The Albanese government has unveiled its proposed design for a news bargaining incentive in response to Meta’s withdrawal from the Morrison government’s previous news media bargaining code.

In 2021, the Morrison government introduced a news bargaining code under which Google and Meta (Facebook and Instagram) agreed to pay a fee for displaying news content on their platforms through commercial agreements with participating news organisations. The aim of the code was to ensure that Australian news businesses received fair remuneration from digital platforms for the value generated from news content. The code was mandatory, but it was not enforced because both Google and Meta made individual voluntary deals with publishers.

The ABC was a beneficiary, reaching agreements with Google and Facebook and using the money to fund an extra 60 journalists in regional Australia.

The code worked effectively – until Mark Zuckerberg announced Meta’s withdrawal in 2024, at a cost to news organisations of about $70m. Google opted to remain, but Meta’s withdrawal badly undermined the scheme.

In late 2024 Labor proposed a new model and now, following extensive consultations, has unveiled its proposed design for a news bargaining incentive (NBI).

The proposed legislation aims to address a limitation in the news media bargaining code which allowed digital platforms to avoid their obligations by removing news from their service. Under the NBI, digital platforms with significant social media or search services (including Google, Meta and TikTok) will be encouraged to do commercial deals with eligible news publishers and given generous offsets to reduce their liabilities.

Platforms that do not enter into commercial deals will be charged 2.25% of their Australian revenue, with all payments distributed back to the news media sector. However, the government has emphasised its strong preference not to collect any funds. Rather, it wants to encourage digital platforms to enter into agreements with publishers.

In a joint statement the ABC and other major news organisations strongly supported the decision, seeing it as “a critical step toward securing the future of Australian news.”

“We urge all parliamentarians to support safeguarding Australian journalism and the vital role it plays in our democracy, for all Australians,” they said.

Google and Meta have opposed it, with Meta describing it as ‘government-mandated transfer of wealth’. Google can well claim to be aggrieved given that it did not withdraw from the code and currently has agreements with around 90 news businesses and 226 outlets. It rejected the need for ‘this new tax’, claiming it ignored existing deals and unfairly exempted players including Microsoft, Snapchat and OpenAI.

The scheme’s original architect, Rod Simms, welcomed the change saying the government had got the balance right. But, he said, it should include AI.

Former ACCC chair Allan Fels, now chair of the Public Interest Journalism Initiative, called for the plan to be swiftly implemented.

“The delay in progressing these reforms has only reinforced the extent to which large digital platforms have been able to avoid accountability. That imbalance in bargaining power has only become more entrenched over time,” Fels said.

We agree.

As with the news bargaining code, small news organisations could miss out, because the tech companies will be more likely to enter into agreements with larger organisations. However, a proposed higher tax offset for deals with smaller organisations might help address this concern.

It is not clear whether Donald Trump will intervene – but we note that a spokesperson for the US government described the new policy as a form of  ‘foreign extortion’.  According to the AFR, powerful US lobby groups representing the technology giants have demanded ‘targeted trade remedies’ from the US government in retaliation for what they called a targeted tax on US digital platforms.

When Meta withdrew from the code in 2024, ABC Friends considered a number of possible responses including the imposition of a news levy, but we thought an additional tax would be unlikely to gain favour with any government. On its face, the incentive seems to be a workable compromise but we’ll look closely at the draft legislation and at issues such as its coverage (including AI) before drawing any firm conclusions.

Regardless, we will continue to argue that the ABC should be eligible for inclusion – while continuing to stress that as a  public media organisation it should be fully funded by government to do its job. 

Consultation on the draft legislation is open until 9 May.