Link Taxes Won’t Quit: 2024 Recap and What to Expect in 2025
In the United States and abroad, policymakers are considering what addressing media sustainability means for their citizens and their local news ecosystems. One of the more problematic practices, implemented in several countries over the past few years and proposed in the United States at the federal and state levels, is mandatory online news payments, generally seen in the form of “link taxes” or mandated collective bargaining agreements. These proposals either force digital services to pay just for linking to news websites or enter into agreements with publications to compensate them. Despite increasing unintended consequences, these laws continue to resurface.
Existing Laws
Canada’s Online News Act, implemented in June 2023, has resulted in a chilling effect of innovation and information sharing throughout the country’s media landscape. The country continues to seek out ways to make the law work, but it is clear its current structure is harming the community newsrooms the bill seeks to aid. A survey released in early August found that Canadian news outlets had lost 85% of their engagement as well as a 42.6% drop in news platforms’ overall public engagement. Currently, the bill remains in effect despite academics and experts warning against the harmful consequences of the Act on both innovation and investment for community and local news.
Australia’s News Media Bargaining Code has been in effect since 2021, but agreements between digital services and Australia’s publications are up for renegotiation in the new year. Since its implementation, the country has seen a dramatic decline in news production. Despite warnings from experts that the code could “break the world wide web”, the country continues to pursue and even supplement it. In response to its October 2024 report that acknowledges the Code’s limitations, Parliament most recently publicized the beginning stages of its “news media bargaining incentive.” The incentive is a tax on leading digital services that can be refunded only if the companies renew or initiate deals with news publishers to pay for news content. Further discussions on the tax and the initial consultation paper are expected in “early 2025.”
Link Tax Proposals in the U.S. and Abroad
The Journalism Competition and Preservation Act (JCPA) is the U.S. Congress’ link tax proposal. Initially drafted to be a straight exemption to antitrust laws, it has now turned into one that pushes for the transfer of revenue from one industry to another. The bill has received bipartisan support in the U.S. Senate and was voted out of the Senate Judiciary Committee in July 2023. Since then, there has been no recent activity and there is currently no House companion. Although it is difficult to pinpoint Congressional priorities in the upcoming year, the JCPA is unlikely to move this Congress and would have to be reintroduced in 2025.
State lawmakers have also been quite busy in this sector as of late. In 2023, lawmakers introduced the California Journalism Preservation Act (CJPA). While the bill went through many rounds of amendments and in the end most closely mimicked Canada’s Online News Act, there were many concerns about how the bill would harm information sharing and would fund many hedge funds and media conglomerates rather than local publications with the most need. The CJPA has been effectively shelved due to an agreement similar to the exemption found in Canada’s Online News Act and there is no expectation that the bill will resurface.
Another proposal was California’s Tax on Digital Advertising Revenue to Fund Journalism, or SB 1327. This bill was part of an effort to impose a “Data Extraction Mitigation Fee” which would fine certain digital services meeting monetary and service thresholds. The bill is not expected to resurface in the new year but does point to a concerning trend of link tax-adjacent policies that discourage innovation and growth for small businesses and journalism.
Illinois’ Journalism Preservation Act was introduced in February 2024 and has many similarities to the first versions of the CJPA. Following a June hearing, the bill was referred to assignments and is expected to be prioritized in the 2025 Illinois Senate. In May 2024, the New York legislature passed the Local Journalism Sustainability Act, which provides tax credits over three years to contribute to journalists’ salaries.
Looking to the global stage, in 2023, New Zealand introduced the Fair Digital News Bargaining Bill to address ongoing concerns with the news ecosystem. In mandating negotiations between digital services and news media entities to compensate publishers for linking to news articles, the bill could harm community outlets’ ability to connect with readers online.
Earlier this year, Indonesia enacted its Presidential Regulation on Publishers’ Rights. The bill empowers the Press Council to have a large role in determining the outcomes and processes of the law and emphasizes a “need for government regulation” to manage the news ecosystem. With the bill being enacted recently, the impact of the bill on both publications and the open internet will likely be seen in 2025.
Trends in the Upcoming Year
Policymakers’ approaches to media sustainability throughout this year point to the following trends in 2025:
- Link tax proposals are likely to increase across the board.
- Approaches that are not “link taxes” but are still extremely concerning for information sharing online and community publications will likely surface globally as well.
- Many proposals are likely to continue to target only a handful of American companies, despite the evolving nature of where people consume their news online.
Conclusion
In the current news ecosystem, more than half of U.S. adults get their news “at least sometimes” from social media. Despite this reliance on the internet, lawmakers continue to look towards the unsuccessful link tax attempts seen globally. Additionally, a recent survey found that news consumption is being spread across more sites. How can these bills address so-called “disruption” due to the internet when they are only looking at a few of the many digital services that enable Internet users to read and share news?
When considering policies at the intersection of news and digital services, it’s crucial lawmakers understand the harms that link taxes cause for newsrooms and the whole of the information-sharing ecosystem online. It remains to be seen how news and media policies will be impacted in 2025, but policymakers must acknowledge the increasingly concerning impact, and prioritize policies that value innovation for both the tech and news sectors — and their users.
