary benchmark for payments.
Preliminary analyses estimate the worth of existing agreements with publishers is approximately equivalent to 1.5% of the revenue generated by relevant platforms in Australia. The new fines could reach 2.25% of revenue to facilitate trading under existing laws. According to the proposed structure of the new incentives, a portion of eligible expenses might be utilized to decrease penalty amounts.
Companies will need to self-evaluate their liabilities under these regulations, but the legislation will depend on a broad definition of social media and search.
Despite not having a registered business account in Australia, Facebook’s Australian subsidiary announced in April that it generated $1.46 billion in revenue for the year ending December 31, an increase from $1.34 billion the previous year, despite declining advertising markets.
President Trump has previously threatened to impose significant trade tariffs on countries perceived to treat American firms unfairly. His former confidant and billionaire advisor, Elon Musk, is the owner of Platform X.
Nonetheless, Labor is proceeding with the introduction of new penalties following Anthony Albanese’s productive meeting at the White House last month.
Former chairman of the competition watchdog, Rod Sims, has expressed support for Labor’s proposed penalty system, stating that Google and Facebook are profiting from content created by Australian news organizations and that failing to bolster journalism would enable lower-quality sources to flourish.
Sims had previously estimated that commercial contracts established under these terms amounted to $1 billion over a four-year period.
The government will continue consultations regarding the incentive plan until December 19, after which it will finalize its strategy in 2026.