Australia passed legislation on Thursday that will force tech giants to pay millions of dollars in levies if they fail to strike commercial deals with local media outlets for news on their platforms.
The News Bargaining Incentive taxes the companies 2.5 per cent on their advertising revenues unless they strike agreements, a Reuters report stated.
This comes as the push by Nigerian media owners to secure compensation from global technology companies has intensified as the digital platforms have become dominant channels for the distribution and consumption of news.
Publishers in the country have argued that while they bear the cost of producing journalism through investments in reporters, investigations, editing, technology and distribution, platforms such as Google and Meta derive significant commercial value from the content without adequately compensating the organisations that produce it.
The concerns have become more pressing with the decline in traditional advertising revenue and the growing dominance of global technology companies in the digital advertising market.
Media stakeholders have consequently called for a framework that would enable publishers to negotiate compensation with technology platforms for the use, aggregation and distribution of their content.
In recent times, the campaign has attracted government attention, with President Bola Tinubu directing the Federal Competition and Consumer Protection Commission (FCCPC) to investigate major technology companies over allegations relating to the exploitation of Nigerian media content and potentially anti-competitive practices.
According to Reuters, proceeds from the scheme would be directed to local Australian news outlets, whose content helps drive user engagement and advertising revenue on the tech firms’ platforms.
The levy applies to Meta, Alphabet, TikTok and Microsoft’s LinkedIn, covering companies with a “significant” social media or search service in Australia, and local advertising revenue exceeding A$250 million ($178 million).
Platforms can avoid the charge by reaching agreements with at least eight different publishers by the end of their reporting period. The value of those deals would be offset against their levy liability, it said.
The deals must support the production of news content or relate to news content produced by the publishers being made available online by the platform, the legislation said.
Spending with large publishers carries a 150 per cent offset, while spending with small and medium-sized outlets carries a 200 per cent offset.
Any single deal is also capped at 25 per cent of a platform’s levy liability.
“The legislation is here, and the message to platforms to pursue commercial deals is clear. Deals will need to be finalised before the end of a digital platform’s financial reporting period to be used to offset their liability in that period,” the government said in a statement.
“This is an important day for Australian news businesses and Australian journalism,” it added.
The passage of the News Bargaining Incentive comes one day after parliament passed laws restricting gambling advertisements.