Feds must take on the tech bullies
TIME TO JOIN WITH OTHER NATIONS TO COMBAT ANTI-COMPETITIVE PRACTICES EVERYWHERE
News Media Canada, a consortium of a majority of Canadian publishers, released an important report Thursday about the dire state of the country's newspaper industry, due to the market abuses and privileges enjoyed by Facebook and Google.
Coincidentally, on Tuesday, the United States Department of Justice announced that it was filing an antitrust lawsuit against Google's parent company, Alphabet, for engaging in anti-competitive behaviour in its search and advertising businesses. The firm also faces legal action by the European Union, the U.S. Federal Trade Commission and various state attorneys over accusations that its search engine and digital advertising businesses operate as illegal monopolies. Litigation, however, takes years, but the urgency is real in Canada and around the world.
Today's News Media Canada report — titled The Sustainability of Journalism — urges Ottawa to take immediate action modelled on Australia's proposed legislation. “We have estimated the Australia precedent … would, if brought to Canada, permit publishers to recoup $620 million in annual revenues as compensation for supplying news content to big digital platforms,” the report states.
That figure may seem high, but it is justified given that digital platforms have been free riding off news content for years without paying for it and without contributing to the cost of its production, according to the report. In essence, newspapers around the world in the digital age have become Silicon Valley's uncompensated content supply chain.
In recent years, newspapers have attempted to get compensation for the use of their copyrighted content, but have been rebuffed by the large tech firms that control news aggregation and social media. They have also failed in their bids to deal directly with advertisers. This is because Facebook and Google control the digital distribution of content and have an oligopoly over the online advertising system that newspapers rely on for digital revenues.
As the report points out, newspapers carry national and local information to the public and are the underpinning of society, business and democracy, but the sector has collapsed, which poses a threat to our way of life.
Between 2014 and 2019, newspaper revenues declined by 43 per cent, while Google's increased by 113 per cent and Facebook's by 387 per cent.
In the decade between 2008 and 2018, 250 Canadian papers shut down, and this trend has only accelerated due to COVID-19, which has led to many layoffs and the closure of an additional 50 papers. Only around 75 dailies still exist in this country, along with several hundred weeklies, monthlies and magazines.
The report's allegations about anti-competitive practices — which echo some of the U. S. Justice Department's allegations against Google — should be investigated by the Competition Bureau. But Ottawa must also immediately adopt some or all of the provisions contained in the Australian code.
For starters, Australia and France are legislatively expanding the intellectual property rights that publishers have over their content, to protect copyrights and establish a value for content that is republished by companies like Facebook and Google.
“Platforms would not be able to display publishers' content without first negotiating access to it — that is, payment for a licence to the content,” the News Media Canada report states. “In addition, Australia is levelling the playing field in negotiations by creating a formalized process, with a short time span, for establishing prices for licences and, if necessary, binding arbitration.”
Australia's code would also allow publishers to engage in collective bargaining, so newspapers cannot be divided and conquered, or excluded, by the tech giants. For these and other reasons, the report argues, a federal arbiter is required to prevent digital platforms from taking harmful actions against publishers, such as changing access to content, changing algorithms to bypass content or other moves designed to punish publishers. The Australian code would also impose massive penalties on the gigantic digital companies if they fail to comply.
Due to the asymmetrical nature of the newspaper- tech relationship, News Media Canada wisely recommends the creation of an ongoing federal digital media regulatory agency to oversee digital platforms and the digital economy that could help bring about reforms and police market fairness.
Not surprisingly, Australia's code has met with a great deal of resistance from Google and Facebook. They argue that clicks on ads from news-related searches yield considerably lower revenues than newspapers have estimated and that, if forced to pay excessive amounts for content, they may simply refuse to distribute any content from Australian media outlets.
Such threats may be a bargaining tool, but they underscore the fact that these data giants wield too much power over the marketplace. These companies, the report notes, “flatly refuse to pay for content, traffic or data,” and have refused to negotiate data-sharing or other terms with newspapers.
Ottawa must act quickly to salvage what's left of Canada's embattled media industry and must also join with other developed nations in order to take on anti-competitive practices everywhere. The European Union has already challenged the tech giants with some success, and Washington is now doing its part, as well.
Today's news marks a watershed of sorts. In June, Google extended an olive branch by announcing that it would start paying some publishers for their news content in Germany, Australia and Brazil, “with more to come soon.” This was an attempt to placate some, but nothing has materialized.
This is why Canada must act. Google's enticing “more to come soon” payments doesn't cut it. Fairness cannot come soon enough for the newspapers that serve their communities in a way that multinational monopolies never will.