Tag: News Media

After Blocking News in Canada, Meta Challenges Australia (Again)

Image: Shutterstock via AI modification

It was inevitable. After Meta pulled the plug on news content on its platform in Canada as its way of complying with the obligations of the Online News Act, Australia, the model that Canada sought to emulate, was surely next in line. On March 1, Meta announced that it plans to stop paying publishers of news content in Australia, and will not renew its current agreements with Australian media once they expire. Most will expire this year.

Canada had modelled its Online News Act (Bill C-18) on Australia’s News Media Bargaining Code, albeit with “improvements”. Rod Sims, who was head of the Australian Competition and Consumer Commission (ACCC) at the time the Commission designed the Code (later incorporated into legislation as the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Act 2021), was invited to testify before the Canadian Parliamentary committee examining Bill C-18. In his testimony, Sims talked about the success of the Code, its benefits for not just large media players but also many smaller “country” outlets, estimating the benefits to be north of A$200 million per year to journalism in Australia. He added that the institution of the Code “has transformed the journalism landscape in Australia. It’s gone from pessimism to optimism.”

Inspired by the results of the Australian legislation (which, by the way, ended up not designating either Google or Facebook under the Code, since they managed to come to sufficient “voluntary” agreements with Australian media), Canada moved ahead, basing its legislation on the Australian law but adding a couple of additional features. One was to increase transparency with regard to deals that would be struck under the law. Another was to require self-designation by platforms (while making it apparent that only Meta/Facebook and Google) met the criteria, allowing them an exemption if they reached acceptable deals with media. In this way, the companies could not avoid designation and would be subject to the law, something they strongly opposed, even though both had already engaged in voluntary programs on their own terms to provide some financial support to selected media outlets.

Just as happened in Australia, (see “Google’s Latest “Stoush” with Australia: What’s the Lesson from Germany’s Failed Effort? and “Facebook in Australia: “READY, FIRE, AIM”) both platforms pushed back strongly against the draft legislation, threatening to block news for Canadian users. (Facebook briefly and disastrously blocked news for Australian users during its campaign against the Code, but ultimately backed down). First, in the fall of 2022 Facebook said it might have to block postings of news on its Canadian platform, followed by Google which  threatened to block search for Canadian news in Canada by Canadian users. By the summer of 2023, when the Online News Act became law without any of the amendments proposed by the platforms, Meta upped the ante by declaring that it would end news availability on Facebook and Instagram for all users in Canada prior to the Act taking effect, set for December 2023. Again, just as in Australia, Canadian government leaders were public in their condemnation, accusing Meta of threatening and irresponsible behaviour. Alas, it was all to no avail. It appears Meta had already made its decision to not provide financial support for news content in Canada, and to end the few existing agreements that it had undertaken in the past. At the time, it indicated it would also be taking similar action elsewhere. Rather than submit to the legislation by negotiating with media entities, it complied (in letter if not in spirit) by blocking links to Canadian media. Negotiations with Google continued and eventually a compromise of sorts was reached whereby Google agreed to contribute to a fund which would be used to support journalism in Canada.

This was a somewhat pyrrhic victory (the fund will be about $100 million, less than half what had previously been estimated), but a victory nonetheless in the eyes of at least some of the news media. One can debate the overall success of the legislation (see MediaPolicy.ca’s “The Online News Act is law: a buzzer-beater win or epic miscalculation?”), but along with more government financial support, the Google funded pot will be welcomed by many smaller media outfits. Ironically, establishing a fund rather than requiring negotiations between the platforms and media for payment for content was an early proposal by some commentators. Now this has come to pass more by accident than design. Criteria for disbursing from the fund have been tweaked so that broadcast media, and in particular the CBC, who employ the bulk of news journalists in the country, get less than their proportional share would otherwise indicate.

The lesson for Canada, and now for Australia, is that the big digital platforms will not hesitate to play hardball if they feel their global interests are threatened. While Australia, followed by Canada, was first off the mark with legislation designed to level the playing field between a stressed journalism sector and the monolithic platforms, the response of the platforms was governed more by potential precedent than the specifics of those markets. The existence of draft legislation at the federal level in the US, (the Journalism Competition and Preservation Act, aka JCPA) as well as at the state level in California and Illinois, has not escaped the attention of Meta and Google. (Even the watered-down compromise settlement that Google made with Canada has led to some lip-smacking speculation in the US as to the amount of funding that could flow to US media). It appears that Meta, in the face of cost cutting and loss of market share in 2022, had made a business decision that if it had to pay for access to news content, it would do without. To what extent this is a wise business decision remains to be seen, but the company has clearly made a business decision in this regard. This decision may or may not affect Meta’s bottom line, but it will have the effect of leaving the platform as a purveyor of less than reliable information from nonprofessional sources. However, doing the most socially responsible thing as opposed to maximizing profits by cutting costs is not what Meta is about.  Having made its decision, it will need to unwind its commitments to Australian media, which it is now in the process of doing.

