Today we are sharing our formal submission on the News Bargaining Incentive draft legislation. Our position is clear: this law is poorly designed, grossly unfair, and will fail to deliver a diverse and sustainable news industry.
The evidence doesn’t support the premise
The government’s case rests on the idea that digital platforms extract value from news publishers without fair return. The evidence tells a different story. News organisations voluntarily share content — free of charge — on Meta’s platforms because they derive real commercial benefits: referral traffic, audience growth, and subsequent advertising revenue they retain in full. Indeed, a 2023 NERA Economic Consulting study confirmed publishers receive “considerable economic benefits” from their presence on Facebook.
Before we ended Facebook News in Australia in April 2024, daily active users of the product had already dropped over 80 percent, a clear signal of where audience preferences had shifted. People come to our platforms for connection, entertainment, and creator content, not to click on news articles.
In Canada, after Meta ended the availability of news on Facebook following the passage of the Online News Act, daily and monthly active users on Facebook increased, and time spent on the platform continued to grow. Independent analysis by Reuters confirmed the same.
A funding mechanism premised on correcting an imbalance that doesn’t exist will produce distorted outcomes for everyone, including journalists.
Dependency is not a plan for journalism
A sustainable news ecosystem requires publishers to innovate and adapt to changing consumer behaviour. The NBI does the opposite: it insulates publishers from the competitive pressure to evolve by guaranteeing revenue regardless of whether they build sustainable business models. This entrenches dependency at the very moment when adaptation matters most.
The very name “NBI” is a misnomer. There is no commercial “incentive,” only a government-imposed charge with no rational connection to the value platforms provide.
The mechanism is irrational and discriminatory
The NBI applies a 2.25 percent charge on each targeted platform’s widest possible revenue base, even broader than existing digital services taxes enacted by some governments, which resulted in the United States initiating trade actions. Not only does this revenue base lack direct connection to news publishing, it also captures innovations that Meta is bringing to the Australian market; products that have no relation whatsoever to news content.
The case for extracting revenue from social media services — where publishers voluntarily share news — is not supported by the evidence. Extending that logic to VR headsets and smart glasses is indefensible.
The NBI is really a digital services tax. It is applied on gross revenues, not profits. It is not deductible. It sits outside double taxation agreements. It applies only to three foreign companies, penalising them for bringing new products and technologies to Australia while giving competitor services a free pass. This market distortion leads to less competition and worse outcomes for consumers.
Call it what it is: a discriminatory, retroactive tax targeting a handful of foreign companies while competitors offering comparable services face no equivalent obligation. It plainly violates the commitments Australia and the United States made in their bilateral Free Trade Agreement, which commits Australia to grant American companies “treatment no less favourable” than Australian peers in cross border services, investments, and digital products. In all three instances, this is clearly not the case when it comes to the NBI.
A law built on assumptions the market has already disproven
The policy rests on a 2019 ACCC inquiry that concluded Google and Meta were unavoidable trading partners in a hypothetical “news referral market.” While the rationale was flawed then, it’s now obsolete because the news distribution and discovery landscape has fundamentally transformed.
First, consumer behaviour has shifted to short-form video. TikTok has nearly two billion users and YouTube Shorts generates 200 billion daily views. The same shift has happened on our own platforms. Reels generates 140 billion daily views across Meta’s services, and video now represents over 60 percent of time spent on Facebook and Instagram. People come to our platforms for creator-driven content, not news.
Furthermore, generative AI has created entirely new pathways for people to consume information. The NBI’s own legislation implicitly acknowledges this shift by excluding companies that provide search services that solely or primarily use large language models yet the NBI policy rationale continues to rest on assumptions about market structure that predate these services entirely. This creates an uneven playing field, distorting incentives to innovate, and ultimately leading to less competition and worse outcomes for consumers.
Our position
This is not a plan to save journalism. It is a tax on innovation dressed up as media policy.
We are vehemently opposed to this legislation. It is discriminatory, economically incoherent, and will not deliver the sustainable news sector that Australian journalists and audiences deserve. We encourage any government considering a similar approach to look carefully at what this model actually represents. A strong, independent media cannot be built on punitive taxes, levied on foreign companies, with no connection to the value exchanged.
Meta’s full submission on the News Bargaining Incentive draft legislation is available here.
