The parent company of Facebook and Instagram has formally accused Australia of breaking its free trade agreement with the United States over a proposed tax targeting major technology platforms.
Meta claims Australia’s plan to impose a 2.25% tax on tech companies that refuse to strike payment deals with local news organizations violates international trade commitments and could spark diplomatic tensions between the allied nations.
The proposed levy would apply to all Australian revenue generated by these platforms, not just income tied to social media activities. Meta described this approach as “indefensible” in a blog post released Thursday.
“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,” the company stated.
Meta argued the tax structure goes beyond similar digital service taxes that have already prompted the U.S. government to consider trade retaliation against other countries.
“We encourage any government considering a similar approach to look carefully at what this model actually represents,” the company added.
Officials from Assistant Treasurer Dan Molino’s office, which would oversee the tax implementation, did not respond immediately to requests for comment.
The conflict over requiring social media platforms to compensate news publishers for content that generates user traffic has been ongoing since 2021. That year, Australia became the first nation to enact legislation forcing these companies to negotiate payment agreements or face government-imposed arbitration.
Following a brief period where Meta blocked all news content in Australia, the company eventually reached agreements with most major news outlets. However, in 2024, Meta announced it would cease making payments for news content. Rather than appointing an arbitrator, Australia’s government decided to implement the tax-based system instead.
The government also broadened the scope of affected companies, expanding from Meta and Google to include TikTok as well. While Google had previously negotiated deals under the original framework, the company has expressed opposition to the proposed tax structure.
Under the current administration, Australia’s efforts to regulate predominantly U.S.-based technology companies have become a source of tension. A congressional committee has requested that Australia’s internet regulator testify about what lawmakers characterize as restrictions on American free speech rights.
The regulator has not yet indicated whether she will comply with the request.
