Meta Challenges Australia’s Proposed Tech Tax, Citing U.S. Trade Agreement Concerns

Meta has intensified its opposition to Australia’s proposed tax on major technology companies, arguing that the measure could violate the Australia-United States Free Trade Agreement and create new tensions between the longtime allies.

The Facebook and Instagram parent company criticized a government proposal that would impose a 2.25% levy on the Australian revenue of large digital platforms that do not reach licensing agreements with local news publishers. According to Meta, the tax would apply to all revenue generated in Australia, including income unrelated to social media services, making the policy overly broad and unfair.

In a statement released Thursday, Meta said the proposal discriminates against U.S.-based companies and conflicts with trade commitments requiring equal treatment of American and Australian businesses. The company also warned that the tax goes beyond digital services taxes introduced in other countries, some of which have already triggered responses from U.S. trade authorities.

Australia’s government, however, remains committed to the initiative. A spokesperson for Assistant Treasurer Daniel Mulino said any funds collected through the tax would be redirected to support the domestic news industry. The proposal, known as the “news bargaining incentive,” is currently under review as the government evaluates industry feedback.

The dispute stems from Australia’s landmark 2021 media bargaining law, which required tech platforms to negotiate payment agreements with news organizations or face government arbitration. At the time, Meta temporarily blocked news content on its platforms in Australia before ultimately signing deals with major publishers.

In 2024, Meta announced it would no longer pay for news content, prompting Australian lawmakers to explore alternative methods of supporting journalism. The new proposal would expand coverage beyond Meta and Google to include TikTok, increasing pressure on major technology firms operating in the country.

The debate has gained international attention amid growing scrutiny of U.S.-based tech companies. Under the Trump administration, Australia’s efforts to regulate digital platforms have become a focal point in broader discussions surrounding trade, technology regulation, media funding, and online content governance.

As Australia moves forward with its review, the outcome could influence future global policies on digital platform regulation, news publisher compensation, and international trade relations involving major technology companies.