Facebook and Google are something that we use every day in our daily lives. We have received much information through these social media platforms and search engines. But at the same time, the traditional news industry is facing profound challenges with these platforms. Therefore, a new legislation was passed by The Canadian Parliament to balance the news industry and the online communications platforms as digital news intermediaries. Facebook (Meta) and Google fought back with the news ban strategy…who’s winning? Did it happen before?
So, What happened?
Recently, the Canadian government introduced the Online News Act (Bill C-18) in Canada. The new act requires technology companies to license Canada’s domestic news content. The acts aim to “enhance fairness in the Canadian digital news marketplace and contribute to its sustainability” (Online News Act, 2023).
With the new act, Meta and Google must voluntarily negotiate deals with news publishers and pay a portion of their global revenues first. If not, under the new act, a mandatory bargaining process will be overseen by the Canadian Radio-television and Telecommunications Commission (CRTC) (Shakil & Ljunggren, 2023).
There are three sections of the process under the act. First, bargaining sessions. If it fails to meet an argument, mediation sessions will kick in before the final offer of arbitration, which is the final offer (Katz, 2023).
Current situation in Canada
The Canadian government believes quality information is valuable, and Meta and Google are currently making money from it. Tech giants have the reasonability to carry quality information in journalism. However, Meta and Google believe the act is flawed. From the opening statement from Nick Clegg, President of Global Affairs at Meta, they admit that there is revenue from news content sharing on their social platform. Still, Meta believes it does not benefit unfairly from people sharing links to news content (Meta, 2023a). Therefore, Meta complies with the Online News Act in Canada to end news availability in Canada (Meta, 2023b). Meta claims the news ban is ultimately a business decision (Spencer Van Dyk, 2023).
On the other hand, from the statement by Kent Walker, the president of global affairs of Google and Alphabet, Google has also removed links to Canadian news from Search, News and Discover products in Canada to align with the Online News Act (Walker, 2023). Meta and Google both claim that the Online News Act in Canada is flawed legislation and have taken a similar strategy by stopping providing news information on their platform to users in Canada. Recently, the Canadian government responded to the news ban from Meta by suspending advertising on Facebook and Instagram. Canadian Heritage Minister Pablo Rodriguez says the news ban from Meta is unreasonable and irresponsible. (Spencer Van Dyk, 2023).
Sounds familiar? What about Australia?
Australia passed the News Media and Digital Platforms Mandatory Bargaining Code, which came into effect on 3 March 2021. It is a world-first initiative to balance the news businesses and digital platforms.
You might ask:
So, what is the code of conduct about?
It is the “mandatory code of conduct which governs commercial relationships between Australian news businesses and ‘designated’ digital platforms who benefit from a significant bargaining power imbalance.” (Australian Competition & Consumer Commission [ACCC], 2022). It is aimed to “address bargaining power imbalances to ensure that digital platforms fairly remunerate news businesses for the content they generate, thereby helping to sustain public interest journalism in Australia” (Department of the Treasury, 2022).
Under the legislation, the treasurer can designate specific digital platforms to follow the obligations under the code (ACCC, 2022). Currently, no digital platform have been designated. Facebook and Google have reached voluntary commercial agreements with many news media organisations in Australia, including news businesses on large and small scales and in metropolitan and regional areas (Department of the Treasury, 2022).
The code was created because Google and Facebook dominated the online advertising market in Australia, with an estimated AUD 3.48 billion loss inquired by ACCC in advertising between 2001 and 2016 (Carson, 2023). Carson (2023) pointed out that it is expected that AUD$200 million will benefit the Australian news businesses from Google and Meta per annum.
The news media ownership environment in Australia is concentrated with two leading corporates, Fairfax Media and News Corp Australia (Carson, 2023). At the beginning of the legislation, Meta created a news ban in Australia. Contents were limited for users to access. Facebook has banned news on their platform for ten days. And some of the essential emergency services information from its platform during a time when Australia was experiencing bushfires (Carson, 2023). Meta was criticised hard for its strategy. Google warned users in Australia that the code would severely disrupt the Google service at that time.
