Meta blasts Australia’s 2.25% revenue tax as FTA breach, warns US trade action
META•The $1.6 trillion social media owner called Australia’s proposed 2.25% levy on total domestic revenue 'indefensible'. It argued the measure breaches the bilateral free trade agreement’s equal-treatment clause for US firms and could prompt US trade action.
1. Dispute Background
The conflict traces back to Australia's 2021 news bargaining law requiring platforms to pay or negotiate licensing deals with local media. Meta initially blocked news feeds, reached deals with major outlets and halted payments in 2024 when Australia shifted to a tax model.
2. Proposed Tax Details
Australia’s draft legislation would impose a 2.25% levy on all revenue generated domestically by designated platforms, including non-social media income. The draft expands coverage to Meta, Google and TikTok and applies broadly rather than targeting news-related revenue.
3. Alleged FTA Violation
Meta argues the levy violates the US-Australia Free Trade Agreement’s requirement to treat American firms no less favorably than Australian peers. The company calls the proposal 'indefensible' and broader than existing digital service taxes that have prompted US trade actions.
4. Potential US Response
If Australia enacts the tax, the United States could initiate formal trade measures to defend treaty rights. A US congressional committee has signaled interest in challenging the Australian regime as inconsistent with bilateral commitments.
