Meta has accused Australia of breaching its free trade agreement with the United States after Canberra proposed a new tax framework targeting major digital platforms that do not sign licensing deals with local news publishers. The Facebook and Instagram parent company said the proposal unfairly targets American technology firms and could trigger trade-related action from the United States, escalating tensions between global tech companies and governments over payments for news content.

Australia’s proposed policy would impose a 2.25% levy on the local revenue of large digital platforms that fail to reach commercial agreements with Australian media companies. The plan is aimed at encouraging firms such as Meta, Google and TikTok to financially support local journalism. Meta strongly opposed the proposal, calling it discriminatory and arguing that it may violate provisions under the Australia-United States Free Trade Agreement, which requires equal treatment for US businesses operating in Australia.

The dispute marks the latest chapter in a years-long clash between Australia and major tech platforms over the value of news content shared online. Australia was among the first countries to introduce laws forcing digital platforms to negotiate payments with publishers. In 2021, Meta briefly blocked news content on Facebook in Australia before later signing agreements with several media outlets.

Many of those agreements have since expired, prompting the Australian government to consider stronger measures to support the struggling news industry. Under the new proposal, platforms that avoid signing licensing deals could still be required to contribute financially through the levy system. Reports indicate the tax could apply to total Australian revenue generated by the companies, including revenue unrelated to news content.

Meta said the measure goes beyond previous digital taxes introduced in other countries and warned it could lead to broader trade consequences involving Washington. The debate comes as governments around the world increase pressure on large technology firms to compensate publishers for journalism distributed across social media and digital platforms.

Countries including Canada, France and the United Kingdom have also explored or introduced similar laws requiring tech companies to share revenue with news organizations. Australian officials have defended the proposal, saying it is intended to create a fairer digital marketplace and help sustain public-interest journalism as traditional media companies continue to lose advertising revenue to online platforms. The proposed law is expected to face intense scrutiny from both the technology sector and international trade groups in the coming months.

Disclaimer: This image is taken from Reuters.