U.S. Representatives Call for Action Against Australia’s News Bargaining Incentive

On September 1^st, six members of Congress signed onto a letter calling on United States Trade Representative Jamieson Greer to invoke Section 301 of the Trade Act of 1974 to launch an investigation into Australia’s recently passed News Bargaining Incentive (NBI). If Australia is keen on violating bilateral agreements, the United States ought to respond. 

As Grover Norquist, President of Americans for Tax Reform, put it so clearly, Australia has found “a new way to tax American success.” This law requires digital platforms earning $250 million in gross revenue from operating in Australia’s market to negotiate with at least eight news publishers for certain payment arrangements for “hosting Australian news content” on their sites. Failure to do so would result in a 2.75% fine based on the platform’s Australian advertising revenue. 

This law misreads the dynamics between Australian news publishers and digital platforms. When a news publisher uses a social media platform, they do so of their own volition. Meta, LinkedIn, and/or Alphabet are not forcing them to post on Instagram or YouTube, and Australian news publishers are free to advertise and promote their content through alternative means. Many of these companies, which have chosen to engage with digital platforms, have also entered into voluntary commercial agreements with companies like Meta and Google. 

By contrast, Canberra is forcing digital platforms that can successfully operate in Australia to be shaken down by large media conglomerates in uneven negotiations. If an Australian news publisher does not want to use a social media platform, it is free to do so without much punishment inflicted. If a digital platform does not want to engage in government-mandated extortion, it is forced to pony up potentially millions of dollars, even if it does not host any news content. Prime Minister of Australia Anthony Albanese and his government cloak this squeeze in the guise of fighting for the struggling publication, but many of these companies are left out of the negotiation room and receive only a mere morsel of revenue from this incentive. The NBI is just a way for the Australian government to extort successful American companies on the backs of struggling outlets.

The NBI falls squarely within actions warranting a Section 301 investigation. This applies when foreign governments act in ways that are discriminatory or unduly burden the United States commerce. The Australian government characterizes the NBI as an incentive. However, a payment a company is required to make if it refuses to enter into commercial arrangements preferred by the government is, in effect, a tax or penalty, regardless of what the government chooses to call it. The letter makes clear that the tax’s $250 million threshold is arbitrary and disproportionately impacts US firms compared with other foreign and domestic firms. The Australian government has not provided evidence or data showing where the $250 million threshold comes from. Is a firm that only makes $249,999,999.99 from the Australian market not grossly benefiting from Australian news publishers? Why do they not have to go through this coercive bargaining process? 

Supporters of the NBI argue that the policy protects small regional new organizations that might otherwise struggle to survive. Even if the Australian government succeeds in distributing the proceeds more broadly among these outlets, it does not explain why U.S. digital platforms should be compelled to finance Australian domestic journalism in the first place. It is clear why Australia has been pushing the NBI. The Parliamentary Budget Office forecasted that Australia’s gross national debt would reach $2 trillion by 2030. Rather than working to reduce spending and chart the country onto fiscal stability, Australia would rather squeeze digital platforms for every dollar it can get away with. As Andreas Hellmann, Director of Outreach, Tax, and Regulatory Policy at the Tholos Foundation, stated, “More and more countries see them [tech companies] as a piggy bank,” but this is not an excuse to crack them open. Americans for Tax Reform applauds the actions of Representatives Carol D. Miller, Beth Van Duyne, Aaron Bean, Rudy Yakym III, Randy Feenstra, Claudia Tenney, Scott Fitzgerald, and Darin LaHood for working to help make sure American companies do not get extorted by our ally. 

Read the full letter here.