THE LIBERALS ARE STUDYING OPTIONS THAT WOULD FORCE TECH GIANTS TO SHARE THEIR AD REVENUES WITH CANADIAN MEDIA FIRMS, BUT HAVE NOT YET FORMED A HARD POSITION ON THE MATTER, ACCORDING TO A SOURCE.

Media firms could benefit from move

OTTAWA • The Liberal government is studying regulatory options that would force U.S. tech giants to share its advertising revenues with Canadian media companies but has not yet formed a hard position on the matter, a senior government source says.

The senior official said Ottawa has not made a final decision on whether it would write regulations similar to those introduced in France and Australia, which could force international tech behemoths Facebook and Google to share a chunk of their advertising dollars with local media companies that provide them with news content.

Federal officials have been weighing regulatory options ever since a Parliamentary report earlier this year called for them.

Cash flows among media organizations have been stunted in recent years, due in part to a shift to digital advertising that has been dominated by a handful of U.S. tech firms.

Two key decisions in France and Australia in recent weeks could signal a policy shift, some observers say.

In a rare move last week, Australian policymakers called on the country’s competition bureau to draft a mandatory code of conduct between news outlets and digital platforms that would involve sharing a portion of advertising revenues. It would also establish datasharing agreements and binding dispute resolution mechanisms.

Australia’s move followed a decision by France’s competition authority earlier this month that said Google would have to compensate publishers for using and redistributing their content.

Canadian associations representing news organizations say similar moves could help struggling local firms. In 2017, Google and Facebook accounted for 71 per cent of the $6.7-billion digital ad market in Canada, compared to just five per cent for newspapers and 24 per cent for “other” advertisers, according to data from News Media Canada.

Canadian policymakers are monitoring the shifts in

Australia and France, the senior government source said, and have already outlined generalized policy responses.

In January, Industry Minister Navdeep Bains and Heritage Minister Steven Guilbeault issued a joint report that explicitly called for “regulatory intervention to ensure that creators of news are compensated for the use of their original content by online platform providers.”

The report proposed a sweeping regulatory overhaul across the news, broadcasting and telecommunications sectors, as American tech giants increasingly mop up huge pools of ad revenue despite producing a comparably small amount of original content.

“Traditional news outlets are losing both advertising and subscription revenues, compromising their ability to produce quality news, while Canadians are increasingly accessing news content through online social media platforms.”

A spokesperson for Bains said the ministry has been studying the report’s recommendations and said Ottawa is “committed to making sure there is fair competition online.”

Canadian lobby groups representing publishers and broadcasters have called for changes similar to those introduced by the Australian government, but say there has been a hesitation on the part of Ottawa.

“With anything around the digital platform, they have always said we have to wait until there’s an international consensus,” said John Hinds, president and CEO of News Media Canada, an industry association.

“We were always told that to ‘wait until.’ So it’s really heartening that Australia and France have taken a lead on this issue.”

News Media Canada represents various news organizations including Postmedia Network, which owns the National Post.

Some observers speculate that Ottawa could be hesitant to target international tech giants after strict privacy measures introduced in various European countries drew heated criticism from U.S. President Donald Trump.

But Hinds argues the regulatory changes around advertising would target a much narrower aspect of the U.S. companies’ operations.

“I think this is a very specific sector, and it’s about compensation for creators,” he said.

According to a Reuters report, Facebook said it was “disappointed” in Australia’s decision.

“We’ve invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry,” Facebook Australia and New Zealand managing director Will Easton said in an emailed statement to Reuters.

Google said it would continue to “work constructively with industry” on the new mandatory code of conduct, according to the report.

U.S. TECH GIANTS IT’S REALLY HEARTENING THAT AUSTRALIA AND FRANCE HAVE TAKEN A LEAD ON THIS ISSUE.