Tech companies invoke possibility of Trump’s wrath in fight against Labor’s media laws

Tech companies are invoking Australia’s free trade agreement with the United States, and threats of a Trump administration retaliation in a bid to kill off the federal government’s proposal to force them to pay news companies.

The news media bargaining incentive is designed to force Meta, Google and TikTok to make commercial deals with Australian media outlets, or be forced to pay a dedicated 2.25% levy on local revenues.

The Albanese government has been consulting on the draft legislation since April, with submissions closing late last month.

Meta, the parent company of Facebook, Instagram and WhatsApp, has argued the federal government’s proposed news media bargaining incentive is a “discriminatory tax” that is “poorly designed” and “grossly unfair”.

Meta released its formal submission to the draft legislation on Thursday morning, and said it would insulate publishers from competitive pressures by guaranteeing revenue. The company again argued that news organisations share their content on Meta platforms for free because they get commercial benefits.

Meta said the NBI is “discriminatory, retroactive tax targeting a handful of foreign companies while competitors offering comparable services face no equivalent obligation.”

Meta claimed it “plainly violates” the US and Australia free trade agreement.

Meta’s position has been echoed by US tech lobby groups, who in letters to the government last month similarly cited the agreement. The National Foreign Trade Council, which represents US multinational tech companies, said the bill creates a disincentive for growth for digital platforms, and was potentially in violation of the agreement between the two countries.

“Legal analysis suggests the draft bill will result in potential inconsistencies with prohibitions against discrimination against US services and service suppliers under its national treatment and most-favored-nation rules; discrimination against digital products; and performance requirements, including a requirement to “achieve a given level or percentage of domestic content.”

The Software & Information Industry Association said the incentive would “likely run afoul” of Australia’s obligations in the trade agreement to do with cross-border trade in services, electronic commerce, and investment and would be the “type of measure that the Trump administration has said it might retaliate against.”

The organisation said the bill was built on a flawed premise, and most major media companies appeared to be economically viable.

News Corp Australasia executive chair, Michael Miller, however, said the bill clears a pathway for tech companies to make commercial agreements with news media.