During the 2021 federal election campaign, the Liberal party committed to “introduce legislation, within 100 days, that would require digital platforms that generate revenues from the publication of news content to share a portion of their revenues with Canadian news outlets. This legislation would be based on the Australian model and level the playing field between global platforms and Canadian news outlets.”
This begs several questions.
What exactly is the Australian model and how does it work?
The Australian model is relatively simple. It allows news publishers to negotiate collectively with the Big Tech platforms and services to receive reasonable compensation for the content our Canadian journalists produce. If negotiations don’t lead to a fair settlement, it goes to baseball-style final offer arbitration. It doesn’t involve taxpayer money, nor does it put government in the role of picking winners and losers.
What was the initial reaction from Big Tech?
Google threatened it would stop making Google Search available in Australia. Meta went as far as restricting people and news organizations in Australia from posting, sharing or viewing news content on Facebook. Australian Prime Minister Scott Morrison fired back, “We will not be intimidated by Big Tech seeking to pressure our Parliament as it votes on our important News Media Bargaining Code. Facebook’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing.”
Is it working for Australian publishers?
The Australian Competition & Consumer Commission (ACCC), which is akin to our Competition Bureau, told us, “The ACCC understands at least 30 agreements have been reached with a range of media organizations, including small and regional publications. Public reports suggest that, in total, these deals with Google and Meta total several hundreds of millions of dollars per annum and have resulted in strong hiring environments for Australian journalists. Significant Australian news businesses have also committed to increase investment in journalism and regional news.”
Robert Whitehead Digital Platform Initiative Lead with the International News Media Association said, “There’s no question that small to mid-size publishers have been the surprise winners from the Australian media bargaining code. The big three commercial players started the momentum … but it has been the smallest players who have gained the most, relative to their size.”
What does the outgoing chair of the ACCC say about the code?
According to a Feb. 14 story in the Sydney Morning Herald, chair Rod Sims said it’s “not surprising” that Google doesn’t like the code. “It forced them to do something they did not want to do, which is pay for journalism. That’s money they would not have paid without the code. It’s the anti-journalism approach that I think is most worrying. What they’re saying clearly is they don’t want to pay money to the current media companies, which employ journalists, they would rather get information from companies that aren’t media companies, perhaps individuals who aren’t journalists. This is about protecting journalism, which is what the code was always about, and what the code achieved.”
What is Big Tech saying about adapting the Australian model to Canada?
Google, according to a Feb. 15 story in the Press Gazette, said it “doesn’t provide a sustainable model for the future of journalism.” Instead, it wants to “create a ‘Canada made’ solution that will ensure a robust future for news in Canada and enable innovation.” On that we agree with the Californians, but it must involve the ability for publishers — large and small — to negotiate collectively, backed up with the teeth of a robust enforcement mechanism. And it must involve publishers receiving fair market value for content.
The bottom line is that Canada’s news publishers are facing an existential threat, with Google and Facebook now taking 80 to 90 per cent of online ad revenues. After peaking at $4.6 billion in 2008, Canadian newspaper revenues have fallen off a cliff, and now stand below $1.5 billion. During that same period, Google and Facebook have seen their combined Canadian revenue grow from a little over $1 billion to over $8 billion.
Since 2013, we have lost 300 trusted news titles in Canada. The time for Canadian parliamentarians to act is now. A made-in-Canada approach, along the broad strokes of what the Australians have done, is what we need. This is not a one-and-done silver bullet, but receiving fair market value for content Canadian journalists produce is an important step to putting the news business on a more stable commercial footing.