What does this mean for Australia and what can the Australian government do about it? Writing about this in Canada’s National Post, Rod Sims, now professor at the Crawford School of Public Policy at ANU, outlined some choices the Australian government needs to face. It could move to designate Meta under the Bargaining Code and force it into the negotiation and arbitration process. That would likely lead to Meta taking precisely the action that it took in Canada. The government could amend the legislation, but to what end? It could publicly criticize Meta, accusing it of unfairness and bad behaviour. It has already done this, with Prime Minister Albanese saying that what Meta is doing is “not the Australian way”. That will have zero influence on Mark Zuckerberg and the people who run Meta.

At the end of the day, Australia can stand up to Meta, and let the chips fall as they may, or it can allow Meta to free ride on Australian news content, accepting that there may be social benefits in allowing this to happen. A recent report by the Australian Broadcasting Commission (ABC) points out that Facebook is the largest social media platform for general news and half of Facebook’s users in Australia report using the social media platform for news. (Regardless of this, Meta’s beancounters give news no value to the platform). According to a University of Canberra report cited by ABC, 45% of Australians get their news from social media as opposed to less than 20% from print sources. The largest source of news is still TV at 58%. (The numbers are greater than 100 because many consumers get their news from more than one source).  In one sampling, 14% of Australians got their news from Instagram! While I find this personally appalling (indirectly revealing my age), that is the reality of our society today. Better that consumers find reliable, curated news somewhere–but we still need to recognize that responsible journalism needs to be paid for. Meta, apparently, has no desire to be a part of that equation. Without the infusion of responsible, curated journalism, Facebook will become an even greater home for misinformation than it already is. But does Meta care? Clearly not. Consumers need to be encouraged to find their news sources elsewhere. Easier said than done.

The Australian government is no doubt pondering how to respond in the best interest of Australia. Allowing Meta to wriggle out from its obligations under the Bargaining Code would not necessarily undermine the deals struck with Google, who appears to have accepted that its overall interest is best served by some form of accommodation. Having Microsoft, which has publicly stated it is willing to subject itself to both the Australian and Canadian legislation, breathing down its neck is undoubtedly a factor in this. Even if the Google deal won’t be undone, it is still galling that Meta can get away with it. Canada had to swallow that reality, yet stood up to Meta. What will Australia do? It’s a tough call.

© Hugh Stephens, 2024. All Rights Reserved

When Giants Wrestle, the Earth Moves (NYT v OpenAI/Microsoft)

Image:www.shutterstock.com

There is no better way to start out the New Year, 2024, with a commentary on Artificial Intelligence (AI) and copyright. It was the big emerging issue in 2023 and is going to be even bigger in 2024. The unlicensed and unauthorized reproduction of copyright-protected material to train AI “machines”, in the process often producing content that directly competes in the market with the original material, is the Achilles heel of AI development. To date, no one knows if it is legal to do so, in the US or elsewhere, as the issue is still before the courts. The cases brought to date by artists, writers and image content purveyors like Getty Images have not always been the strongest or best thought out. In one instance, the plaintiffs had not even registered the copyright on some of the works for which they were claiming infringement, a fatal flaw in the US where registration is a sine qua non in order to bring an infringement case. That may have been the most egregious example of a rookie error but in general the artists’ and writers’ cases have not gone too well so far, although the process continues. Some cases are on stronger grounds than others. Here is a good summary. The Getty Images case will be an interesting one to watch. And now the New York Times has weighed in with a billion-dollar suit against Open AI, and Microsoft. The big guys are now at the table and the sleeves are rolled up. The giants are wrestling.

What is at issue could be nothing less than the survival of the news media and the ability of individual creators to protect and monetize their work. It could also open a pathway to legitimacy for the burgeoning AI industry. The ultimate solution is surely not to put a halt to AI development, nor to put content creators out of business. It is to find a modus vivendi between the needs of AI developers to ingest content in order to train algorithms that will “create” (sort of) content–assembled from vast swathes of input–and the rights of content creators. While training sets are generally very large, some of the input can be very creator-specific and the output very creator-competitive. This is where the New York Times comes in.

The Times, like any enterprise, needs to be paid for the content it creates in order to stay in business and create yet more content. If its expensively acquired “product”, whether news, lifestyle, cooking, book reviews or any of the other content that Times’ readers crave and are willing to pay for, can be obtained for free through an AI algorithm (“What is the most popular brunch recipe in the NYT using eggs, bacon and spinach”, or “What does Thomas Friedman think of…..”), this creates a huge disincentive to go to the source and undermines journalism’s business model, already under severe stress and threat.

