Reactions to the government’s consultation paper on the proposed news bargaining incentive have begun trickling in — and US tech lobby groups aren’t happy.
Several Washington-based trade associations have warned the incentive is inconsistent with Australia’s free trade commitments with the US, and one lobby group has warned US President Donald Trump could be moved to “retaliate” if the proposal isn’t withdrawn.
The incentive is Labor’s proposed method of preventing tech platforms from avoiding the existing news media bargaining code by withdrawing news from their services. Both schemes aim to make companies like Google and Facebook pay Australian news publishers for using their content to drive traffic on their platforms.
The incentive would impose a fee on “large digital platforms that choose not to enter or renew commercial agreements supporting Australian journalism”, while allowing those that do strike deals to “reduce their liability, ideally to nil, with a deduction”, according to the consultation paper.
The consultation paper was promised by “early 2025”, but unexplained delays meant it was only released last month. Submissions closed last Friday, and some — but not all — comments have been made public by the organisations that wrote them.
‘Discriminatory and arbitrary’
Several US lobby groups have published the submissions they say they made on their own websites. They have invariably been critical of the scheme.
The National Foreign Trade Council, a Washington-based association for businesses trading internationally, said the proposal was “fundamentally flawed” and should be abandoned. It argued that “removing the choice of whether to provide news as a service offering by compelling revenue-based payments effectively converts the framework from regulation to taxation”.
“The proposal is framed on the premise that a decision by platforms not to provide news services would result in a shortfall in funding for Australian journalism,” the group said in its submission filed last Friday. “Placing the onus for the commercial viability of Australian journalism on a handful of companies due to evolving media consumption patterns is a flawed premise.”
Another US group, the Software and Information Industry Association, whose members include AI software, cloud service, and digital content providers, said the incentive should be withdrawn because it “would violate Australia’s obligations under the 2005 US-Australia Free Trade Agreement”.
“Specifically, the incentive would likely run afoul of Australia’s obligations in the chapters dealing with cross-border trade in services, electronic commerce, and investment. It stands to reason, therefore, that the incentive would qualify as the type of measure that the Trump administration has said it might retaliate against,” the group wrote in its submission filed last Thursday.
“While the concern among Australian policymakers about preserving a vibrant and diverse news media in Australia is understandable, it is not at all clear why a small group of, mostly, US tech companies should be made to foot the bill,” the submission said. “The incentive, which is designed as a gross-based tax on certain digital revenues, is effectively a digital services tax (DST) on primarily US platforms. DSTs have been condemned by successive US administrations, as well as members of both political parties in the US Congress, as unacceptable tax policy.”
The group also warned the incentive could “chill the incentive of foreign companies to invest in Australia”.
NetChoice, a Washington-based internet business association whose aim is “to make the internet safe for free enterprise and free expression”, said the incentive was “discriminatory, arbitrary, and inconsistent with Australia’s trade commitments”.
“It punishes companies that have engaged constructively with Australian news publishers, creates unprecedented investment risk, and will fail to address the underlying challenges facing the news industry,” the group’s submission, filed last Thursday, said. “The proposal also establishes dangerous precedents for regulatory overreach and arbitrary taxation that will deter innovation and investment in Australia’s digital economy.”
Australian media groups cautiously optimistic
In Australia, several media lobby groups have welcomed the incentive, although some also have reservations. The Local and Independent News Association, which represents more than 100 domestic news organisations, including Crikey, wrote in a submission filed last Thursday that the design of the incentive “risks exacerbating barriers to entry and to competition”, impacting independent publishers.
“We strongly agree with the suggestion in the consultation paper that a tiered approach providing a greater deduction rate for deals with small news businesses is necessary in order to incentivise commercial bargaining with this part of the market,” the submission said. “It is likely that the cost to negotiate and administer deals with smaller companies will be more burdensome for the platforms in comparison to the benefit provided by the offset, and a tiered approach should reflect both this and the necessity of engaging with small and independent publishers.”
Bridget Fair, the chief executive of the free-to-air TV network lobby group FreeTV, said in a media release last month that the consultation would be an opportunity to “ensure this scheme delivers real support for the trusted news services Australians rely on every day”.
“Local journalism is essential to our democracy. When platforms walk away from paying for news, Australian communities lose,” Fair said.
The journalists’ union, the Media, Entertainment and Arts Alliance, said in a media release that the incentive should be implemented with “greater transparency and better assurances that any revenue that is raised … is invested back into journalism”.
Former Australian Competition and Consumer Commission chair Rod Sims also weighed in. Sims, the architect of the News Media Bargaining Code, made his views on the incentive clear in an opinion piece published by Guardian Australia yesterday. According to Sims, the movement on the new incentive “is welcome, but it has taken too long to get to this point, the envisaged scheme is complex and it risks favouring the big tech companies”, he wrote.
He proposed several ways to make sure the aims of the incentive would be met, including making the scheme operational by early next year. Alternatively, Sims suggested, the existing bargaining code could be tweaked to make sure it covers platforms, search engines and AI companies, even if they don’t carry news.
“Whatever option is chosen, getting this right is urgent — and vital if we value public interest journalism,” Sims wrote.
- This story first appeared on Crikey. You can read the original here.
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