However, not all tech giants are against the bargaining code in Australia. For example, surprisingly, Microsoft is one of a few tech giants that fully supports Australia’s News Media Bargaining Code. Even though the business model for Microsoft is different from Google as the search engine in the Australian market and currently not designated by the Australian government, Microsoft is committed to complying with the code as Microsoft believes it creates a “fairer digital ecosystem for consumers, business, and society.” (“Microsoft Backs Australia’s New Media Bargaining Code,” 2021).
Result in Australia:
The review report highlights the agreements between digital platforms and news businesses without a code of conduct. More than 30 commercial agreements are made between digital platforms, Google and Meta, and a cross-section of news businesses. The report pointed out that those agreements were unlikely to have been made without the code. (Department of the Treasury, 2022)
Last year, Google participated in the Treasury’s consultation papers reviewing the News Media and Digital Platforms Mandatory Bargaining Code. Google have reached 23 commercial agreement (Department of the Treasury, n.d.) and 60 commercial partnerships with news businesses (Google, 2022). Moreover, Google (2022) claims that different tools and training have been developed and launched to support the digital transformation of Australian news businesses.
Compared to Canada and Australia, the Canadian government participate more in the bargaining process. Australian government give space for Meta and Google to reach an agreement before they take any action. That is also why there is no designation from the treasurer. Meta and Google are still far from actual government interventions and regulations.
Challenges but also new opportunities
Undoubtedly, the traditional news industry is facing profound challenges with the growth of digital platforms and the new norms for people’s access to news nowadays. However, it is also a gateway for news businesses to preserve and ensure high-quality journalism. Providing high-quality journalism will benefit digital platforms, especially Meta and Google, in gaining trust and reputation from the public—more business opportunities with more advertisement on the digital platform with a good reputation. The Online News Act provides a sustainable model for professional news and a solution to the out-of-control spread of misinformation and disinformation (“News Media Alliance Applauds Microsoft for Support of Australia Bargaining Code,” 2021).
With the success in Australia, the U.S. has introduced the Journalism Competition & Preservation Act to the House and Senate. Similarly, the aim is to “grant news publishers the ability to negotiate collectively with the tech platforms for fair compensation for use of their content” (“News Media Alliance Applauds Microsoft for Support of Australia Bargaining Code,” 2021). It creates enormous influence with the bargaining power from the state level to the international level.
Back in Australia, the Australian Broadcasting Corporation (ABC) is using its net revenue from the agreement with Google and Facebook to invest in supporting regional and rural public interest journalism like appointing reporters in specific regions, establishing mini bureaux, and expanding current bureaux (Australian Broadcasting Corporation, 2022). It means that ABC can provide more coverage and stories in rural areas and expand on specific topics for public interest for both the local community and national audiences in different areas of the country. From that, ABC can connect to the rural community and inspire the younger generation in rural areas by educating the community about journalism.
To conclude, with the success of the bargaining code in Australia, many countries try to follow by drafting legislation, including Canada. Canada and Australia have similar experiences in bargaining with digital platforms. It has been proven that making agreements with news businesses and digital platforms is possible and can create a long-term benefit for journalism.
No news is good news! Or is it?… by Samuel Kwan is licensed under CC BY-NC-ND 4.0
Australian Broadcasting Corporation. (2022). ABC submission to the Review of the News Media and Digital Platforms Mandatory Bargaining Code. https://treasury.gov.au/sites/default/files/2023-02/c2022-264356-abc.pdf
Australian Competition & Consumer Commission. (2022, May 2). News media bargaining code. https://www.accc.gov.au/by-industry/digital-platforms-and-services/news-media-bargaining-code/news-media-bargaining-code
Carson, A. (2023). Getting Facebook and Google to Pay for News: Explaining Australia’s News Media Bargaining Code. The Columbia Journal of Law & the Arts, 46(3). https://doi.org/10.52214/jla.v46i3.11233
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