The Times is one of the few journals that has managed to thrive, relatively speaking, in the new digital age at a time when many of its competitors are dying on the vine. According to Press Gazette, the New York Times is the leading paywalled news publisher, with 9.4 million subscribers. (Wall Street Journal and Washington Post are numbers two and three respectively). You need to pay to read the Times, and why not? But paying for access does not give you the right to copy the content, especially for commercial purposes. (The Times offers various licensing agreements for reproduction of its content, with cost dependent on use). Technically, all it takes is one subscription from OpenAI and the content of the Times is laid bare to the reproduction machines, the “large language models”, or LLMs, used by the AI developers. The Times has now thrown down the gauntlet. Its legal complaint, 69 pages long, makes compelling reading. If there ever was a “smoking gun” putting the spotlight directly on the holus-bolus copying and ingestion of copyright protected proprietary content in order to produce an unfair directly-competing commercial product that harms the original source, this is it. It’s a far cry from earlier copyright infringement cases brought by some artists and writers.

While you can read the complaint yourself if you are interested (recommended reading), let me tease out a few of the highlights. After setting out the well-proven case for the excellence of its journalism, the Times’ complaint notes that while the defendants engaged in widespread copying from many sources, they gave Times’ content particular emphasis when building their LLMs, thus revealing a preference that recognized the value of that content. The result was a free ride on the journalism produced at great expense by the Times, using Times’ content to build “substitutive products” without permission or payment.

Not only does ChatGPT at times regurgitate the Times’ content verbatim, or closely summarizes it while mimicking its style, at other times it wrongly attributes false information to the Times. This is referred to in AI circles as “hallucination”, something the complaint labels misinformation that undermines the credibility of the Times’ reporting and reputation. Hallucination is a particularly dangerous element of AI produced content. Rather than admitting it doesn’t know the answer, the AI algorithm simply makes it up, complete with false references and attributions all of which make it very difficult for the average reader to separate fact from fiction. This misinformation is the basis of the Times’ complaint for trademark dilution that accompanies various other copyright related complaints of infringement. Concrete examples of such misinformation are provided in the complaint.

So too is ample evidence of users exploiting ChatGPT to pierce the Times’ paywall, by asking for the completion of stories that have been blocked for non-subscribers. There are concrete examples of carefully researched restaurant and product reviews that have been replicated virtually verbatim. Not only is the Times’ subscription model undermined, but the value it derives from reader-linked product referrals from its own platform bleeds to Bing when the product is accessed through Microsoft Search enabled by ChatGPT. Examples are given of full news articles based on extensive Times’ investigative reporting being reproduced by ChatGPT, with only the slightest variations. These are not composite news reports of what is happening in Gaza, for example, but a word-for- word lifting of a Times’ analysis of what Hamas knew about Israeli military intelligence. The Times’ complaint makes for chilling reading. AI’s hand has been caught firmly in the cookie jar.

What does the Times want out of all of this? The complaint does not specify a dollar amount, while noting the billions in increased valuation that has accrued to OpenAI and Microsoft as a result of ChatGPT. However, it asks for statutory and compensatory damages, “restitution, disgorgement, and any other relief that may be permitted by law or equity” as well as destruction of all LLM models incorporating New York Times’ content, plus, of course, costs. If the Times gets its way, this will be a huge setback for AI development as well as for OpenAI and Microsoft, but of course it may not come to that. The complaint notes that the Times had tried to reach a licensing deal with the defendants. OpenAI cried foul, expressing “disappointment”, and noting that they had been having “productive” and “constructive” discussions with the Times over licensing content. However, to me this is a bit like stealing the cookies, getting caught red-handed and offering to negotiate to pay for them, then crying foul when your offer is rebuffed. The Times has just massively upped the ante, making the potential licensing fees much more valuable.

The irony is that the use of NYT material by OpenAI or indeed other platforms like Google or Facebook potentially brings some advantage and drives some business to the Times, while obviously also providing commercial benefits to the AI program, search engines or social media platforms. The real question will be how that proprietary content is used, and how much is paid to use it. A similar issue is being played out in another context, most recently in Canada with Bill C-18 where news media content providers wanted the big platforms (Google and Meta/Facebook) that derive benefit from using or indexing that content to pay for accessing it. The result in Canada was both a standoff and a compromise. Facebook blocked Canadian news content rather than pay for it, while Google agreed to create a fund for access by the news media in return for being exempted from the Canadian legislation.

The NYT-OpenAI/Microsoft lawsuit is a different iteration of the same principle. Businesses that gain commercial advantage from using proprietary content of others should contribute to the creation of that content, either through licensing or some other means such as a media fund. The most logical outcome of the Times’ lawsuit is almost certainly going to be a licensing agreement. Given the seemingly unstoppable wave of AI development, meaningful licensing agreements would seem to be the best way to ensure fairness and balance of interests going forward.  

A Goliath like the New York Times is in a much better position to make this happen than a disparate group of writers and artists. Indeed, there are logistical challenges in being able to license the works of tens of thousands of content creators. In an earlier blog post, I postulated that perhaps copyright collectives might find a role for themselves in this area in future. In my view, ultimately the only logical solution to the conundrum of respecting rights-holders while facilitating the development of AI is to find common ground through fair and balanced licensing solutions. The wrestling giants of the NYT and Microsoft may help show the way.

© Hugh Stephens 2024. All Rights Reserved.