Australia has passed legislation forcing major tech platforms to strike commercial agreements with local news publishers or pay a levy on their Australian digital advertising revenue.

The News Bargaining Incentive applies to companies operating a significant social media or internet search service in Australia whose corporate group generates more than A$250 million in local digital advertising revenue.

Platforms that fail to reach eligible agreements will face a 2.5% charge, which could capture Google, Meta, TikTok and Microsoft-owned LinkedIn.

Companies can partially or fully offset the levy through spending under commercial agreements supporting the production or distribution of Australian news. To qualify for an offset, a platform must have agreements covering at least eight separate Australian news business groups.

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The government has structured the system to make signing publisher deals cheaper than simply paying the charge.

Assistant Treasurer Daniel Mulino and Communications Minister Anika Wells (pictured) said the law sends platforms a clear message to pursue commercial agreements with Australian media companies.

Any levy revenue collected will be returned to the news sector through the accompanying News Journalism Payments scheme rather than remaining with the government.

Payments will be based largely on the number of eligible editorial workers employed or engaged by publishers, including freelancers. Additional support will be directed towards regional journalism, smaller publishers and outlets serving underrepresented communities.

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The government estimates fair commercial agreements could deliver between A$200 million and A$250 million to Australian media each year. If platforms instead pay the charge, annual revenue could reach between A$350 million and A$400 million.

The legislation replaces weaknesses in Australia’s 2021 News Media Bargaining Code, which allowed platforms to avoid payment obligations by removing news from their services.

Meta declined to renew its agreements with Australian publishers in 2024 and has described the new scheme as “grossly unfair” and a “discriminatory tax”.

The law’s passage comes a month after Meta was escalating its fight against the levy, which earlier draft calculations suggested could cost the social media giant more than A$33 million annually.

Meta had also temporarily blocked Australian news from Facebook when the original bargaining rules were introduced in 2021.

The new framework applies regardless of whether a platform chooses to carry news, closing that earlier loophole.