Australia – Introduction of Digital Services Tax to Protect Traditional Media Outlets

In 2021, the then-Coalition government adopted a News Media Bargaining Code. This Code introduced an obligation for social media digital platforms(like Meta and Google) to sign agreements with Australian media companies, by which the social media giants are obliged to pay X amount of money to local, traditional media companies for making the usage of their content.

 If the social media platform operators choose not to pursue this path, they could be held liable and most probably will be fined. The fine is calculated based on their revenue from Australian customers and is fixed at 10% of the revenue. 

One of the principal reasons why the Government introduced this levy for social media platforms is to protect traditional media outlets from being marginalized under the “pressure” from multi-billion dollar social media powerhouses. 

However, last March, Meta representatives decided to withdraw from the signed agreement with the Australian government, which implicitly means that the part of their country-based revenue reserved for Australian-based media businesses will be used differently. 

Impact on the Social Media Space 

Digital Services Tax 

We are all aware, to some extent, of the level of influence that social media platforms have on shaping our daily lives. Thanks to the rapid evolution of technology, their impact is becoming increasingly present in all interconnected business sectors. 

The influence of social media platforms on traditional media businesses, independent journalists, and small or medium-sized businesses in Australia is of great importance. This is one of the driving reasons for the Member of the Green’s party approach to strengthening the regulatory framework on the designated social media platforms. 

The representatives of the Green party have addressed this temporary setback(after Meta decided to withdraw from the Bargaining Deal) by looking for alternative routes to obtain part of the revenue these media giants are earning from their sales to customers residing in Australia. 

One of the proposals is the introduction of the Digital Services Tax, an income tax on the global revenue that transnational social media platforms are making. The idea is to use these funds to finance the establishment of country-wide institutions that will monitor the social media space and, from the other side, to use those funds to help local media outlets obtain reimbursement for their journalistic work, at least to some extent. 

Currently, the introduction of the Digital Services Tax on social media platforms like Google, Meta, and Co. is just an idea, a proposal from one side of the Parliament. The proposal is based on the adopted model that countries like France, Canada, and the UK have introduced.  

It remains to be seen whether Australia will pursue the path these countries took, i.e., the introduction of DST on social media platforms. However, the Government will look to one or more ways to protect traditional media companies and find a mutually beneficial relationship between international social media platforms and local media businesses.