BY COMFORT OGBONNA
Meta has intensified its opposition to Australia’s proposed digital platform tax, arguing that the measure violates the free trade agreement between Australia and the United States and unfairly targets major American technology companies.
The owner of Facebook and Instagram claimed that Australia’s plan to impose a 2.25% levy on the local revenue of certain technology platforms is discriminatory and could create unnecessary tensions between two long-standing allies. The dispute marks the latest chapter in a battle that has been unfolding for nearly five years over whether social media companies should financially compensate news organizations for content shared on their platforms.
Under the proposal being considered by Australia’s center-left government, large technology firms that do not enter licensing agreements with local news publishers could face a tax equivalent to 2.25% of their Australian-generated revenue. Meta argued that the measure is particularly aggressive because it would apply to all domestic revenue, including income unrelated to news content or social media activities.
In a blog post published on Thursday, the company said the proposal breaches commitments made under the Australia-U.S. Free Trade Agreement, which requires both countries to provide foreign companies with treatment that is no less favorable than that given to domestic businesses.
Meta stated that the planned levy goes beyond the scope of digital services taxes introduced in other countries, some of which have already drawn opposition and trade-related responses from the U.S. government. The company warned that governments considering similar approaches should carefully examine the broader implications of such policies.
The Australian government, however, has signaled that it remains committed to moving forward with the proposal. A spokesperson for Assistant Treasurer Daniel Mulino said any funds raised through the tax would be redirected to support Australia’s news media industry, which policymakers argue has suffered financially as advertising revenue increasingly shifts toward digital platforms.
The disagreement stems from Australia’s pioneering efforts to make technology companies pay news publishers for content that attracts users to their platforms. In 2021, Australia became the first country to introduce legislation requiring major digital platforms to negotiate payment agreements with news organizations or face compulsory government arbitration.
The law sparked a dramatic response from Meta, which temporarily blocked news content from appearing on its platforms in Australia. The standoff eventually ended when the company reached commercial agreements with many of the country’s leading media outlets.
However, tensions resurfaced in 2024 when Meta announced it would stop paying for news content under those arrangements. Rather than forcing disputes into arbitration, the Australian government proposed a new framework that would effectively encourage companies to strike licensing agreements by imposing a tax on those that refuse.
The revised model also broadens the scope of companies affected. While the original framework primarily targeted Meta and Google, the proposed tax would also apply to the video-sharing platform TikTok. The expansion reflects growing concerns among policymakers that digital advertising revenue is increasingly concentrated among a small number of large technology firms.
Google has previously entered licensing agreements with Australian publishers under the original system but has also voiced concerns about the proposed tax. Technology companies argue that they already drive significant traffic to news websites and should not be required to pay additional fees simply for linking to content.
The dispute comes at a sensitive time in U.S.-Australia relations, particularly under the administration of President Donald Trump. Efforts by Australia to regulate largely U.S.-based technology companies have become a source of friction between the two countries.
In recent months, some U.S. lawmakers have criticized Australia’s approach to online regulation, particularly regarding content moderation and digital platform oversight. A congressional committee has even requested testimony from Australia’s internet regulator over concerns that some policies could restrict the free speech rights of American citizens and companies.
The regulator has not yet indicated whether she will comply with the request.
As Australia moves closer to finalizing its proposed tax framework, the debate is likely to attract increasing international attention. Supporters argue that the measure is necessary to ensure the sustainability of public-interest journalism, while critics contend that it unfairly targets foreign technology companies and risks triggering broader trade disputes between key allies.
The outcome could have implications well beyond Australia, potentially influencing how other governments around the world approach the increasingly contentious relationship between digital platforms and the news industry.