Netflix could be hit with special tax as Australia prepares to tackle digital giants including Facebook and Google

AUD — going nowhere for the moment. Phil Walter/Getty Images
  • Australia’s Communications Minister Paul Fletcher has suggested a special new tax could be levied against streaming service Netflix as local media companies continue to struggle.
  • Companies like Netflix, including Facebook and Google, are facing increasing pressure in Austraila as the ACCC gets ready to release a string of new recommendations for new regulations.
  • Separately, Apple CEO Tim Cook publicly criticised tech companies that “claim credit without accepting responsibility”.

Australia could soon levy a special tax on Netflix as traditional media platforms decline, the federal communications minister has revealed.

Speaking to The Australian newspaper, Communications Minister Paul Fletcher said there was an argument that overseas streaming services should be paying tax in Australia because taxation from traditional broadcasters is dwindling.

“The more you can have companies that are in the same market subject to broadly the same set of regulatory requirements and obligations the better,” he said in the interview.

Fletcher made his comments just weeks before the Australian Competition and Consumer Commission (ACCC) releases the final report from its digital platforms inquiry. The ACCC is due to hand down its report by 30 June.

The inquiry is looking at the impacts of digital search engines, social media and other platforms within the media landscape, with big tech companies like Google and Facebook in its sights.

While the government might be worried about the reduced amount of tax it collects from Australian media companies, the ACCC has flagged its concern lies with the very survival of them.

That’s because the watchdog estimates that for every $100 spent on digital advertising, $47 goes to Google, $21 goes to Facebook and $32 goes to all other websites.

“News and journalism perform a critical role in society. The downturn in advertising revenue has led to a cut in the number of journalists over the past decade. This has implications across society because of the important role the media plays in exposing corruption and holding governments, companies, powerful individuals and institutions to account,” ACCC chair Rod Sims said in the preliminary report.

The final report is set to be released at a crucial time as countries around the world grapple with how to regulate online content as well as the competitive power wielded by tech players.

On Sunday, Apple CEO Tim Cook used his commencement speech at Stanford University to criticise big tech companies, appearing to allude to Facebook which has been embroiled in a number of scandals, including its failure to stop the broadcasting of the Christchurch massacre.

“Lately, it seems this industry is becoming better known for a less noble innovation: the belief that you can claim credit without accepting responsibility … if you built a chaos factory, you can’t dodge responsibility for the chaos,” Cook said.

Cook may have been referencing the recent revelation that months after the Christchurch shooting, Facebook and Instagram were struggling to keep the vision of it off their platforms.

Despite those problems Digital Industry Group Inc (DIGI) – which lobbies for Facebook, Google and Twitter among others – has warned that industry legislation designed to restrict large media companies could hurt smaller players.

“The result can often be that we set a standard that only the largest companies have the resources to meet,” DIGI managing director Sunita Bose told the Sydney Morning Herald.