In December 2024, the Australian government announced a News Bargaining Incentive — a financial charge on large digital platforms that do not enter qualifying commercial agreements with Australian news publishers. The move was a direct response to Meta's decision earlier that year not to renew the deals it had struck under the 2021 News Media Bargaining Code. Treasury has been consulting through 2025 on designation thresholds and offset mechanics. In parallel, it is also consulting on an ex-ante digital competition regime modelled in part on the EU's Digital Markets Act (DMA).
Together, these two tracks would give Australia one of the most interventionist platform-regulation stacks outside the European Union. That ambition deserves scrutiny. Australia's digital economy is real but small — roughly 26 million people — and the cost of getting the design wrong falls disproportionately on Australian users, advertisers and small businesses, not on the platforms the rules are aimed at.
What the Incentive actually does
The original News Media Bargaining Code, enforced by the Australian Competition and Consumer Commission (ACCC), worked as a backstop: if a designated platform could not reach a deal with a publisher, a final-offer arbitration kicked in. The threat of designation was enough to push Google and Meta into commercial agreements worth hundreds of millions of Australian dollars over several years. When Meta declined to renew, the Treasurer concluded the threat had lost its bite.
The Incentive replaces that threat with a tax-like charge. Platforms above a revenue threshold either sign qualifying agreements with news businesses — and offset the charge against payments made — or pay the levy directly to the Commonwealth. Treasury has described the mechanism as designation-neutral: the charge applies to qualifying platforms regardless of whether they carry news at all.
That last point is the rub. Meta has publicly stated that news is a small and shrinking part of user engagement on its services. Forcing payment for content the platform would rather de-emphasise — or remove entirely, as Meta did across Canada in response to the Online News Act — does not create a sustainable funding model for journalism. It creates a one-off transfer that ends the moment platforms decide the Australian market is not worth the friction.
The Canadian warning
Canada's experience is the most relevant cautionary tale. After the Online News Act (Bill C-18) passed in 2023, Meta blocked news links across Facebook and Instagram in Canada rather than enter mandated negotiations. Independent research has documented a substantial drop in news referral traffic to Canadian publishers since, with smaller and local outlets reportedly bearing the worst of it. The law intended to subsidise journalism appears to have made the distribution problem worse for many of the publishers it was supposed to help.
Australia's Incentive is designed to be harder to escape — the charge applies even if a platform pulls news links. But that creates a different problem: it looks less like a bargaining mechanism and more like a sectoral tax dressed up in competition-policy clothing. If the goal is to fund public-interest journalism, an explicit, transparent levy debated as fiscal policy would be more honest, more proportionate, and less likely to distort how platforms treat news.
The DMA-clone problem
The parallel ex-ante competition consultation raises its own concerns. The EU Digital Markets Act, in force since 2023, designates a closed list of gatekeepers and imposes prescriptive do's-and-don'ts on core platform services. Two years in, the costs are clearer than the benefits: significant compliance burdens for designated companies, feature degradations for European users (delayed product launches, removed integrations, friction in messaging and maps), and a steady stream of Commission investigations whose remedies remain contested.
Copy-pasting that framework into a country a fraction of the size of the EU single market would be a serious mistake. The EU at least has the market power to make gatekeepers internalise compliance costs without exiting. Australia does not. A poorly calibrated regime risks the same kind of withdrawals, delays and quality reductions Europeans have seen — except Australians will not get the same prioritisation from global product teams.
A better path
None of this is to argue Australia should do nothing. The ACCC's Digital Platforms Inquiry identified real harms — opaque ad-tech intermediation, self-preferencing in search, weak dispute resolution for small advertisers. Targeted, evidence-based interventions on those specific conduct issues are defensible and overdue.
But the current direction conflates three different policy goals — funding journalism, disciplining gatekeeper conduct, and signalling regulatory ambition — into a single sprawling agenda. A more disciplined approach would:
- Separate journalism funding from competition policy. If Parliament wants to subsidise news, do so directly through a transparent fund, not by laundering it through a charge on platforms that may not even host news.
- Apply ex-ante rules only where ex-post enforcement has demonstrably failed, and only to the specific conduct documented in ACCC inquiries.
- Build proportionality in from the start — thresholds that reflect the Australian market, sunset clauses, and meaningful interoperability with overseas regimes so designated firms are not forced to maintain divergent product stacks for a market of 26 million.
The risk of the current trajectory is not that the platforms suffer. They will adapt, lobby, or withdraw. The risk is that Australian users, small businesses and innovators end up paying for a regulatory experiment whose benefits accrue mostly to a handful of legacy publishers and a Treasury looking for revenue.