Additional Piece: The Impact of Big Tech on the News Industry and the Need for Collaboration
Introduction:
The ongoing debate between big tech companies and the news industry has taken center stage in recent years. As governments around the world grapple with the question of how to regulate and ensure fair compensation for news publishers, Canada is now poised to become the next country to take a bold step in this direction. While the intention behind Canada’s planned law is to promote “right” revenue sharing between tech and media companies, it has sparked concerns about potential consequences for both internet users and news publishers. In this article, we will explore the implications of this law, compare it to Australia’s experience, and discuss the need for collaboration between big tech and the news industry to ensure a sustainable future for journalism.
The Australian Experience:
Australia’s Media Contracting Code, which came into effect three years ago, sought to address the financial struggles of the news industry by forcing major internet platforms to pay news publishers for linking to their content. However, the implementation of this law led to unforeseen challenges. Google and Meta (formerly Facebook) initially threatened to stop their services from displaying links to stories from local news publishers. Although last-minute changes to the law averted this outcome, the terms of the private deals struck between Google, Meta, and media companies have not been made public. This lack of transparency makes it challenging to assess the overall impact on Australia’s news industry. While the goal of creating a stronger financial foundation for the struggling information industry was noble, the execution has been anything but smooth.
The Canadian Approach:
Taking cues from Australia’s experience, Canada’s parliament is now in the final stages of passing a law that would also require tech giants to pay news publishers for linking to their content. However, the Canadian law goes further than its Australian counterpart. It would mandate arbitration for companies instead of allowing commercial negotiations, potentially leaving tech companies exposed to unlimited liability for any news activity. Moreover, the law would apply broadly to any organization with at least two journalists, even including offline businesses. This approach has sparked concerns among big tech platforms, particularly Meta and Google, who have already started testing the removal of news links from their services in Canada.
The Rhetoric and Reality:
One of the common themes in the public debate surrounding this issue is the portrayal of big tech companies as rapacious bullies. While it may make sense for a country to explore ways to support a struggling news industry and tax profitable technology companies for cash, it is unfair to label technology as the sole cause of the local news business’s decline. The disruption caused by the digital revolution changed the economic landscape for many industries, including the news industry. Google and Facebook were not simply enjoying a free ride on the backs of valuable news content; they were part of a wave of disruptive technology that altered the industry’s traditional business models. It is essential to acknowledge the economic reality while also recognizing the value that tech companies bring by including news links in their services.
Collaborative Solutions:
As Canada moves toward a potential showdown with big tech companies, it is important to consider alternative, less confrontational solutions that can ensure a sustainable future for the news industry. Spain’s attempt to force Google to pay publishers resulted in the closure of Google News in 2014. However, the service was reinstated last year after changes to the European copyright directive provided a way for publishers to receive payment for news snippets. This led to agreements between Google and publishers across Europe. Google has also experimented with revenue-sharing models, such as its News Showcase, which gives publishers more control over how their content is displayed.
Conclusion: Balancing the Needs of Both Sides
In conclusion, the ongoing clash between big tech and the news industry is not a simple matter of right versus wrong. It is a complex issue that requires careful consideration and collaboration to find a mutually beneficial solution. Canada’s attempt to regulate big tech by mandating arbitration and unlimited liability may have unintended consequences, potentially harming both internet users and news publishers. While it is crucial to ensure fair compensation for news publishers, it is equally important to recognize the value that tech companies bring to the industry. Finding a middle ground that encourages collaboration, transparency, and innovation is key to building a sustainable future for journalism. Through open dialogue and creative solutions, the news industry and big tech can work together to navigate the challenges of the digital age and ensure the continued availability of quality news for the public.
Summary:
Canada is poised to become the next country to pass a law that would require major tech platforms to pay news publishers for linking to their content. Modeled after Australia’s Media Contracting Code, the Canadian law aims to address the financial struggles of the news industry. However, concerns have been raised about the potential consequences for internet users and news publishers alike. The Australian experience has shown that implementation challenges and lack of transparency can complicate the goal of creating a stronger financial foundation for the struggling information industry. The Canadian law goes further by mandating arbitration and exposing tech companies to unlimited liability. The public debate surrounding this issue often portrays tech companies as rapacious bullies, but it is essential to acknowledge the disruptive nature of technology and the changing economic landscape. Collaborative solutions, such as revenue-sharing models and more transparent agreements, are crucial to finding a sustainable future for journalism. Balancing the needs of both big tech and the news industry is key to ensuring fair compensation for publishers while recognizing the value that tech companies bring to the industry. Through open dialogue and creative solutions, the challenges posed by the digital age can be navigated, and a sustainable future for journalism can be built.
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Barring an unlikely political u-turn or corporate meltdown in the next few days, there will soon be headlines about how Big Tech is pitting against a sovereign nation over demands that it pay to prop up a local news industry.
Canada’s parliament is moving fast towards finalizing a law that would force major internet platforms to pay news publishers to link to their content, with completion expected by the end of next week. This would make it the first country to follow Australia’s lead Media Contracting Code three years ago.
In Australia, last-minute changes to the law have averted threats from Google and Meta to stop their services from showing links to stories from local news publishers. This time around, the chances of a compromise seem slimmer.
If the goal in Australia was to create a stronger financial foundation for a struggling information industry, the result has been messy. It led to Google and Meta making 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 has been on Australia’s news industry.
Canada’s approach to the issue looks like the nation will avoid such shortages, but the outcome could end up being worse for internet users and news publishers alike, with Meta and Google preparing the ground to drop news links from their services in the country.
As in Australia, public debate on the issue has been distorted by rhetoric that portrays tech companies as rapacious bullies. It might make sense for a country to look for ways to prop up a struggling information industry and tax a group of highly profitable technology companies to provide cash. But that doesn’t mean that technology has somehow pillaged the local news business.
Canada has justified its planned law on the grounds that it will lead to “Right” revenue sharing between tech and media companies, suggesting the current arrangement is somewhat unfair. Big tech platforms have certainly benefited from including news links in their services. But this has not come at the expense of publishers, who profit from the traffic generated.
It’s not that Google and Facebook enjoyed a free ride on the backs of the information industry’s valuable content, so much as they were part of a wave of brutally disruptive technology that undermined the industry’s economic value. Whatever the economic reality, however, political pragmatism has won out in Australia.
The new Canadian law, by contrast, would mandate arbitration for companies, rather than allow commercial negotiations. Tech companies complain that it would also expose them to unlimited liability for the “downside” of any news activity, something that would make it difficult to prioritize more reliable news over lower-quality content. The law would apply more broadly than in Australia, to any organization with at least two journalists and even businesses that are offline.
It may be that tech companies eventually decide to accept these and other provisions, but the signs are not good. Facebook and Instagram last week tested block news links for some users in Canada, following a similar Google test earlier this year. The tests seemed like a calculated risk, leading Prime Minister Justin Trudeau last week to accuse the companies of “bullying tactics”.
As Canada moves towards a showdown, the news industry’s long history of clashes with 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 in 2014. But the service was brought back last year after the European copyright directive made changes to the law that created a way for publishers to get paid for short “snippets” of news.
The directive led to agreements with publishers across Europe. Google has also been experimenting with new formats, sharing revenue with publishers: Its News Showcase, which gives publishers more control over how their content is displayed, has now rolled out to 22 countries, including Canada.
He also proposed setting up a fund in Canada that tech companies could fund 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 with political opposition to tech companies stiffening, it seems the time for compromise is over.
richard.waters@ft.com
https://www.ft.com/content/384f970b-4a4b-4c91-8698-66a54b9086f6
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