Bundesrat demands digital levy: Tech giants should finance media diversity

The Bundesrat is pushing for the introduction of a digital levy. In a resolution adopted on Friday, it calls on the federal government to submit a corresponding draft law promptly. The aim is to secure the economic foundations for media diversity in Germany, which has come under massive pressure due to the market power of international platform operators. The Federal Council is thus reacting to the progressive erosion of advertising revenue in the traditional media sector, which has now reached existential proportions, particularly for local and regional offerings.

The resolution, adopted at the request of Schleswig-Holstein, stipulates that the levy should preferably be structured as a non-tax special levy. The Bundesrat is thus responding to the specific market structure in the digital space: while global corporations like Google and Meta tie up significant advertising budgets, they simultaneously benefit from the content of traditional media providers. However, they do not contribute to the financing of this democratically important infrastructure to the same extent.

The revenue from the levy is to be used for specific purposes. According to the states, the media industry is to be supported primarily where the free market hardly allows for refinancing. A particular focus is on securing comprehensive local and regional information, which is considered an essential pillar for free opinion formation and the liberal democratic order.

Federal government still divided

According to its own statements, the Bundesrat is orienting itself towards EU regulations in defining the affected companies. Only very large online platforms and search engines classified as "VLOPs" under the Digital Services Act (DSA) are to be charged. This affects providers with a reach of more than 45 million monthly active users in the EU. This limitation is intended to protect small platforms and innovative startups so as not to jeopardize their competitiveness and investment capacity. A too broad burden, according to the reasoning, would ultimately only further consolidate the market position of the already dominant tech giants.

A central aspect of the appeal is the preservation of state independence. To guarantee the independence of the press and broadcasting, the criteria for the allocation of funds and the settlement mechanisms are to be designed in such a way that political influence is excluded. For implementation, the chamber suggests using established structures. For example, the state media authorities could take over the administration of the levy to keep bureaucratic effort as low as possible. The concrete design of how the funds are to be used is to be closely coordinated between the federal government and the states: the latter are traditionally responsible for maintaining media diversity.

Behind the initiative is the conviction that fair competitive conditions in the digital age can only be restored through a financial compensation between those who benefit from large reach and the creators of journalistic content. Since local media not only provide information but also create regional identity, the Bundesrat sees the levy as a necessary instrument for stabilizing the basic media supply in Germany. Minister of State for Culture Wolfram Weimer announced in the spring that he intended to introduce a digital levy of 10 percent for tech corporations. However, his cabinet colleague, Minister of Economics Katherina Reiche, has little faith in such a "platform solidarity contribution".

(nen)