An Open Letter to Justin Trudeau: Canada’s News Publishers up the Pressure on Facebook and Google

Source: National Post

I was at my local newsstand the other day, perusing the morning papers. My usual modus operandi is to scan them quickly, deciding which catchy headline will entice me to swipe my credit card for my daily “news fix” delivered in that most traditional of formats, the daily newspaper. The kind you can put under your arm and open up over the breakfast table, with a coffee. Usually I riff through each of the major local papers—under the steely eye of the proprietor—before I make my choice. But on Wednesday, June 9, all the papers (save one) had the same front-page. It was an open letter to Prime Minister Justin Trudeau, and this (in part) is what it said;

“For months, you…have promised action to rein in the predatory monopoly practices of Google and Facebook against Canadian news media. But so far, all we’ve gotten is talk. And with every passing week, that talk grows hollower and hollower. As you know, the two web giants are using their control of the internet and their highly sophisticated algorithms to divert 80 per cent of all online advertising revenue in Canada. And they are distributing the work of professional journalists across the country without compensation.

This isn’t just a Canadian problem. Google and Facebook are using their monopoly powers in the same way throughout the world — choking off journalism from the financial resources it needs to survive. The difference is that other countries are putting their foot down. (here the open letter mentions Australia, where recent legislative action was taken to bring the internet giants to heel. See my blogs “Google’s Latest “Stoush” With Australia” and “Facebook in Australia: READY, FIRE, AIM”.) The letter continues;

Time and again, you and your government have committed to similar action…But after months of promises, there is still no legislation…words alone will not sustain Canadian journalists through the long months of legislative inaction and relentless power plays by Google and Facebook.

To put it bluntly, that means that you, Prime Minister, need to keep your word: to introduce legislation to break the Google/Facebook stranglehold on news before the summer recess. It’s about political will — and promised action…The fate of news media in Canada depends on it. In no small way, so too does the fate of our democracy.”

Wow. Strong stuff. “The fate of our democracy”. The language may sound a bit purple but the parlous state of the traditional news media in Canada as elsewhere is a very real concern for good governance given the traditional role of the media in holding government to account. It is not for nothing that the motto of the Washington Post is “Democracy dies in darkness”, or that one of Winston Churchill’s better known quotes (1949) goes like this; “A free press is the unsleeping guardian of every other right that free men prize; it is the most dangerous foe of tyranny.” 

The explosion of digital media has led to a proliferation of “fake news” and self-serving echo chambers where conspiracy theories are peddled to those who want to believe. Responsible, professional journalism is the antidote, and it is actually positive that the digital platforms pick up and distribute stories from the mainstream media alongside much of the user-generated piffle that dominates the internet. The problem is the platforms are averse to paying for it, yet someone has to pay for quality journalism. In the past, despite subscription revenue, that task largely fell to advertisers. But now most advertising goes to the internet platforms. They in turn attract the viewers that advertisers want to reach with content; other people’s content, such as that produced by the news media.

The solution advanced in Australia, France (“Holding Google to Account: France Takes a Stand”) and soon, potentially, Canada is to convince the platforms that it is in their interest to “share the wealth” to some extent. But why should they—unless they are pressured to do so? That is what happened in both France and Australia where the government leveraged its competition laws to require large platforms enjoying quasi-monopolistic market power (read Facebook and Google) to come to revenue sharing agreement with publishers, failing which government regulators would step in.

The platforms were at first reluctant to do so, and only grudgingly opened negotiations. In the case of Google in Australia, it opened its wallet and then quickly put it away because the Australian government refused to withdraw its legislation. Google then threatened to withdraw from the Australian market, a threat that was only shown to be hollow when Microsoft offered to fill the void. As for Facebook, its clumsy effort to blackmail the Australian population and government by cutting off Australian news sources backfired, and the company soon managed to make a deal with the major Australian publishers. In France, Google dragged its feet but eventually came around to finding a way to share revenue in a way that satisfied most of the major French publishers and was acceptable to Google.

All these developments were being watched carefully in Canada by Heritage Minister Steven Guilbeault who undertook to bring in legislation in Canada to tackle the same issue. However, Guilbeault has several pieces of legislation on his plate; amendments to the Broadcasting Act (Bill C-10) to bring digital streaming services under the auspices of the broadcasting and telecoms regulator, the CRTC, “online harms” legislation to control sexual exploitation of children, hate speech and incitement to violence among other harms, including site-blocking provisions to deal with offshore websites dispensing harmful content, as well as the legislation to deal with the issue of payment for use of news content. Because of this legislative overload, things have got bogged down, and to date only the broadcasting legislation has been introduced into Parliament. And it is getting a rough ride. As for the online harms bill, although not yet introduced, the tragic events of the last few days in London, Ont, where a Muslim family was targeted in a horrific hate crime, will give that legislation added impetus.

