Media group questions Facebook Canada’s suggestion that exiting news markets an ‘appropriate’ option.

War of words as legislation in Canada looms

TORONTO • As Canadian legislation looms to level the playing field between news publishers and Big Tech platforms, the two sides continue to be divided over what value each brings to the other — even as multimillion-dollar agreements are forged to pay for news content in Europe and Australia.

On Friday, an association representing publishers across the country took issue with statements made by Facebook Canada’s head of policy in an interview with The Logic, including a suggestion that the presence of news on the social media platform provides a value to publishers equivalent to several hundreds of millions of dollars.

John Hinds, president of News Media Canada, disputed that figure, and pointed to a report published by his association last year that estimated the value of news content on the platforms at more than $600 million, an amount he said “far outstrips any benefit that publishers derive from the platforms.”

During the interview with The Logic, Facebook’s Kevin Chan suggested the News Media Canada report last year dealt primarily with the business model — and impact — of other online platforms, not Facebook’s.

Hinds, however, said his view is bolstered by a flurry of multimillion-dollar agreements Alphabet Inc.’s Google struck with publishers in Australia last month as the country put the final touches on a mandatory bargaining code governing the relationship between traditional publishers and the tech platforms.

Google signed multiyear deals with three of Australia’s largest media companies, including Rupert Murdoch’s News Corp., which are reportedly worth tens of millions of dollars to the publishers.

According to Google, each publisher’s deal is different, depending on what they bring to the table, and some of the compensation will come in the form of services “in kind” rather than cash for the publishers.

Both Google and Facebook objected to Australia’s code, and pushed to be able to negotiate commercial licensing agreements with the publishers of their choice to feed specific news products, rather than being forced to pay for simply carrying news links or snippets. But the spectre of the mandatory code has been credited with pushing forward arrangements that were acceptable to both sides.

One of the most visible objections to the legislation was Facebook’s decision to pull Australian news from its platform for several days last month in protest of that country’s mandatory bargaining code. However, just days before the code became law with some minor amendments, Facebook struck its first commercial licensing deal with Australia’s Seven West Media.

In the interview with the Logic, Chan said such an approach could still be “appropriate” depending on the situation.

“At the end of the day, if it doesn’t work for the platform because the regulation is not workable for them, then exiting the news market is an appropriate response,” he said.

News Media’s Hinds said he was surprised Facebook still views exiting a news market as a viable option.

“I am not sure why they would want to repeat what they did in Australia,” Hinds said.

Canada’s Heritage Minister Steven Guilbeault has pledged to introduce legislation in Canada by June to level the playing field between digital platforms and traditional media players and support the domestic news industry.

That plan has won favour with News Media Canada, which said Canadian news publishers and the heritage minister agree legislation is needed “to ensure there are fair negotiations” under a code of conduct.

“We saw Facebook make threats but finally agree to compensate news publishers in Australia,” the statement said.

“That behaviour shows it does not want to pay willingly and will only come to the negotiating table when legislation is passed."

The online platforms have pointed out that publishers willingly share their stories and should simply remove them if they are unhappy they aren’t being compensated.

But News Media Canada countered that an “unbalanced power structure” between publishers and the platforms has developed over time. After initially enticing publishers to display their wares, Facebook has now become “such a powerful platform that news publishers have no choice but to use it,” the organization said in Friday’s statement.

Officials at Facebook declined to comment on the News Media Canada statement.

Guilbeault has said Canada is studying both the Australian bargaining code and a European response based on copyright.

It is understood there will be further consultations with publishers, the tech platforms, and other affected parties and experts before legislation is introduced.

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