Labor's news bargaining incentive looks a lot like a digital services tax. Will Trump notice?

"Tech giants could soon have a new multimillion-dollar motivator to negotiate deals with Australian media companies to pay for news, after details of Labor's proposed news bargaining incentive were finally revealed this week. On Thursday, Treasury released a new consultation paper on the mechanism, which was first announced late last year. It is designed to pressure large digital platforms, including Meta (owner of Facebook and Instagram), Google and ByteDance (owner of TikTok) into paying Australian publishers for using their content."

"Under the proposed model, any digital platform earning more than A$250 million in annual revenue from Australia from search or social media services would face a charge equivalent to 2.25% of this revenue. But platforms could reduce this charge by negotiating or renewing commercial deals with Australian news outlets. Every dollar paid to publishers would reduce the amount payable by $1.50. That means it would always be cheaper to fund journalism directly than pay the charge."

"However, its design looks a lot like a "digital services tax" on big US tech companies. US President Donald Trump has put such measures in his sights, making it a bold move for Australia. Why big tech needed a nudge The proposed new model sits on top of the existing news media bargaining code introduced by the Morrison government in 2021. This code worked at first."

The proposed mechanism would charge any digital platform earning more than A$250 million annually in Australia from search or social services a levy equal to 2.25% of that revenue. Platforms could reduce the levy by negotiating or renewing commercial deals with Australian news outlets, with every dollar paid to publishers reducing the levy by $1.50, ensuring it is cheaper to fund journalism directly. The design resembles a digital services tax on large US tech firms, raising geopolitical sensitivity. The measure complements the 2021 news media bargaining code, which initially secured publisher deals but depended on platform participation. Meta announced it would not renew Australian news agreements in early 2024.

Read at The Conversation