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It was inevitable. After Meta pulled the plug on news content on its platform in Canada as its way of complying with the obligations of the Online News Act, Australia, the model that Canada sought to emulate, was surely next in line. On March 1, Meta announced that it plans to stop paying publishers of news content in Australia, and will not renew its current agreements with Australian media once they expire. Most will expire this year.
Canada had modelled its Online News Act (Bill C-18) on Australia’s News Media Bargaining Code, albeit with “improvements”. Rod Sims, who was head of the Australian Competition and Consumer Commission (ACCC) at the time the Commission designed the Code (later incorporated into legislation as the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Act 2021), was invited to testify before the Canadian Parliamentary committee examining Bill C-18. In his testimony, Sims talked about the success of the Code, its benefits for not just large media players but also many smaller “country” outlets, estimating the benefits to be north of A$200 million per year to journalism in Australia. He added that the institution of the Code “has transformed the journalism landscape in Australia. It’s gone from pessimism to optimism.”
Inspired by the results of the Australian legislation (which, by the way, ended up not designating either Google or Facebook under the Code, since they managed to come to sufficient “voluntary” agreements with Australian media), Canada moved ahead, basing its legislation on the Australian law but adding a couple of additional features. One was to increase transparency with regard to deals that would be struck under the law. Another was to require self-designation by platforms (while making it apparent that only Meta/Facebook and Google) met the criteria, allowing them an exemption if they reached acceptable deals with media. In this way, the companies could not avoid designation and would be subject to the law, something they strongly opposed, even though both had already engaged in voluntary programs on their own terms to provide some financial support to selected media outlets.
Just as happened in Australia, (see “Google’s Latest “Stoush” with Australia: What’s the Lesson from Germany’s Failed Effort? and “Facebook in Australia: “READY, FIRE, AIM”) both platforms pushed back strongly against the draft legislation, threatening to block news for Canadian users. (Facebook briefly and disastrously blocked news for Australian users during its campaign against the Code, but ultimately backed down). First, in the fall of 2022 Facebook said it might have to block postings of news on its Canadian platform, followed by Google which threatened to block search for Canadian news in Canada by Canadian users. By the summer of 2023, when the Online News Act became law without any of the amendments proposed by the platforms, Meta upped the ante by declaring that it would end news availability on Facebook and Instagram for all users in Canada prior to the Act taking effect, set for December 2023. Again, just as in Australia, Canadian government leaders were public in their condemnation, accusing Meta of threatening and irresponsible behaviour. Alas, it was all to no avail. It appears Meta had already made its decision to not provide financial support for news content in Canada, and to end the few existing agreements that it had undertaken in the past. At the time, it indicated it would also be taking similar action elsewhere. Rather than submit to the legislation by negotiating with media entities, it complied (in letter if not in spirit) by blocking links to Canadian media. Negotiations with Google continued and eventually a compromise of sorts was reached whereby Google agreed to contribute to a fund which would be used to support journalism in Canada.
This was a somewhat pyrrhic victory (the fund will be about $100 million, less than half what had previously been estimated), but a victory nonetheless in the eyes of at least some of the news media. One can debate the overall success of the legislation (see MediaPolicy.ca’s “The Online News Act is law: a buzzer-beater win or epic miscalculation?”), but along with more government financial support, the Google funded pot will be welcomed by many smaller media outfits. Ironically, establishing a fund rather than requiring negotiations between the platforms and media for payment for content was an early proposal by some commentators. Now this has come to pass more by accident than design. Criteria for disbursing from the fund have been tweaked so that broadcast media, and in particular the CBC, who employ the bulk of news journalists in the country, get less than their proportional share would otherwise indicate.
The lesson for Canada, and now for Australia, is that the big digital platforms will not hesitate to play hardball if they feel their global interests are threatened. While Australia, followed by Canada, was first off the mark with legislation designed to level the playing field between a stressed journalism sector and the monolithic platforms, the response of the platforms was governed more by potential precedent than the specifics of those markets. The existence of draft legislation at the federal level in the US, (the Journalism Competition and Preservation Act, aka JCPA) as well as at the state level in California and Illinois, has not escaped the attention of Meta and Google. (Even the watered-down compromise settlement that Google made with Canada has led to some lip-smacking speculation in the US as to the amount of funding that could flow to US media). It appears that Meta, in the face of cost cutting and loss of market share in 2022, had made a business decision that if it had to pay for access to news content, it would do without. To what extent this is a wise business decision remains to be seen, but the company has clearly made a business decision in this regard. This decision may or may not affect Meta’s bottom line, but it will have the effect of leaving the platform as a purveyor of less than reliable information from nonprofessional sources. However, doing the most socially responsible thing as opposed to maximizing profits by cutting costs is not what Meta is about. Having made its decision, it will need to unwind its commitments to Australian media, which it is now in the process of doing.
What does this mean for Australia and what can the Australian government do about it? Writing about this in Canada’s National Post, Rod Sims, now professor at the Crawford School of Public Policy at ANU, outlined some choices the Australian government needs to face. It could move to designate Meta under the Bargaining Code and force it into the negotiation and arbitration process. That would likely lead to Meta taking precisely the action that it took in Canada. The government could amend the legislation, but to what end? It could publicly criticize Meta, accusing it of unfairness and bad behaviour. It has already done this, with Prime Minister Albanese saying that what Meta is doing is “not the Australian way”. That will have zero influence on Mark Zuckerberg and the people who run Meta.
At the end of the day, Australia can stand up to Meta, and let the chips fall as they may, or it can allow Meta to free ride on Australian news content, accepting that there may be social benefits in allowing this to happen. A recent report by the Australian Broadcasting Commission (ABC) points out that Facebook is the largest social media platform for general news and half of Facebook’s users in Australia report using the social media platform for news. (Regardless of this, Meta’s beancounters give news no value to the platform). According to a University of Canberra report cited by ABC, 45% of Australians get their news from social media as opposed to less than 20% from print sources. The largest source of news is still TV at 58%. (The numbers are greater than 100 because many consumers get their news from more than one source). In one sampling, 14% of Australians got their news from Instagram! While I find this personally appalling (indirectly revealing my age), that is the reality of our society today. Better that consumers find reliable, curated news somewhere–but we still need to recognize that responsible journalism needs to be paid for. Meta, apparently, has no desire to be a part of that equation. Without the infusion of responsible, curated journalism, Facebook will become an even greater home for misinformation than it already is. But does Meta care? Clearly not. Consumers need to be encouraged to find their news sources elsewhere. Easier said than done.
The Australian government is no doubt pondering how to respond in the best interest of Australia. Allowing Meta to wriggle out from its obligations under the Bargaining Code would not necessarily undermine the deals struck with Google, who appears to have accepted that its overall interest is best served by some form of accommodation. Having Microsoft, which has publicly stated it is willing to subject itself to both the Australian and Canadian legislation, breathing down its neck is undoubtedly a factor in this. Even if the Google deal won’t be undone, it is still galling that Meta can get away with it. Canada had to swallow that reality, yet stood up to Meta. What will Australia do? It’s a tough call.
© Hugh Stephens, 2024. All Rights Reserved
