Meta accuses Australia of breaching a Free Trade Agreement with the US by proposing a 2.25% tax on certain tech giants that do not engage in licensing deals with local media outlets. This move escalates a long-standing dispute between the two nations, which has been ongoing for over five years.
The proposed tax would apply to all revenue generated by these platforms, including non-social media related income. Meta argues this is “indefensible” and goes beyond actions that have previously prompted responses from the US government.
According to Meta’s blog post, the Australian tax “plainly violates the commitments Australia and the United States made in their bilateral Free Trade Agreement,” which requires Australia to provide American companies with ‘treatment no less favourable’ than Australian peers. The proposed tax is broader than existing digital services taxes enacted by some governments, leading to US trade actions.
Assistant Treasurer Daniel Mulino’s spokesperson stated that the government remains committed to the change and any revenue generated from the tax would be distributed back to the news media industry. This issue has been a point of contention between Australia and Meta since 2021 when Australia became the first country to pass legislation requiring these platforms to negotiate deals or face arbitration.
The current administration in the US, under Trump, has also raised concerns about Australia’s efforts to regulate mostly US-based tech firms, calling it a regime that could potentially infringe on American free speech. The internet regulator has yet to comment on whether she will agree to testify before a US congressional committee.