What Parliament actually passed
On 20 August 2026 Australia's parliament passed the News Bargaining Incentive, according to SBS News. Platforms with a significant search or social media service and more than A$250 million in local advertising revenue face a 2.5% charge on that revenue. SBS and The Next Web both name Meta, Google, TikTok and LinkedIn as the covered services.
A platform can reduce or eliminate the charge by signing commercial deals with news publishers. Both outlets report that deals with large publishers count at 150% of their value and deals with small and medium outlets at 200%. No single deal can offset more than 25% of a platform's liability, and SBS reports the incentive is built around deals with at least eight different publishers. Revenue that is not offset goes to a distribution scheme. The Next Web reports it favours smaller and regional outlets, with a separate grant layer for startups.
This is a tougher law than the one first floated. The April 2026 exposure draft, announced in a Treasury ministerial release on 28 April, proposed a charge of 2.25% of all Australian revenue. The final version narrows the base to advertising revenue but raises the rate to 2.5%.
The strongest case for the law
The government's argument deserves a fair hearing. The 2021 News Media Bargaining Code worked only for platforms that chose to remain designated, and Meta showed that a platform could escape it by removing news from its service. The government's stated aim, in the Prime Minister's consultation release, was to close that loophole. Platforms that decline commercial deals pay a charge, and the money returns to the news sector. Newsroom economics have deteriorated while platforms capture most digital advertising. A public interest in local journalism is a legitimate reason to ask whether the largest intermediaries should contribute.
Why this still fails the proportionality test
The mechanism has three problems, and the third is the most serious.
- It is a levy on revenue, not on news. The charge applies whether or not a platform hosts or links to a single news story. A platform that has exited news entirely, as Meta did, owes the same 2.5% as one that carries it. The law punishes the absence of a payment relationship rather than any harm from news use.
- It is a tax in everything but label. Platforms called it a digital services tax, and the structure supports that description. It is a percentage of revenue, imposed on large foreign firms, with an escape hatch that routes money to a favoured sector. Governments have long argued about whether such measures are discriminatory, and the argument now falls to Australia to answer.
- The offsets create a bargaining market under duress. When the alternative to a deal is a fixed tax bill, the platform has little reason to haggle over price. Publishers have every reason to ask for as much as the offset allows. The 25% cap per deal and the 200% multiplier for small outlets steer the money toward particular recipients, which risks substituting a policy preference for market pricing of what news is actually worth.
There is also an expressive-freedom cost that the debate has largely skipped. A scheme that rewards platforms for signing deals with approved publishers gives those platforms a financial reason to favour them in distribution. That is a quiet thumb on the scale of what Australians see, and the law has no transparency obligation to match. The Next Web also notes that AI companies, which train on and summarise journalism, are left outside the scheme, so it taxes the 2010s intermediaries and ignores the platforms most likely to reshape news consumption next.
The trade exposure is real
Meta argued in June, as The Next Web reported, that the proposal "plainly violates" the Australia-US free trade agreement's commitment to treatment no less favourable than Australian peers. It also warned that the design was broader than digital services taxes that led Washington to start trade actions elsewhere. The final law covers less revenue than the draft did, but it still applies only to a small group of mostly American firms. It also applies to LinkedIn, whose parent is Microsoft, so the pool of US companies with an interest in the dispute has widened. The Next Web reports the complaint remains unresolved. Australia should expect it to resurface when the first charge assessments arrive.
There is also a practical consequence for Australian readers. If a platform concludes that the cost of staying exceeds the benefit, it can reduce its Australian news presence, and the 2021 episode showed that this is a credible response. Offsets reward deals, but they cannot force a platform to keep carrying content the law claims to protect.
A narrower alternative
If the aim is a sustainable local news sector, the proportionate route is to fund it directly and transparently. Options include public-interest journalism grants, tax treatment of donations and subscriptions, and a tightened code that applies to platforms based on actual use of publisher content. A sector-specific levy that adds trade risk and rewards non-carriage as readily as carriage is the more expensive path. Where a revenue-based mechanism is used, it should come with clear sunset and review clauses, published data on where the money goes, and a rule that distribution to publishers must not depend on editorial treatment by platforms.
Australia's lawmakers were right to worry about the funding of journalism. They were wrong to answer with a charge that looks, to trade partners and to the affected firms, like the very thing it denies being.