Meta Challenges Proposed Digital Levy
Meta has accused Australia of breaching its free trade agreement with the United States after Canberra introduced a proposed tax targeting major technology firms that fail to sign licensing deals with local media organisations.
The company, which owns Facebook and Instagram, described the planned levy as “indefensible.” It also argued that the policy goes beyond earlier digital services taxes that previously triggered tensions with Washington.
Meta said Australia intends to tax 2.25% of revenue from certain platforms. The firm argued that this approach violates commitments under the US–Australia Free Trade Agreement.
It further claimed that the proposal does not treat American companies fairly compared with local businesses.
“The tax plainly violates the commitments Australia and the United States made in their bilateral Free Trade Agreement, which requires Australia to grant American companies ‘treatment no less favourable’ than Australian peers,” Meta said in a blog post.
Company Warns of Wider Trade Fallout
Meta warned that the policy could escalate into broader trade action. It pointed to earlier digital tax regimes that triggered responses from the United States government.
The company also urged policymakers to reconsider similar measures. “We encourage any government considering a similar approach to look carefully at what this model actually represents,” it stated.
Australia Defends Media Funding Plan
Australia defended the proposal, which forms part of its “news bargaining incentive” policy. The initiative seeks to ensure that digital platforms contribute financially to local journalism through revenue sharing or compensation deals.
Officials said the government still reviews the proposal. They also confirmed that any revenue generated would support the domestic news industry.
A spokesperson for Assistant Treasurer Daniel Mulino said the government remains committed to the reform despite industry opposition.
Longstanding Dispute Over News Payments
The dispute between Meta and Australia dates back to 2021. At that time, Canberra introduced laws requiring platforms to negotiate payments with media organisations or face arbitration.
Meta briefly restricted news access in Australia in response to the legislation. However, it later restored access after reaching agreements with several major publishers.
The company eventually withdrew from news payments in 2024, which reignited tensions between both sides.
Broader Impact on Tech Industry
Google and TikTok have also raised concerns about similar regulatory approaches. They argue that digital taxes create uneven burdens across global tech firms.
Governments, however, maintain that such measures help sustain struggling news industries. As discussions continue, both sides remain divided over the future of digital taxation and media funding.
