Labor shifts News Bargaining Initiative after media backlash

The federal government has made another late overhaul of its News Bargaining Incentive, giving major publishers scope to strike larger deals with technology platforms after the media industry warned its previous model could cost journalism jobs.

READ MORE: Commercial Radio & Audio claims reform win in tech giant battle

READ MORE: We asked a lawyer to break down what the News Bargaining Incentive really means

Prime Minister Anthony Albanese has also reached an agreement with Opposition Leader Angus Taylor to secure support for the legislation, which is being introduced to parliament on Thursday.

The changes increase the number of news organisations platforms must deal with while also reversing a proposed restriction on how much any single publisher agreement can be worth.

Publishers win bigger deal cap

Under the News Bargaining Incentive, major digital platforms including Meta, Google and TikTok will face a charge equal to 2.5 per cent of their Australian digital advertising revenue unless they strike commercial agreements with eligible news publishers.

The value of those agreements can be used to offset the charge, creating an incentive for platforms to negotiate directly with media companies rather than pay the government.

As first reported by the Australian Financial Review, the government will now allow a single publisher deal to account for as much as 25 per cent of a platform’s levy liability. That is up from the 16 per cent cap proposed earlier this month.

Platforms will also need to strike agreements with at least eight separate media organisations to fully offset their liability, up from six under the previous proposal.

The higher individual cap gives larger publishers including Nine Entertainment, News Corp and the ABC greater room to negotiate deals reflecting their scale, while the eight-deal requirement is designed to ensure smaller publishers also receive funding.

Reuters reports that 5 per cent of money raised through the scheme will also be directed to Australian Associated Press, recognising the newswire’s role in public-interest journalism.

Media companies warned of journalism cuts

The last-minute changes follow criticism from major Australian publishers over the model announced by Minister for Communications Anika Wells and Assistant Treasurer and Minister for Financial Services Daniel Mulino earlier this month.

Nine Entertainment and News Corp had warned the proposed settings could reduce payments flowing to larger newsrooms and put journalism jobs at risk.

The Financial Review reported industry estimates suggesting some of the country's largest media groups could have seen their existing deal values fall by as much as 40 per cent under the earlier settings.

The government has also shortened the period used to calculate the levy base from three years of digital advertising revenue to two, according to the Financial Review. The change is expected to increase the amount platforms could ultimately be required to pay.

Pressure shifts back to big tech

The News Bargaining Incentive was developed after Meta declined to renew commercial agreements with Australian news publishers when deals struck under the existing News Media Bargaining Code expired.

The new regime also broadens the platforms captured by the system. Microsoft-owned LinkedIn is no longer excluded, alongside platforms including Meta, Google and TikTok.

Technology companies have strongly opposed the scheme, adding another point of friction between Canberra and global platforms as the government also implements its under-16 social media restrictions.

Mulino said the government wanted to strengthen the media industry across publishers of different sizes.

“A diverse, strong and sustainable media sector is an essential part of a robust democracy,” Mulino said.

The legislation marks the latest attempt by the government to keep commercial payments flowing from global technology platforms to Australian journalism, five years after the original News Media Bargaining Code reshaped negotiations between publishers and big tech.