Meta has accused Australia of breaching its free trade agreement with the United States after Canberra proposed a new tax on major technology companies that fail to strike licensing deals with local media organisations.
The company, which owns Facebook and Instagram, said the planned levy would be “indefensible” and argued that it went beyond previous digital services taxes that had already triggered trade tensions with Washington.
Meta said the proposal to tax 2.25% of all Australian revenue for certain platforms amounted to a violation of commitments under the US-Australia Free Trade Agreement.
The company argued that the measure failed to provide equal treatment for American firms compared with domestic businesses.
“The tax 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,” Meta said in a blog post.
It further warned that the policy could escalate into wider trade action, noting that similar digital taxes in other countries had previously led to responses from the United States government.
“We encourage any government considering a similar approach to look carefully at what this model actually represents,” the company added.
The dispute centred on Australia’s “news bargaining incentive,” a policy aimed at ensuring that digital platforms contribute financially to local journalism by sharing revenue or paying compensation.
Australia’s government said the proposal remained under consideration and that any revenue generated would be redirected to support the domestic news industry.
A spokesperson for Assistant Treasurer Daniel Mulino said the government remained committed to the reform despite industry opposition.
The policy has been a point of friction between Meta and Australia since 2021, when Canberra introduced legislation requiring platforms to negotiate payments with media organisations or face arbitration.
Meta briefly restricted news access in Australia in response to the law but later reached agreements with several major publishers before withdrawing from news payments in 2024.
Google and TikTok have also been affected by the evolving regulatory framework, with some companies criticising the tax-based approach as unfair and overly broad.
Erizia Rubyjeana
