Meta Says Australia’s Proposed News Tax Violates US Trade Agreement

Meta Platforms has accused Australia of breaching its free trade agreement with the United States by proposing a new tax on large technology companies that do not enter content licensing agreements with local news publishers.

The dispute marks the latest escalation in a years-long battle between the social media giant and the Australian government over compensation for news content shared on digital platforms.

Under the proposal, companies such as Meta, Google and TikTok could face a levy equivalent to 2.25% of their Australian revenue if they do not strike commercial agreements with local media organizations.

Meta argued that the proposed measure is discriminatory because it targets largely US-based technology companies while exempting Australian competitors.

In a public statement, the company said the proposal violates commitments made under the Australia-US Free Trade Agreement, which requires both countries to provide equal treatment to businesses from the other nation.

The company also criticized the scope of the proposed levy, noting that it would be calculated on total Australian revenue rather than revenue directly linked to news content or social media activity.

The proposal represents Australia's latest attempt to preserve funding for local journalism following Meta's decision to stop paying publishers for news content carried on its platforms.

Australia became the first country in the world to introduce mandatory news bargaining rules in 2021, requiring major digital platforms to negotiate payment agreements with news organizations or face government arbitration.

The legislation initially led Meta to temporarily block news content on Facebook in Australia before eventually reaching agreements with major publishers.

However, Meta announced in 2024 that it would not renew many of those arrangements, arguing that news content represents only a small portion of user engagement on its platforms.

In response, the Australian government shifted toward a tax-based approach designed to encourage technology firms to continue supporting the country's news ecosystem.

A spokesperson for Australia's treasury said the government remains committed to the proposal and that any revenue collected would be directed back to the media sector.

The disagreement is emerging as a broader geopolitical issue, with technology regulation becoming an increasingly sensitive topic in relations between Australia and the United States.

The proposed levy also comes amid growing scrutiny of digital platform regulation under the administration of Donald Trump, which has expressed concerns about foreign governments imposing regulations on American technology companies.

For enterprises and the technology industry, the dispute highlights the growing tension between national efforts to regulate digital platforms and the global nature of technology businesses. It also underscores the challenges governments face as they seek new mechanisms to support local journalism while balancing trade obligations and relations with major technology providers.