Tech companies who refuse to strike deals with Australian publishers will be made to pay as the government plays "four-dimensional chess" and forces the industry to fund news.
The federal government will introduce a news bargaining incentive to force big tech companies that record more than AU$250 million (NZ$276.2 million) in Australian-based revenue to pay the Commonwealth or enter deals with publications, regardless of whether they carry news.
The charge from January will impact Google, TikTok owner Bytedance and Facebook and Instagram's parent company Meta.
X, formerly Twitter, is unlikely to be subjected to the incentive because its Australian-sourced revenue is less than AU$250 million (NZ$276.2 million).
The charge was not designed to drum up revenue for the Commonwealth but to encourage companies to strike deals with news publishers, Communications Minister Michelle Rowland and Assistant Treasurer Stephen Jones said.
"Michelle and I have been playing four-dimensional chess on this for 12 months," Jones told reporters in Sydney.
"We want to ensure that platforms involved and all news outlets can get on with doing deals and producing great journalism."
Meta revealed in March it would not renew deals struck with Australian publishers, which could cost the industry AU$70 million (NZ$77.3 million).
As negotiations with the government came to a standstill, representatives said the company would consider banning all Australian news content from Facebook if it was forced to work with the news media bargaining code.
Despite the threat, Jones believed most platforms would work with the incentive.
"It wouldn't be an economically rational decision to pay more under charge than you would need to pay under a commercial agreement," he said.
"There's benefit to both sides in entering into commercial agreements, and they'll provide far more detail, far more each way in exchange of value than they would under a charge arrangement."
Social media platforms once filled their feeds with news content to attract sign-ups and engagement, which pulled eyes and revenue from the source websites.
In an attempt to bring money back to the publishers, the previous Liberal government established a world-first news media bargaining code where digital platforms were legally required to negotiate commercial deals with eligible media outlets or face fines of up to 10% of their local revenue.
Now its user bases have grown, social media platforms have begun stifling news content and choking traffic to publications.
Instagram users must explicitly opt in to "political" content, Facebook has sunsetted its news tab and X has stopped showing news headlines and links on posts.
News Corp Australasia executive Michael Miller welcomed the incentive and said he would contact Meta and TikTok over commercial agreements.
"This will provide a foundation for rebuilding the media industry after the loss of an estimated 1000 jobs this year and ensuring Australian news media businesses will continue to deliver inquiring and professional journalism," he said in a statement.
Meta, on the other hand, held some reservations.
"We agree with the government that the current law is flawed and continue to have concerns about charging one industry to subsidise another," a Meta spokesperson said.
"The proposal fails to account for the realities of how our platforms work, specifically that most people don't come to our platforms for news content and that news publishers voluntarily choose to post content on our platforms because they receive value from doing so."
