STOP TECH’S FREE RIDE & MEDIA WILL PROSPER.
THE PM HAS TOTAL RESPONSIBILITY FOR THE CHOICE OF GOVERNOR GENERAL. — COSH
THESE ARE HUMAN RIGHTS ISSUES AND SAFETY CONCERNS.
This is one in a series of articles about how Canada should navigate regulating technology companies.
The combination of monopoly power and deregulation has given rise to monolithic social media empires that have become more powerful than nation-states, corporations and societies. Finally, Australia, the european union, the united States and France are starting to regulate Silicon Valley. This is essential to protect their media, cultures and national political conversations as well as their citizens’ privacy and safety.
At the heart of the issue is the fact that Google, Facebook, youtube and others have unfairly devoured global advertising revenues. They have accomplished this by republishing traditional news and media information, without paying for it, and also by deploying anticompetitive practices to capture and retain ad revenues. Their practices have pulled the proverbial rug out from under the media business model. Without advertising, newspapers and networks and websites cannot exist. And without an independent media, democracy cannot exist either.
The u.s., eu, Australia and now France have launched unique initiatives to rein in these internet giants. Canada is finally considering action to combat this onslaught, but must move quickly. And two reports in 2020 outlined the damage thus far.
In October, News Media Canada, a consortium that includes most Canadian publishers, released a report documenting the dire state of the newspaper industry due to market abuses and privileges enjoyed by Facebook and Google or Alphabet. Its report documents how the newspaper sector has collapsed. 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.
A second analysis, called the Canadian Media Concentration research project, analyzed data drawn from a dozen sectors of Canada’s telecom-media-internet industries. It stated that Google and Facebook control 80 per cent of the online ad market in Canada.
In 2019, Google’s Canadian revenue was $4.8 billion based on advertising and search revenues. Facebook had 21.5 million Canadian users across Facebook, Instagram and Whatsapp and made $2.6 billion that year. These platforms republish content created by traditional media without their consent and without providing them compensation. Such freeloading has helped them gain and retain huge audiences and ad dollars.
In October, the united States department of Justice filed an antitrust lawsuit against Google’s parent company, Alphabet, for engaging in anticompetitive behaviour in its search and advertising businesses. The firm also faces legal action by the european union, the u.s. Federal Trade Commission (FTC) and various state attorneys over accusations that its search engine and digital advertising businesses operate as illegal monopolies. Facebook has also been sued by the FTC and states’ attorneys general. Canada’s Competitions bureau should investigate its operations in Canada.
Australia’s approach involves a code that facilitates the joining of forces by publishers so they can engage in collective bargaining to obtain remuneration for their content. This is important so newspapers cannot be divided and conquered, or excluded, by the tech giants. For this reason, News Media Canada argued that 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 also proposes to impose massive penalties on the gigantic digital companies if they fail to comply. Furthermore, Australia has mandated negotiations between Google/facebook and media outlets.
The european union has passed greater copyright protections for media companies and left regulations up to its 27 members nations. but France has led by engineering a deal between Google and L’alliance de la Presse d’information Générale, representing 300 political and general information press titles in the country. under its terms, Google and its media subsidiaries will pay media outlets based on their contribution to general discussion, publication volume, and audience size. The deal took months to negotiate, and required intervention by the courts, to finally get Google to the table. The other digital players will be similarly regulated.
Canada must first expand 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. Canada has yet to do this, but new legislation, bill C-10, has been introduced into Parliament that would apply the broadcasting Act to the internet. This would allow the Canadian radio-television and Telecommunications Commission to regulate Silicon Valley’s operations within Canada and address its refusal to pay for content and share advertising fees.
There are also anti-competition and abuse of dominant market position concerns here. In recent years, Canadian newspapers have attempted to get compensation for the use of their copyrighted content, but have been rebuffed by the large tech firms. They have also been blocked from dealing directly with advertisers because Facebook and Google control the digital distribution of content. This represents a duopoly that controls the online advertising system that newspapers rely on for digital revenues.
besides revenue robbing, social media is being pilloried worldwide for failing to curate content, inciting violence and hate, and privacy intrusions. These are equally important and governments plus courts are busy redrawing the online landscape to curtail abuses. These are not only human rights issues but also public safety matters, and following scandals, are finally becoming priorities.
Canada’s solution has been to provide government subsidies to prop up local media, but this is problematic. Allocation is politicized and thereby affects the independence of media voices. The best solution is to make the free market work by enforcing regulatory restraints. Stop the tech world’s free ride, immunity from liability for hateful or violent content, and exploitation of competing media outlets, and the media world will be able to prosper.
The News Media Canada report 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.”
That would prevent more closures, and support more news gathering, but the figure appears high. What’s not debatable is that the status quo is no longer an option.