Meta has criticized an Australian proposal to impose a new tax on social media platforms for using news content to fund media outlets, calling the move “grossly unfair.”

“Our position is clear: this law is poorly designed, grossly unfair, and will fail to deliver a diverse and sustainable news industry,” said Meta, the $1.6 trillion parent company of Facebook, Instagram, and WhatsApp.

The reaction followed Australia’s proposed News Bargaining Incentive (NBI), under which Canberra would impose a levy on Meta, Google, and TikTok. Revenue raised through the measure “would be distributed to local news organizations based on the number of journalists they employ,” according to the Australian Broadcasting Corporation (ABC).

Under the Labor government’s proposal, Meta would be required to strike agreements with local media organizations or face taxes of up to 2.25% of revenue generated in Australia, the first country to ban social media access for children aged 16 and under.

The tech giant argued that the legislation “will leave Australian journalism dependent on a government-administered subsidy regime while doing little to help smaller publishers and independent journalists.”

“Our position is clear: this law is poorly designed, grossly unfair, and will fail to deliver a diverse and sustainable news industry,” Meta said in its formal response to Canberra.

Earlier in 2024, Meta withdrew from a 2021 agreement and ended Facebook News services in Australia.

Meta also argued that the NBI “violates the commitments Australia and the United States made in their bilateral Free Trade Agreement.”

It is a “discriminatory, retroactive tax targeting a handful of foreign companies while competitors offering comparable services face no equivalent obligation,” the company said, noting that firms such as Microsoft, Snapchat, and OpenAI are reportedly excluded.

 NBI a ‘critical step’ to ‘secure’ future of Australian news

Australian Communications Minister Anika Wells, however, defended the draft legislation, saying it was “only fair.”

“We believe it’s only fair that large digital platforms contribute to the hard work of journalism that enriches their feeds and that drives their revenue,” she said.

Australian media organizations have welcomed the NBI as a “critical step” toward securing the future of Australian news.

“If digital platforms fail to pay for the use of the news content from which they profit, then journalism becomes unsustainable,” said a statement issued by a broad coalition of news organizations, including the ABC.