With regard to Bill C-10, as a result of concern that a blanket exemption for user-generated content (UGC) would defeat the main purpose of the legislation, an amendment was introduced that has become the focal point for opposition to the bill. The main opposition party, the Conservatives, has engaged in delaying tactics that has forced the government, with support from smaller opposition parties, to bring in time allocation measures to limit debate. The fundamental issue is that the clock is running out. Parliament is set to rise on June 23 for the summer and it is widely expected that there could be a general election in the fall, if the COVID-19 situation is brought under control.

The Liberals would love the opportunity to win a majority and get out from under the current situation where they need to rely on at least one of the opposition parties to pass legislation. Of course, it will all depend on the public opinion polls. The Liberals won’t want to try to trigger an election unless their polling shows they can improve on their current seat count. (They won 157 of 338 seats in the 2019 election–with 170 needed for a majority. They currently have 155 seats after three members were kicked out of caucus for various reasons and one Green Party member crossed the floor to join the Liberals.) The opposition parties will also be reading the polls to decide if they want to go to the electorate.

What all this means is that the promised legislation to require the platforms to pay for using news content looks as if it will get the squeeze. Facebook and Google are not waiting for the legislation but rather are trying to head it off by launching their own payment-for-news initiatives. Although it rejected Australia-type news payment rules back in March, Facebook has since announced that it has struck content deals with 14 Canadian news providers. With the exception of the Winnipeg Free Press and French language paper Le Devoir, the others are minor or niche publications like the Coast, the Narwhal, Village Media, the SaltWire Network, the Sprawl, Discourse Media, Narcity, BlogTO and Daily Hive. Not exactly household names in Canada. Google, too, has its own offering called the Google News Initiative which, among other things, provides training for journalists and sustains some journalist positions. Google has also reached revenue sharing deals with some media outlets but, as with Facebook, its initial deals were largely with minor players. It was not until the Australian and French governments started to play hardball that Google had the incentive to reach deals with the major publishers.

That is exactly what is happening in Canada. Facebook and Google are prepared to throw a few pennies in the direction of Canadian media but, from the perspective of News Media Canada-NMC (formerly the Canadian Newspaper Association), leverage in the form of legislation will be required to get them to offer meaningful revenue-sharing. Back in the fall of 2020, NMC published a detailed study “Levelling the Digital Playing Field” that strongly advocated for an Australian-type competitive negotiating framework, backed up with regulatory muscle. News Media Canada was the sponsor of the June 9 open letter to Justin Trudeau as well as an earlier effort back in February when a number of newspapers published blank front pages, the message being that news could disappear if something is not done to level the playing field.

The June open letter calls on the government to introduce news payment legislation before the impending summer recess. That is unlikely to happen and even if it does, the legislation will die before enactment assuming an election takes place in the fall. However, the letter is important as part of the tactics to maintain pressure on both the government and the platforms. If the platforms think that the legislation is dead, and that their payment offerings to date will carry the day, Canadian publishers will not see the kind of money they feel they need to be able to continue to function. In commenting on Facebook’s announced deal-making with some small Canadian media business, News Media Canada commented that “Until all news media in this country can negotiate collectively with Google and Facebook, the two multinationals will continue to use their market dominance to drive terms that are in their interests.”

Collective negotiation does not just mean the ability for media to negotiate as an industry without running afoul of competition legislation (an exemption in the US for just such a scenario, the Journalism Competition and Preservation Act, has been floating around Congress for a couple of years now) but would also include an obligation on the platforms to negotiate with the media industry collectively as was proposed in the Australian legislation. (In the end it was not applied to Facebook and Google in Australia because suddenly, magically, they were able to strike deals before the hammer of the legislation was applied to them).

The open letter is but another shot in the ongoing war between the publishers and platforms. The outcome is almost certainly going to be something similar to the arrangements reached in Australia and France. The only issue will be the amount of revenue-sharing, and who will be included. Experience has shown that achieving an outcome that meets the needs of the creators of news content requires government action, or a realistic possibility of government action. Without legislation, the platforms hold the strong cards. Even though the prospect of legislation in Canada to require payment for use of news content is fading as quickly as the last days of the current Parliamentary session tick by, it is essential for the publishers to retain legislation as a realistic future possibility. They need this in order to have sufficient negotiating leverage with Facebook and Google to reach a deal that keeps quality professional journalism alive in Canada.

I hope they succeed or else, one day when I go to the newsstand, there will be nothing to read—or perhaps there won’t even be a newsstand.

© Hugh Stephens 2021. All Rights Reserved.

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