Around the world, there is growing consensus that the dominant power of Big Tech must be reined in to prevent market failures.
In late June, Congressman David Cicilline, who chairs the Antitrust Subcommittee in the U.S. House of Representatives said, “Today, we have sent a clear message. The United States will no longer let other countries lead the fight against unregulated monopoly power.”
These market failures are having an impact on journalism, where the platforms divert about 80 per cent of advertising revenue from Canadian publishers. A U.S. Senate Committee on Commerce, Science and Transportation report found, “Although local journalism has faced numerous challenges adapting to the new media landscape, they are also confronting unfair practices by some of the largest technology companies in the world.”
Around the same time, Denmark became the first country in Europe to have media outlets come together to form a collective bargaining organization to negotiate with Google and Facebook. This approach is modelled on the music industry, where musicians can negotiate collectively with streaming services, such as Spotify.
Simply put, the Danish publishers are seeking fair value for the platforms use of content produced by their journalists. This approach seeks to end the ‘divide and conquer approach’ favoured by the platforms, whereby they negotiate with dominant players to set the standard for others to follow – something that does not benefit smaller publishers.
This week, the French Competition Authority slapped Google with a 500 million euro fine for not complying with the regulator’s order on conducting talks in good faith with France’s news media publishers. This was the largest fine in the French competition watchdog’s history for a failure to comply with one of its orders.
Australia passed a law in February, which was fiercely opposed by the U.S. tech giants. At one point, Facebook even blocked all news content to Australians on its platform, and Google threatened to remove its search engine from Australia – a warning shot to policymakers everywhere, including Canada.
Simply put, the Australian News Media Bargaining Code seeks to level the playing field between platforms and publishers to recreate what would otherwise be competitive negotiating conditions. News supply and payment terms are negotiated between the parties. Only if negotiations fail will an independent arbitrator step in to set the price.
With COVID-19, Canadians have relied on Canadian journalists as valuable, trusted sources of both information and insight. At the same time, the pandemic and its devastating impact on the economy has seen traditional advertisers reduce their spend or simply vanish.
We need the Australian model for the Canadian news publishing business, whose competitive viability is essential for a vibrant democracy and for communities from coast to coast to coast. Parliament was not able to come up with Australian-style legislation, a key recommendation from News Media Canada’s report Levelling the Digital Playing Field, before it rose for the summer recess. With this continued uncertainty, it is no wonder some publishers made their own deals with Google and or Facebook, rather than waiting for government action – although more than 450 trusted titles across the country, most of them community newspapers, have no such arrangement.
Going forward, Canada’s news publishers remain united in the belief that all federal political party platforms should support a sustainable news ecosystem in Canada, and we firmly believe the best way to do that is to allow us to work together in a collective bargaining unit to negotiate competitive terms for the use of our content and intellectual property. Experience elsewhere has shown, it is only through this collective approach that the digital playing field can be levelled between platforms and publishers who hire the journalists, who produce content.
And the Canadian Competition Bureau has a role to play to provide guidance on how we can also do this in Canada. It’s through a collective approach that all publishers benefit, so we can invest in excellence in Canadian journalism and maintain a strong, fiercely independent press.
We cannot afford to have news deserts in Canada. Some have floated the idea of the platforms contributing to a fund akin to the Canada Media Fund. Given the difficulties associated with getting Bill C-10 passed, a fund seems politically challenging. It raises serious issues around journalistic independence. Who decides where the money goes: Google? Facebook? Government? A fund would also be administratively expensive. For example, the Canadian Media Fund is forecast to have expenses of more than $20 million in 2021-22. That’s not newspaper box change.
News isn’t entertainment. As New York Times columnist Charles M. Blow wrote recently, “Democracies cannot survive without a common set of facts and a vibrant press to ferret them out and present them. Our democracy is in terrible danger. The only way that lies can flourish as they now do is because the press has been diminished in both scale and stature. Lies advance when truth is in retreat.”
Far better than a fund is having the publishers negotiate collectively with the platforms and invest the proceeds in editorial content, rather than in administrivia. Real content, created by real journalists, can only be produced in fair and competitive financially viable markets. The Australian model is a simple, ready-made, off-the-shelf solution that does not require taxpayer money, new taxes, or fees. It’s a win-win.
Jamie Irving is chair and Paul Deegan is president and chief executive officer of News Media Canada
For more information visit www.levellingthedigitalplayingfield.ca.