At the M20 Summit, an independent initiative focused on integrating media and information integrity into the G20 policy agenda, the Forum on Information and Democracy is releasing its new policy brief that examines the potential of digital service taxes (DSTs) to sustain quality journalism as the financial landscape of the media sector increasingly deteriorates.
In response to significant advertising revenue losses of the media, primarily driven by dominance of Big Tech platforms over this market, the policy brief calls for the implementation of a broad based digital services tax to fund journalism. It reviews various attempts at implementing such taxes, with a spotlight on country-specific examples, notably Austria, which has made significant strides in earmarking a portion of its digital ad tax revenue for journalism.
Such a tax has the potential of generating substantial funds, including for the media sector. Since its introduction in January 2020, Austria’s digital tax on advertising has generated significantly more revenue than anticipated – €124 million by 2024, surpassing the original estimate of €20 million, although only €20 million is directed to the media. In France, the “GAFAM tax,” enacted in 2019 – but without earmarking for journalism – has also seen substantial growth, accumulating over €100 million annually and approaching €1 billion by 2024.
The paper explores various options for designing a digital services tax, outlining a clear and actionable path forward. It highlights the existing taxation models along with their advantages and disadvantages, reviews real-world taxes and proposed initiatives, and discusses strategies to ensure fair and equitable implementation and distribution of funds.
Beyond the operational aspect of designing and implementing such a tax, the brief emphasizes the clear rationale for earmarking a tax on dominant digital platforms to support journalism, grounded in the polluter pays principle. This principle, which asserts that those who produce pollution should bear the costs of managing it, is applied here to Big Tech platforms that negatively impact our information environment by diverting vital resources from the media sector while benefiting from news content without adequate compensation.
The numbers are telling: Big Tech platforms have effectively captured traditional media’s advertising revenue, with the global advertising industry surpassing $1 trillion in 2024 and despite this growth, news organizations have seen their advertising revenue halve since 2019 compared to a decade earlier.
Media outlets are now presented with the dual challenge of having to innovate to reinvent their business model while competing for limited audience attention, commercial income, and philanthropic support – all while continuing their mission of reporting facts and informing the public. These challenges are further compounded by the rise of Generative AI, which are training their models on journalistic content without adequate compensation and are providing a new gateway to access “information”.
The tax is therefore not only a response to market imbalances but also a moral imperative, for dominant Big Tech to pay their fair share and for governments and other stakeholders to effectively recognize journalism’s vital role as a public good essential to democracy.
Despite the current political context, where negotiations for a global taxation framework have stalled and tariffs are being threatened, this brief serves as a comprehensive resource for experts and policymakers looking for effective and straightforward solutions to address the financial challenges facing the media industry and to safeguard quality journalism in a rapidly changing digital environment.
The M20 Summit, organised by The South African National Editors’ Forum (Sanef) and Media Monitoring Africa marks a crucial occasion to launch this brief, highlighting the urgent need to integrate media and information integrity into the G20 policy agenda while offering concrete policy solutions to address these critical challenges.
The Forum is hosting a dedicated webinar on Monday September 8th from 3pm to 4:30 to showcase the main findings and strategic recommendations of the policy brief (registration link).
