The House of Commons is currently considering a bill to address the decline of Canadian journalism. The Online News Act creates a system allowing publishers, such as those of newspapers, to negotiate jointly with the giants of online platforms such as Google and Facebook in order to be fairly compensated for the journalistic content used by these platforms.
Posted at 11:00 a.m.
Generally speaking, it grants publishers an exemption from the competition law of Canada for the purposes of these negotiations. However, some specific business relationships need to be contextualized to explain why this is a good thing and why it can save the industry. With so many jobs lost over the past two decades, the decline of journalism is often attributed to the rise of the internet.
Twenty years ago, the economic model of journalism was clear. Your local or regional newspaper made money through a direct relationship with its readers, as it delivered the newspapers to your doorstep. Because you read it, the space on the pages of the newspaper was valuable to companies looking to advertise their products or services to you, and the newspapers sold those ads directly to advertisers.
Today, content published by publishers is increasingly available to readers through platforms such as Google and Facebook, which collect and monitor data about those publishers’ readers.
Rather than approaching individual advertisers to sell advertisements online, publishers approach online advertising marketplaces that serve as independent auctions, where the primary value for advertisers is detailed data. on readers. Through Google’s dominance in online search and Facebook’s in social media and online messaging, these two giants control these advertising markets, often by illegal means.
Although they profit greatly from the information content present on their platforms, Google and Facebook use their dominant position to pay little or nothing for the use of this content, deny publishers access to their readers’ data , requiring publishers to provide articles substantially free of charge, and requiring less cost-effective publishing formats that favor platforms. With publishers unable to monetize the content they produce, journalism around the world is struggling.
But this is not a question of technology, but rather a difference in bargaining power. Individual newspapers cannot turn away from the platforms, or risk losing a large part of their readership and advertising revenue. Google and Facebook are the only option for many publishers, while the platforms can ignore requests from any publisher. And if publishers band together to demand compensation from platforms, they would be breaking the law. Antitrust and competition laws, such as the Canadian Competition Lawprohibit competitors from coordinating or colluding with each other, as this allows them to raise prices to the detriment of consumers and the public.
On the other hand, in the case that concerns us, that is indeed the goal, insofar as we want journalism to be remunerated. This is all the more true since competition authorities around the world – in the United States in particular – have been completely unsuccessful in preventing Facebook and Google from obtaining their monopoly through, for example, the acquisition of DoubleClick by Google in 2007 and the acquisitions of Instagram and WhatsApp by Facebook. The exemption from competition of the Online News Act aims to rebalance this relationship by allowing publishers to come together to negotiate fairer compensation from platforms, which use their content and benefit from it in exchange for minimal compensation.
Until the concentrated power of tech platforms is harnessed, the solution is to allow publishers to have greater bargaining power with them.
The Law follows the model of a similar law, Australia’s News Media Bargaining Code. The results in Australia have already been well beyond what was expected. This legislation has proven to be a boon to Australian journalism, both large and small publishers, transferring an estimated A$200 million to the Canadian journalism industry. By the way, some editors even struggle to find interns in Australia, as aspiring journalists have been able to find full-time jobs easily.
Despite the common criticisms of the Australian code (lack of transparency, lack of guarantees for journalistic expenses, favoritism for large publishers, etc.), the Online News Act addresses these shortcomings by requiring, for example, that the CRTC receive details of negotiated agreements or that small publishers can be added later to negotiated agreements.
In his examination of the Online News Act, Canada’s Parliamentary Budget Officer recently estimated that it would likely result in an additional $329.2 million in revenue for Canadian news organizations. How many journalists could be hired with this amount?