Meta: Australia Breached Free Trade Deal

Meta Accuses Australia of FTA Breach Over Proposed Tech Tax

Meta Platforms Inc. on June 4 accused Australia of violating a free trade agreement with the United States by proposing a new tax on technology companies that do not secure licensing deals with local media.

The social media giant stated that Australia's draft legislation, which would impose a 2.25% tax on the total Australian revenue of platforms like Meta, Google, and TikTok, is "indefensible" and contravenes the U.S.-Australia Free Trade Agreement's commitment to non-discriminatory treatment for American companies.

This development escalates a dispute that began in 2021 when Australia first mandated that tech platforms negotiate content licensing deals with news organizations. Meta, which initially blocked news feeds in Australia before agreeing to deals with major outlets, announced in 2024 it would cease paying for news content.

In response, Australia's government shifted its approach from mandatory arbitration to a direct tax mechanism, expanding its scope to include total revenue rather than just social media-related income.

Meta's objection highlights potential geopolitical tensions, drawing parallels to previous U.S. trade actions against other nations implementing digital services taxes. The company argues that the proposed tax is broader than existing digital services taxes globally. A U.S. congressional committee has also expressed concerns regarding Australia's regulation of tech firms, requesting testimony from Australia's internet regulator on what it termed a regime of censoring American free speech.