The Australian government is set to launch a revenue grab on tech titans Alphabet (GOOGL) and Meta Platforms (META) unless they strike compensation agreements with domestic news publishers and protect a healthy democracy.
Claim 55% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
Domestic News Distribution
Australian Prime Minister Anthony Albanese said that tech companies could be hit with a 2.25% revenue charge if they don’t agree to pay local media outlets for news distributed on Facebook, Google and TikTok.
A new draft legislation specifically targets digital platforms exceeding thresholds of 10 million search users or 5 million social media users.
The levy would apply to companies generating more than $180 million in local revenue. Companies would reduce their liability by paying local media organizations for news content.
“Investment in journalism is critical to a healthy democracy. It matters. It’s something that defines the way that Australian society operates,” Albanese said.
Google Rejects Tax
Google said it already supports Australian journalism through existing licensing agreements. “While we are currently reviewing the draft legislation, we have been clear: we reject the need for this tax,” Google said in a statement. Meta called the latest proposal a digital-services tax.
It is understood that the two U.S. firms and China’s ByteDance, which owns TikTok, have been consulted on the proposals.
It adds to the international pressure on U.S. tech firms in Australia, Europe and the U.K. as governments and authorities look to clamp down on their technological dominance and try to promote domestic rivals.
Last week President Trump has threatened to impose “a big tariff” on the U.K. if it did not ditch its digital services tax, which imposes a 2% revenue levy on U.S. social media companies.
They have also been hit in Australia by a social media ban for those aged under 16 years of age to protect them from harm including upsetting sexual and violent images.
Both Meta and Alphabet release Q1 earnings reports tomorrow, April 29.
What are the Best Social Media Stocks to Buy Now?
We have rounded up the best social media stocks to buy now using our TipRanks comparison tool. As can be seen below, Spotify (SPOT) has the best upside of 43%.
