There is something Canadian journalists dream about. Over the past year, their colleagues in Australia have taken no less than 185 million Canadian dollars from the pockets of Alphabet (Google) and Meta (Facebook).
Posted at 11:00 a.m.
This is the assessment recently made by Rodney Sims, the president of the Australian equivalent of the Competition Bureau, in an interview with the specialized media Press Gazette1. Sims is the architect of the News Media and Digital Platforms Mandatory Bargaining Codethe law adopted on February 25, 2021 which forces digital giants to negotiate agreements with press companies in his country.
The Australian law, unique in the world, inspires the United Kingdom and Canada in particular. Indeed, Heritage Minister Pablo Rodriguez and his predecessor, Steven Guilbeault, have both cited it as the main model for an online information bill that is expected to be tabled in the Commons shortly.
What to expect ?
Minister Rodriguez gave some details on his future bill on February 23 during an online conference of the Canada 2020 think tank. Canadian legislation should broadly follow Australian law.
It would give the platforms three chances. 1) Negotiate revenue sharing with Canadian news organizations. 2) If the initial negotiation fails, a mediator will be appointed. 3) If this mediation also fails, then it will be up to an arbitrator to “force a conclusion”, in the words of the Minister.
But there will be differences. To qualify for royalties, Australian news organizations must be registered, which basically leaves it up to the state to define what constitutes journalism.
Pablo Rodriguez has repeatedly said this is not a path he wants to take, and that’s good news. “It’s not up to the government to decide who will benefit from this system,” he said. It is fundamental to preserve the independence of the press. A five-person independent advisory committee is already reviewing the eligibility of news organizations for various federal tax measures to support journalism (tax credits, for example). Perhaps the law will give him extra work?
The agreements concluded so far in Australia are confidential. Minister Rodriguez said he wanted “as much transparency as possible”. This is another good news. To ensure that small and large media benefit equitably from the mechanism to be implemented, it is important to know who receives how much.
The Reluctant Giants
Since the Australian law was passed, Google and Facebook have made 64 lobbying communications to the federal government, according to the Lobbyists Registry.
But in conversations I’ve had with federal officials, I’ve been reminded that Australian law doesn’t name any platforms. It is therefore conceivable that Canadian law will apply to other social networks that generate revenue through the circulation of journalistic content.
This is how we must add 13 lobbying communications from Microsoft (which owns LinkedIn), 3 from Twitter and 31 from ByteDance (which owns TikTok).
Ottawa therefore expects resistance from digital multinationals. Platforms could argue that the financial health of many media has improved in 2021. The Press reported that its profit reached $14 million in 2021. The duty has more than doubled the number of its journalists since 2016. And the Globe and Mail now has 170,000 digital subscribers earning it more than $60 million annually.
The Australian law also appears to have prompted Google and Facebook to increase their support for Canadian journalism over the past year. According to the big boss of Google News, Richard Gingras, agreements have been tied up with no less than 100 media in Canada. And 18 journalism organizations across the country have agreements with Meta, which has pledged to donate $8 million over the next three years.
Why adopt a law in this context?
In this less dramatic context for the country’s media, why do we still need a law to collect royalties from the web giants? Because Canadian journalism pays them a lot.
This is difficult for Alphabet to measure. During the Canada 2020 conference, Richard Gingras claimed that Google searches related to news would have allowed his company to raise only about $10 million in Canada. It must be agreed, moreover, that Google already shares its revenues with content creators via Adsense, which works both on the web and on YouTube.
None of that with Meta. According to its most recent financial reports2, the company achieved in Canada a turnover of between 4 and 4.3 billion Canadian dollars in 2021, depending on whether it is calculated according to the location of its customers (the companies that buy advertising there) or its subscribers. Using the same methodology as in the past3, I estimated that in 2021, information represented approximately 5.1% of the content circulating on Facebook in Canada. So that would mean that Canadian journalism would have made Meta richer by $201 million to $217 million last year, revenue that Meta hardly shares with creators.
Even if it only applied to Mark Zuckerberg’s company, therefore, it is high time for a Canadian law on online information to be adopted.