Short of an unlikely political U-turn or corporate climbdown in the next few days, there will soon be headlines about how Big Tech is clashing with a sovereign nation over demands that it pay up to support a local news industry.
Canada’s parliament is moving swiftly towards finalising a law that would force the big internet platforms to pay news publishers for linking to their content, with a conclusion expected by the end of next week. That 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 changes to the law averted a threat from Google and Meta to prevent their services there showing links to stories from local news publishers. This time, the chances of a compromise look slimmer.
If the aim in Australia was to create a stronger financial foundation for a struggling news industry, 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 was used or what the overall impact on the Australian news industry has been.
Canada’s approach to the issue looks like the nation will avoid those shortcomings, but the outcome could end up being worse for both internet users and news publishers, with Meta and Google preparing the ground for excising news links from their services in the country.
As in Australia, public debate over the issue has been distorted by rhetoric that depicts the tech companies as rapacious bullies. There may be a case for a country to seek ways to support a struggling news industry, and for taxing a group of highly profitable tech companies to provide the cash. But that doesn’t mean tech has somehow plundered the local news business.
Canada has justified its planned law on the grounds that it will lead to “fair” revenue sharing between the tech and media companies, suggesting that the current arrangement is in some way unfair. The big tech platforms have certainly benefited from including links to news in their services. But this hasn’t come at the expense of the publishers, who profit from the traffic this generates.
It isn’t that Google and Facebook enjoyed a free ride on the backs of the news industry’s valuable content, so much as that they were part of a brutally disruptive wave of technology that undermined the sector’s economic worth. Whatever the economic reality, however, political pragmatism came out on top in Australia.
Canada’s new law, by contrast, would force arbitration on companies, rather than allowing for commercial negotiation. The tech companies complain that it would also expose them to an open-ended liability for “disadvantaging” any news business, something that would make it hard to prioritise the most reliable news over lower-quality content. The law would apply more widely than in Australia, to any organisation with at least two journalists, and even to companies that aren’t online.
It may be that the tech companies will eventually decide to stomach these and other provisions, but the signs are not good. Facebook and Instagram last week tested blocking news links for some users in Canada, following a similar Google test earlier in the year. The tests felt like brinkmanship, leading prime minister Justin Trudeau last week to accuse the companies of “bullying tactics”.
As Canada heads for a showdown, the long history of the news industry’s clashes with Big Tech show 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 Europe’s Copyright Directive brought changes in the law that created a way for publishers to be paid for short “snippets” of news.
The directive has led to deals with publishers across Europe. Google has also experimented with new formats, sharing revenue with publishers: Its News Showcase, which gives publishers more control over how their content is displayed, has now spread to 22 countries, including Canada.
It has also proposed establishing a fund in Canada that the tech companies could pay into to back initiatives designed to help local publishers — a far cleaner way to use tech profits to subsidise digital transformation in the news industry. But with political opposition to the tech companies hardening, it looks like the time for compromise is over.
richard.waters@ft.com
