Meta blames Australia of breaching FTA, invokes US ‘trade action’
Synopsis
Meta has accused Australia of breaching its free trade agreement with the United States through a proposed tax on major technology companies that do not sign payment deals with local news publishers. The Facebook and Instagram owner said the 2.25% levy would apply to all Australian revenue and described the measure as "indefensible". Meta also warned the proposal goes further than similar taxes that have previously triggered US trade action. The dispute is the latest development in a long-running battle over whether technology platforms should compensate news organisations for content shared on their services.
Meta accused Australia of breaking a free trade deal with the US in seeking to impose its planned tech tax against interest and backed warnings it could stoke renewed trade tensions.
Key Highlights
- In Australia, Meta says tech tax violates US-Australia Free Trade Agreement
- Under the proposal, it would tax select platforms 2.25% of their Australian earnings.
- It would direct revenue collected towards Australian news publishers.
- Meta warned the move could prompt trade action.
- NThe disagreement arises due to Australia's attempts to create platforms that pay for news content.
Meta Says Australia's Tax Plan Breaches Free Trade Deal
Meta says Australia may have broken its free trade agreement with the US by proposing a tax on major tech companies that do not make payment deals with local news publishers. The owner of Facebook and Instagram said the proposal would increase tensions in a dispute that has been ongoing for several years.
Under the proposal, affected companies could be charged 2.25% of all revenue earned in Australia, including income not connected to social media or news. Meta described the plan as "indefensible" and said it goes further than similar taxes introduced by other governments.
In a blog post published on Thursday, Meta said the tax clearly breaks the commitments Australia and the United States made in their bilateral Free Trade Agreement, which requires Australia to give American companies 'treatment no less favourable' than Australian competitors.
Meta also said the proposed tax was even broader than digital services taxes introduced by some governments that led the United States to take trade actions and added, We encourage any government considering a similar approach to closely examine what this model actually represents.
News Payment Dispute Continues
The dispute comes amid Australia's push to force technology companies, compensate new publishers for the content they share on their platform. Australia became the first country to require major platforms to either negotiate deals with the publishers or enter an arbitration by the state government in 2021.
After initially removing news from its platforms in Australia for a short time, Meta strikes deals with major media firms. However, the company stopped paying for news in 2024, and the Australian government proposed a new system to tax companies that do not pay publishers.
The proposal would apply to Meta, Google, and TikTok. A spokesperson for Assistant Treasurer Daniel Mulino said the government remains committed to the plan and that any money collected would be returned to Australia's news media industry.
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