Six members of Congress signed a letter on September 1st urging U.S. Trade Representative Jamieson Greer to open a formal investigation into Australia's News Bargaining Incentive, a newly enacted law that targets digital platforms. According to a letter released by Americans for Tax Reform, the lawmakers are calling for action under Section 301 of the Trade Act of 1974, which applies when foreign governments discriminate against or unduly burden U.S. commerce. The group argues the Australian law amounts to government-mandated extortion of American tech companies.
The Australian law requires digital platforms that earn $250 million or more in gross revenue from the Australian market to negotiate payment deals with at least eight news publishers for hosting Australian news content on their platforms. Companies that refuse face a penalty of 2.75% of their Australian advertising revenue. The report notes the $250 million threshold is arbitrary, with the Australian government providing no evidence or data showing where this figure comes from. Representatives Carol D. Miller, Beth Van Duyne, Aaron Bean, Rudy Yakym III, Randy Feenstra, Claudia Tenney, Scott Fitzgerald, and Darin LaHood signed the letter. According to the Parliamentary Budget Office forecast cited in the letter, Australia's gross national debt is projected to hit $2 trillion by 2030.
Grover Norquist, President of Americans for Tax Reform, said Australia has found "a new way to tax American success." The letter argues that while the Australian government calls the policy an incentive, a payment a company must make if it refuses to enter into government-preferred commercial arrangements is effectively a tax or penalty, regardless of what officials choose to name it. The report contends that Prime Minister Anthony Albanese and his government present this policy as protecting struggling publications, yet many smaller outlets are excluded from negotiations and receive only a tiny fraction of revenue from the incentive.
The letter explains the law misunderstands the relationship between Australian news publishers and digital platforms. News publishers voluntarily choose to use social media platforms like Instagram and YouTube to promote their content, and many have already entered into voluntary commercial agreements with companies like Meta and Google. By contrast, the Australian government is forcing digital platforms to negotiate with large media conglomerates or face millions of dollars in penalties, even if they don't host any news content. Andreas Hellmann, Director of Outreach, Tax, and Regulatory Policy at the Tholos Foundation, stated that more countries view tech companies as a piggy bank, but this doesn't justify breaking them open. The letter argues that even if Australia succeeds in distributing proceeds broadly among smaller outlets, it doesn't explain why U.S. digital platforms should be compelled to finance Australian domestic journalism in the first place.
Americans for Tax Reform applauds the eight representatives for working to prevent American companies from being extorted by an ally. Rather than cutting spending to achieve fiscal stability, Australia is targeting digital platforms to extract as much revenue as possible. If Australia continues violating bilateral agreements, the United States should respond accordingly.