Some of the US’ biggest tech companies including Meta, Google, X and Apple are now formally lobbying the Trump administration to get involved with they say is a “coercive and discriminatory tax that requires US technology companies to subsidize Australian media companies.”
These major tech companies are members of the Computer and Communications Industry Association (CCIA) which has now made a made its submission to a request by the Office of the United States Trade Representative as part of the White House’s review of US trade policy.
Trade policy manager of the CCIA, Amir Nasr, has taken aim at the recently proposed News Bargaining Incentive.
Australia’s earlier News Media Bargaining Code was introduced in 2021 to incentivise digital platforms to enter into commercial deals with news publishers. However, it allowed platforms to avoid their obligations by removing news.
While Meta and Google signed deals with media companies back then, Meta decided last year not to renew those deals.
In December, the government proposed to establish a News Bargaining Incentive to encourage digital platforms to enter into or renew commercial deals with news publishers.
The Australian government says that the new bargaining incentive will apply to large digital platforms “operating significant social media or search services irrespective of whether or not they carry news” and will include a charge and an offset mechanism. Platforms that choose not to enter or renew commercial agreements with news publishers will pay the charge. Platforms with these agreements will, however, be able to offset their liability.
“Australia’s extraction and redistribution of revenue from US digital suppliers to local news businesses is reported to have cost US firms $140 million annually,” said Nasr.
“Currently, the two companies targeted by the law pay A$250 million annually through deals that were coerced through the threat of this law. However, with the threat of the new ‘incentive’ tax from the Australian government (rate yet to be determined), this cost is likely to significantly increase.”
Another issue that the CCIA have flagged is what it says is a proposed requirements for US online video providers to fund the development and production of Australian content.
It says that companies could be required to pay anywhere between 10% and 20% of their local expenditure on Australian content, “with qualifications that will likely make it very difficult for US companies to qualify.”
While the federal government announced plans to impose local content quotas on streaming services two years ago, it has more recently delayed plans to introduce these measures as questions were raised over how those directives would be compatible with the Australia-US free trade agreement.
“Australia’s online video streaming market is estimated to generate up to $2.3 billion of annual revenue, with the majority of it earned from US companies. If the Australian government pursues the 20% expenditure mandate it has floated in the past year, that would put this revenue at risk,” said the CCIA.
