Australian lawmakers are considering a new scheme to regulate and to extract revenue from American technology. If enacted, it would impose a 2.25% levy on the Australian revenues of three major platforms unless they strike commercial deals with local news publishers, with the rate falling to as low as 1.5% if enough agreements are reached.
The government projects the policy will generate $144 million to $179 million. It follows the 2021 enactment of the “news media bargaining code,” which sought to compel such agreements. Australian authorities now say the measure’s results have proven unsatisfactory to the nation’s politicos. Meta, for one, barred news links from Facebook two years ago in protest.
So, more regulatory weight is to be placed on American tech — never mind the costs to consumers or innovation.
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The discussion of Australia’s proposal suffers from severe linguistic confusion. “The draft News Bargaining Incentive, now available for consultation, seeks to plug a gap in existing rules that enable digital platforms to ‘avoid their obligations,’ prime minister Anthony Albanese said in a statement,” the Independent reports. Alternatively, the proposed levy often goes in the media under the label of a “tax.” A rectification of the names is in order.
It is not simply an “incentive,” nor simply a “tax” intended to extract revenue. Australia’s new rules would say to Meta, Google, and TikTok: “Comply, or else forfeit your revenue.” The object is to enforce politically favored business arrangements. The platforms own the digital infrastructure on which users — whether individuals or commercial entities — share content. Presumptively, in any legal-economic order founded on robust property rights, contractual terms of use are left to be determined by private parties, not dictated by the state.
Of course, media benefit from their access to platforms that disseminate news stories widely, expanding their audience. As Meta has noted, news outlets “voluntarily post content on our platforms because they receive value from doing so.” Technological development brings with it evolving consumer preferences and habits.
The news industry, like many others, seeks to straddle the digital revolution: it existed before, and it must alter its operations to flourish in the time following the emergence and proliferation of screens, search engines, and social media. “A government-mandated transfer of wealth from one industry to another, with no connection to the value exchanged, will not deliver a sustainable or innovative news sector,” Meta stated. It seems sensible to some in legacy industries — and to their self-appointed guardians in government — to intervene to regulate contracts and distribute privileges. As Deirdre Nanson McCloskey has written, “Sleeping while collecting rents is so much more pleasant than striving.”
U.S. tech markets, free from the impositions of crushing taxation and regulatory micromanagement, have grown in the last few decades to become the most advanced in the world. Alphabet (Google’s parent), Amazon, Apple, Meta, and Microsoft are all native to the United States. Their products, the fruits of economic liberty, are in the pockets of consumers and on the desks of office buildings the world over, including in jurisdictions whose regulatory strictures have rendered home-grown innovation impossible. Not just the Australians, but the Europeans have become habituated to policing U.S. digital services and devices in an overbearing fashion, subjecting the innovative creations of the 21st century to a regulatory regime that, had it prevailed in the states, would have prevented them from being engineered in the first place.
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President Donald Trump has no use for foreign impositions on American technologists — whether enacted in the European Union, the United Kingdom, or any other jurisdiction. Australia deserves no special accommodation.
As difficulties are often easier to prevent than to remedy, the White House should make clear to Australian lawmakers that further encroachments against the U.S. technology sector will not be brooked. Technology markets are global, and Washington, D.C., must look overseas to ensure American companies remain free.
David B. McGarry is the research director of the Taxpayers Protection Alliance.