WASHINGTON—Last week, Australia’s Parliament passed the News Bargaining Incentive, a law that requires large digital platforms to strike payment deals with Australian news publishers or turn over 2.75 percent of their local digital advertising revenue. Google, Meta, TikTok, and Microsoft’s LinkedIn fall within its scope.
“Australia wants to profit from America’s tech industry by forcing our most successful companies to subsidize its media outlets,” said Patrick Hedger, Director of Policy at NetChoice. “The Trump administration should open a Section 301 investigation and show that discriminatory taxes on American firms carry a cost.”
The News Bargaining Incentive gives American platforms two options, and both cost them money. They can sign payment deals with Australian news companies, or they can pay a levy on their local advertising revenue. Either path forces successful American firms to subsidize Australia’s domestic media industry, distorting the market to favor local incumbents.
The tax follows a pattern other countries have tested against the American tech sector. The United Kingdom, France, and Canada have each imposed digital services taxes that fall almost entirely on U.S. companies, and the European Union has used laws like the Digital Markets Act to extract billions of dollars in fines from the same firms. Australia’s levy applies to search and social platforms with more than A$250 million in local advertising revenue, a threshold built to almost exclusively capture successful American companies.
Section 301 of the Trade Act of 1974 exists for cases like this one. It gives the U.S. Trade Representative authority to investigate and respond to foreign practices that discriminate against American commerce, and USTR used that authority against France’s digital services tax in 2020.