Digital giants Google and Meta are currently engaged in discussions with the government of Canada to de-escalate the tension that surfaced after the Online News Act, Bill C-18, was passed.
The bill was introduced after major media players, including the Toronto Star, raised concerns about the outsized power of digital giants in Canada.
It eeks to compel online platforms such as Meta and Google to negotiate deals with Canadian media publishers to pay them for the content they distribute and link to on their platforms. The Online News Act approved last month, and will come into effect by the end of 2023.
The basic issue is that digital giants are reluctant to pay up.
Canada goes head to head with digital giants
“We cannot continue paying advertising dollars to Meta while they refuse to pay their fair share to Canadian news organizations,” the Minister of Heritage, Pablo Rodriguez said in a tweet. The Canadian government also spends about $10 million CAD in total annually for advertising on Google and Metas, according to Rodriguez’ estimate.
On the other hand, Google’s President of Global Affairs Kent Walker said in an official statement that “we repeatedly offered constructive feedback by suggesting reasonable balanced amendments to Bill C-18 and recommended solutions that would have made it more workable for both platforms and publishers. None of our suggestions for changes to C-18 were accepted.”
Further, the company’s blog states that “Google doesn’t ‘use’ news content, we link you to it, just like we link you to every other page on the web.”
We should respect Walker’s view. but he does not accept that Google gets ads and makes money because of the publishers’ news content. It is a resource to earn profit.
Bill C-18 is not only about news publishers’ financial sustainability, but also about how digital advertising works and who gets the benefits. The Act seeks to level the playing field for all.
Further negotiations underway
The government showed some flexibility last week to bring Google and Facebook onside with its Online News Act, suggesting a few of regulations to address many of the digital giants’ concerns. They include setting a cap on how much the legislation would require Google and Meta to contribute to Canada’s news industry.
Existing commercial agreements between the digital giants and news organizations would also be discussed. The legislation suggests that agreements allocate an “appropriate portion” of compensation to news production, not just corporate heads.
How the digital giants respond to these suggested regulations will affect the sustainability of Canadian publications in the future. Most important is the availability of quality news to the public with a reasonable accommodation for news media publishers.
The Australian case
Australia was the first country in the world to introduce laws forcing digital giants to negotiate payments with the local media publishers after a battle between Google and the country’s consumer regulator.
Rodney Sims, Phd, an Australian economist and a professor, was the campaign’s leading man.
He designed Australia’s News Media Bargaining Code (NMBC), a guideline for media businesses to bargainwith digital giants on broadly equal terms. The NMBC has facilitated over $200 million in annual payments from Google and Meta to news media businesses in Australia.
Being the first, the Australian agreement does have some shortfalls. But an implementation of similar legislation in Canada can be improved by more discussion, also keeping in mind the differences in the Canadian context.
Canada needs a better solution
What is a permanent solution? What is the importance of contributing good quality news at a reasonable remuneration?
Recognizing the value of original news content, and the efforts involved in producing it, lies at the heart of a permanent solution to Canadian news media companies’ future stability.
There was a time when newspapers were the only source of information that could reach us the next morning, other than radio and a few TV sets in our homes. In the early 60’s, I remember myself waiting for the morning newspaper to see the latest score of the Cricket Test matches between Australia and England from the previous day.
Now, news companies are being sold and resold, or closing altogether. We are seeing a reduction in print copies and editions and unemployment of journalists, which have created serious economic problems.
The success of digital giants may result in the failure of those who produce news. These new temporary agreements won’t resolve the issue permanently. We need to explore other approaches and avenues to formulate a stable working relationship with all stakeholders involved. The solution also lies in subscribing more newspapers, and encouraging readership to give them a chance to grow.
With this approach the Canadian government can improve the deteriorating condition of newspapers and publishing houses.
I hope this dispute will be resolved with a positive outcome.
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