Meta has accused Australia of breaching US trade commitments over a proposed tech tax targeting major digital platforms, escalating a long-running battle over whether technology companies should pay for news content.

The owner of Facebook and Instagram says a government proposal to impose a 2.25% levy on Australian revenue earned by certain platforms could violate Australia’s obligations under the US-Australia Free Trade Agreement.

Meta argues the measure unfairly targets American companies by imposing financial penalties on platforms that do not enter into commercial agreements with Australian news publishers.

“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,” Meta said in a blog post.

Warning revives a fight that has simmered since Australia introduced its News Media Bargaining Code in 2021.

The dispute traces back to 2021, when Australia introduced laws designed to force large technology companies to negotiate payment agreements with media organisations or face a binding arbitration process.

Publishers argued the platforms were benefiting from journalism without paying for it.

Meta responded by briefly blocking news content on its platforms in Australia before eventually striking commercial agreements with several major publishers.

Those arrangements were later abandoned in 2024 as Meta continued to scale back its focus on news

The company has since wound back news in several markets and repeatedly argued that news represents only a small share of the content users consume on its platforms.

A spokesperson for Assistant Treasurer Daniel Mulino said the government remained committed to the reforms despite opposition from major technology companies.

The latest dispute comes as Canberra pushes ahead with plans to make digital platforms contribute more to Australia’s news industry, even as Meta continues to distance itself from news content.

For Canberra, the challenge is balancing support for Australia’s media industry against the risk of a broader trade dispute with the United States.

Whether Meta’s warning develops into a formal trade challenge or remains part of a negotiation over the future of news payments in Australia remains to be seen. What is clear is that the fight over who pays for journalism is far from over.