The demand for credible, trustworthy journalism has never been higher. Yet the companies that produce exactly that type of content have never faced such financial pressure.
This paradox is at the heart of a new call by Canada’s leading news publishers for government action to challenge the monopoly power of the biggest digital platforms, Google and Facebook, and make them share the money they earn by posting news content.
The report from News Media Canada, called “Levelling the Digital Playing Field,” makes a compelling case that Google and Facebook have used their monopoly power to distort the market and force publishers to accept unfair terms for use of their content. The digital giants, it says, have been “accessing the publishers’ content, audience, and data without transparency or compensation.”
It all adds up to a big rip-off: Google and Facebook together are creaming off more than three-quarters of digital ad revenues in Canada, leaving the companies that pay millions to produce that trusted, credible journalism (including Torstar, publisher of the Toronto Star) scraping by on the leavings.
The result is there for all to see. Scores of newspapers have closed across the country; the survivors have been forced to lay off hundreds of journalists and other employees.
This is not just a private tragedy for the news industry and those who work in it. It’s a crisis for our public life and for democracy itself, which relies on citizens having access to substantive, independent information about everything from government to business, education and the justice system. When that kind of news coverage shrinks or disappears, we’re all losers.
The Trudeau government has been talking about taking action to stem these losses, and it’s now time for it to act.
Steven Guilbeault, the heritage minister, said in September that he’s been following the issue, and summarized it like this: “It’s about levelling the playing field. Those who benefit from the Canadian ecosystem must also contribute to it… That includes making sure that Canadian news organizations continue to inform and empower our communities.”
Guilbeault’s words could have been lifted from the News Media Canada report. It provides a blueprint for action that the government should adopt.
Its key recommendation is that the government follow the approach taken by Australia, which faces very similar challenges to its news media from Facebook and Google. The government there has proposed allowing news publishers to band together and bargain collectively with the digital giants to get compensation for use of their content.
It would also impose a code of conduct on the web monopolies and provide for substantial fines if they don’t bargain in good faith or try to penalize the publishers for pushing back.
News Media Canada proposes other changes to rein in the power of Big Tech and address the “market failure” created by their monopoly (or more precisely, duopoly) power in the areas of search and social media. That would indeed go a long way toward “levelling the playing field.”
Its report estimates that an Australian-type regime in Canada would allow news publishers to recover about $620 million in ad revenue a year that’s now going to swell the bottom lines of Google and Facebook.
That would make up most of the revenue losses the publishers are expected to suffer in the next few years. And it would be enough to save the jobs of an estimated 700 journalists (and all the content they produce), along with some 1,400 others in the news industry alone.
It’s important to note that none of this money would come from government, or involve user fees or taxes on consumers. It would simply involve forcing two enormously rich and powerful foreign companies to share revenues they’ve been extracting from Canadian publishers for years.
The Trudeau government promised in its throne speech on Sept. 23 to take action in this area. It needs to follow up its words with legislation, and this week’s report is the road map it should follow.
https://www.thestar.com/opinion/editorials/2020/10/22/ottawa-now-has-a-road-map-to-rein-in-digital-giants.html
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