A new report calls on Canada to follow Australia’s lead by compelling web giants Google and Facebook to provide struggling news organizations with a larger cut of digital-advertising revenue, but tech companies and experts don’t agree.
The report from News Media Canada, the lobby group representing most of Canada’s print and digital publishers (including Torstar, the parent company of iPolitics), said the two tech companies control 80 per cent of the digital-advertising market in Canada, and engage in “monopolistic practices” that leave news publishers unfairly compensated.
The organization said publishers are subject to Google and Facebook’s dominance of search engines and social media, whereby the web giants collect ad revenues while “free-riding” on the original content generated by news outlets that appears on the platforms.
Along with the use of complex algorithms and negotiating leverage, that gives web giants the power to decide, in their self-interest, which business models to use, said the report, published Thursday.
“They’ve been operating unconstrained, and abusing their power for two decades,” said Jaime Irving, vice-president of Brunswick News Publishing and chair of News Media Canada’s working group. “I don’t think it’s too dramatic to say the system cannot survive if all the levers of power are in the hands of one side.”
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Heritage Minister Steven Guilbeault says he’s working on a plan to compel digital giants to provide news media and artists a “fair share” of digital revenues. In last month’s speech from the throne, the federal Liberals also promised to make the tech firms contribute to the creation, production and distribution of original content.
“Web giants are taking Canadians’ money while imposing their own priorities,” Gov. Gen. Julie Payette read in the throne speech. “Things must change, and will change.”
News Media Canada recommends Canada does what Australia has done, particularly in allowing newspapers to form a collective bargaining unit to negotiate compensation for use of their content and intellectual property.
Australia’s plan, which is not yet law, will also create a code of conduct that would limit the ability of web giants to create new algorithms and other proprietary technology in order to expand their market control. Companies will be subject to stiff fines of up to hundreds of millions of dollars for some violations.
Brunswick News’ Irving said the plan would allow the newspaper industry to come together and “deal on equal footing with giant U.S. multinationals.”
The new rules’ introduction in Australia has sparked strong opposition, however. Last month, Facebook threatened to block Australians from sharing news on its platform if the regime is implemented. Google has also run a public campaign against the proposals, and paused its international $1-billion commitment to work with news publishers in Australia, saying it would not work under the new bargaining rules.
Meg Sinclair, head of communications for Facebook Canada, said the report “misrepresents the way that some of our products work.”
“News organizations in Canada choose to post their content on Facebook to reach prospective subscribers, monetize their content, and sell more advertising,” Sinclair said in an email.
Sabrina Geremia, vice-president of Google Canada, called the claim that her company owes hundreds of millions of dollars to the news industry “disappointingly unfounded.” Geremia added that Google sends five billion visits to Canadian publishers’ websites each year.
Michael Geist, Canada Research Chair in internet and e-commerce law at the University of Ottawa, said the Australian model is not the right approach.
“The reality is that the majority of Canadian news posts are posted by the organizations themselves,” he said. “And in doing so … it seems to me there’s pretty good value already coming back to those organizations, with the referral traffic that comes back.”
At the heart of the matter, Geist explained, is that consumers have gravitated toward a few services offering a lot of information, thus shifting advertising revenue away from many creators to a small handful of tech firms.
“How do you solve that? Well, I do think that we ought to be appropriately taxing the large platforms. So I do think both competition law and tax policy play a role here,” he said.
READ MORE: E-commerce law expert warns ‘link tax’ could hurt, not help publishers
In a statement, Guilbeault’s press secretary, Camille Gagné-Raynauld, said the report “underlines the market imbalance observed between those who create the content and those who benefit from its use and justifies the search for a solution.”
Gagné-Raynauld said the government is looking at models being adopted in other jurisdictions, including France and Australia, and is talking to experts about options for a made-in-Canada framework.
The report, titled “Levelling the Playing Field,” estimates that under Australia’s model, Canadian publishers could recover $620 million in revenues a year.
That would help reverse their dramatic losses; News Media Canada estimates publishers will lose $500 million to $600 million per year between 2019 and 2023. Implementing the regime would also save around 700 Canadian journalism jobs, the report said.
Guilbeault previously told iPolitics that the government needs to create a regulatory framework to enable Ottawa to impose fines on web giants if they don’t abide by the rules. The policy would allow royalties to be distributed directly to news organizations, based on tariffs established by the federal Copyright Board, instead of the government taxing web giants.
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source https://blog.jsa.digital/index.php/2020/10/22/like-australia-canada-should-force-web-giants-to-split-ad-dollars-with-news-media-report/
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