Barring an unlikely political turnaround or business climb in the coming days, there will soon be headlines about how Big Tech clashes with a sovereign nation over demands it pay to support a local news industry.
Canada’s parliament is on track to finalize a bill that would force major internet platforms to pay news publishers for linking to their content, with a conclusion expected late next week. This would make it the first country to follow the lead set by Australia’s News Media Bargaining Code three years ago.
In Australia, last-minute law changes averted a threat from Google and Meta to stop their services from showing links to stories from local news outlets. This time, the chances of a compromise seem smaller.
If the goal in Australia was to create a stronger financial foundation for a struggling news industry, then the outcome was messy. It led Google and Meta to strike private deals with media companies. The terms of those deals have never been made public, making it difficult to assess how the money has been used or what the overall impact on the Australian news industry has been.
Canada’s approach to the problem looks like the nation will avoid those shortcomings, but the outcome could be worse for internet users and news publishers alike, with Meta and Google paving the way for cutting news links from their services in the country.
As in Australia, public debate on the issue has been marred by rhetoric portraying the tech companies as predatory bullies. There may be a reason for a country to look for ways to support a struggling news industry, as well as taxing a group of highly profitable tech companies to provide the money. But that doesn’t mean technology has somehow pillaged the local news business.
Canada has justified its planned law on the grounds that it will lead to “honestly” revenue sharing between the technology and media companies, suggesting that the current arrangement is somehow unfair. The major technology platforms have certainly benefited from including links to news in their services. But this has not come at the expense of publishers, who benefit from the traffic it generates.
It’s not that Google and Facebook piggybacked on the news industry’s valuable content for free, but that they were part of a relentlessly disruptive wave of technology that undermined the industry’s economic value. Whatever the economic realities, political pragmatism came out on top in Australia.
Canada’s new law, on the other hand, would impose arbitration on companies rather than allowing commercial negotiations. The tech companies complain that it would also expose them to unlimited liability for “disadvantaging” news companies, something that would make it difficult to prioritize the most reliable news over lower quality content. The law would apply more widely than in Australia, to any organization with at least two journalists, and even to businesses that aren’t online.
It may be that the tech companies eventually decide to swallow these and other provisions, but the omens are not good. Facebook and Instagram tested blocking news links for some users in Canada last week, following a similar Google test earlier this year. The tests felt like brinkmanship, leading Prime Minister Justin Trudeau last week to accuse the companies of “bullying tactics”.
As Canada heads for confrontation, the long history of clashes between the news industry and Big Tech shows that there are other, less confrontational solutions.
Spain’s attempt to force Google to pay publishers led to the closure of Google News there in 2014. But the service was reinstated last year after the European Copyright Directive made legislative changes allowing publishers to be paid for short “snippets” of news.
The directive has led to deals with publishers across Europe. Google has also been experimenting with new formats, sharing revenue with publishers: The News Showcase, which gives publishers more control over how their content is displayed, is now spread across 22 countries, including Canada.
It has also proposed creating a fund in Canada for the tech companies to contribute to support initiatives designed to help local publishers – a much cleaner way to use tech profits to subsidize digital transformation in the news industry. But as political opposition to the tech companies hardens, it seems the time for compromise has passed.
richard.waters@ft.com
