News publishers call on Ottawa to level playing field

Canadian print and online publishers are urging the federal government to follow Australia's lead in demanding that Google and Facebook compensate news companies for their content.

In a report released on Thursday, News Media Canada recommends a model similar to Australia's proposed News Media Bargaining Code, which would require Google and Facebook to licence content.

Demand for high-quality journalism continues to grow, but there is no current mechanism to make Google and Facebook pay when they use content on their platforms. The tech giants also control between 60-90 per cent of the digital advertising market, giving them market power to “impose unfair and anticompetitive terms on news publishers,” the report says.

Facebook and Google are “cutting off our oxygen supply,” said

Jamie Irving, vice-president of Brunswick News Publishing and the chair of the News Media Canada working group tasked with studying the issues.

“They're taking all of the money, but they're not hiring journalists. And they don't have any of the costs publishers have to pay.”

The report reflects a growing international backlash against the dominance of the two tech behemoths.

France, Spain, the U.K. and the U.S. have also moved to regulate Google and Facebook to level the playing field for local news organizations.

On Tuesday, the U.S. Justice Department and 11 states filed an antitrust lawsuit against Google.

If the Australian code were adopted in Canada, it could permit publishers to recover $620 million in annual revenues as compensation for supplying news content, said the report, which estimates Canadian publishers face revenue declines of between $500 million and $600 million a year between 2019-23.

“The industry needs a level playing field so that participants can define their future based on their merit,” said Andrew MacLeod, president and CEO of Postmedia Network, which includes this newspaper.

Google and Facebook have an “effective duopoly” for digital ads, with Facebook in control over social media and Google in control over searches, said the report.

Google also controls the technology through which advertisers who are looking to buy digital ads are connected to publishers that are selling.

For every digital ad sold, an estimated 49 cents goes to the platform, leaving 51 cents for publishers, said the report.

The two platforms can also access publishers' audiences and content without transparency or fair compensation.

Under the Australian model, the government could order platforms and publishers to negotiate and set fair market prices for licences. That includes a rule allowing publishers to collectively bargain, with an arbitration process if there is no voluntary deal.

“By working collectively, we can't get picked off one by one,” Irving said.

“The only chance we have is to stand together on this.”

The Australian code would require digital platforms to disclose publishers' data on their audiences, a matter that has been a key sticking point with publishers.

The platforms would also be prohibited from taking retaliatory measures against publishers, such as blocking content. If Google or Facebook removes the content of one publisher, they must remove all news content in Australia or face fines.

A dozen different models of pursuing compensation from Google and Facebook were considered, including taxation models, Irving said. But there's already enough money in the system. The problem is that Google and Facebook are scooping it all up, he said.

“We think the Australian government is taking the right approach. We're asking the government to take a hard look at this. Australia has already done a lot of the legwork.”

There are about 3,100 print journalists in Canada, based on publishers' data. Implementing a similar code to Australia's would increase that by 700 journalists, the report estimates.

“A few hundred journalists might seem small in absolute terms, but relative to the number of journalists in Canada, these numbers are substantial.”

The federal government has been sending strong signals that reforms are on the way, but hasn't said what form a more equitable digital regulatory framework will take.

The Sept. 23 throne speech said web giants are “taking Canadians' money while imposing their own priorities,” and promised things will change.

“The government will act to ensure their revenue is shared more fairly with our creators and media, and will also require them to contribute to the creation, production, and distribution of our stories, on screen, in lyrics, in music, and in writing.”

The issue transcends typical ideological interpretations, Postmedia's MacLeod said.

“Australia is centre-right, France is centre-left. The main point is that governments around the world are addressing the inequities around big tech. Governments on the left and on the right are all taking steps.”

Meanwhile, Australia's experience suggests there could be a bumpy road ahead.

In late August, Facebook announced plans to block Australian users and publishers from sharing news on its platform.

In a message to YouTube creators, Google argued the proposed law prioritizes the traditional news industry over small content creators and the platforms where they can find an audience.

If Facebook made good on its threat to block links to websites, it would probably harm news organizations, said Carleton University journalism professor Christopher Waddell.

“They still get a fair amount of traffic from social media. If it gets yanked, it could have an effect on news organizations,” he said.

“They're in for a bit of a game of chicken.”

By working collectively, we can't get picked off one by one. The only chance we have is to stand together on this.