Canada should move quickly on legislation to make Facebook and Google pay for news content, because it was only when Australia began taking action that the digital giants responded with deals, says the head of the association representing the Canadian news media industry.
“If these companies will only act once legislation is imminent, then we’d like to see legislation sooner rather than later,” said Bob Cox, chair of News Media Canada and publisher of the Winnipeg Free Press.
Australia’s Parliament on Thursday passed the final amendments to the so-called News Media Bargaining Code that forces Google and Facebook to pay for news. Last week, Canadian Heritage Minister Steven Guilbeault said Canada would introduce its own rules in the coming months.
How Canada proceeds will likely have a major impact on the future of news in the country. Cox said Google and Facebook have so much power in the marketplace that it makes it impossible for small players to to compete. And they’re so big — Google parent Alphabet had about $180 billion US in revenue last year — that almost everyone is a small player.
In Australia, the digital giants won’t be able to make take-it-or-leave-it payment offers to news businesses for their journalism. Instead, in the case of a standoff, an arbitration panel would make a binding decision on a winning offer. A last-minute amendment gave digital platforms one month’s notice before they are formally designated under the code, giving the parties more time to broker agreements before they are forced to enter binding arbitration arrangements.
In return for the changes, Facebook agreed to lift a ban on Australians accessing and sharing news on their platform. Google had already struck deals with major Australian news businesses in recent weeks, including News Corp.
Canada’s news media industry has come out hard against Facebook and asked the government for more regulation of tech companies to allow the industry to recoup financial losses it has suffered in the years that Facebook and Google have been steadily gaining greater market shares of advertising.
‘They basically forced Facebook’
Cox said Facebook and Google had been reluctant to make any deals with publishers until Australia “forcefully” pushed forward, and it worked.
“They basically forced Facebook and Google to work with that legislation,” he said. “Now Facebook managed to get some changes to the legislation, but basically they’ll still be required to negotiate deals with publishers and that’s the end goal.”
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Cox said he gives credit to Google and Facebook for programs they’ve enacted to support journalism, including training, grants and tools. Facebook announced on Wednesday that it would raise its funding of news publishers to $1 billion over three years, and the company estimates that the traffic it sends to news websites contributes hundreds of millions of dollars to the Canadian news industry.
“What they haven’t done, though, is pay for content, and that’s what we’ve been trying to get them to do,” he said.
Google recently announced a willingness to pay for content through its Google News Showcase licensing model, but it hasn’t begun to operate yet, Cox said. In a statement, Meg Sinclair, head of communications for Facebook Canada, said the company is “exploring” investments in news licensing and programs to support sustainability of journalism in Canada, but isn’t in any discussions about specific licensing agreements.
Chris Moos, a lecturer at Oxford University’s Business School, said the last-minute amendments in Australia’s legislation amounted to a “small victory” for Facebook.
Moos said the legislation would likely result in small payouts for most Australian news publishers. But Facebook could again block Australian news if negotiations broke down.
Andrea Carson, an associate professor in the department of communication and media at La Trobe University in Melbourne, agreed, but also said the government had gotten what it wanted.
What Canada can learn
As for what can be learned from Australia’s situation, Carson said Canada should consider whether Australia took the right approach.
“There are other mechanisms for doing this, such as putting a tax on digital advertising,” she said. “Maybe other countries might consider that rather than looking through competition law, which is what Australia’s done.”
Carson also suggested countries should make certain the money is used to fund public-interest journalism, a guarantee that doesn’t exist under the Australian system.
“It goes into the larger pool of News Corp.,” she said.
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Guilbeault, who could not be reached for comment on Thursday, has promised a “made-in-Canada” approach.
“We need to find a solution that is sustainable for news publishers, small and large, digital platforms, and for the health of our democracy,” he said on Tuesday.
There have been concerns in Australia that smaller publications might miss out while the tech giants focus on big players, a “real danger” that Cox said should be dealt with in any legislation.
“The main reason why we’ve always argued that government action is necessary [is] so that it helps the entire industry and helps support local news across the country, as opposed to simply the bigger publishers who have had access to Facebook and Google for a long time anyway,” he said.
Disclosure: CBC/Radio-Canada has business partnerships with Facebook for content distribution and with Google for services that encompass mobile distribution, data storage and communication tools.