Requiring Digital Platforms to Pay for Using News Content: Canada Follows Australia’s Lead—But Not Precisely

Earlier this month I wrote about online safety legislation and noted how Canada is following Australia’s lead in developing a regime that would, among other things, create a Digital Safety Commissioner (called the eSafety Commissioner in Australia), as well as imposing requirements on internet platforms to monitor for, and expeditiously take down, certain types of harmful content. Australia’s updated legislation went into effect in January of this year while Canada is still in the public comment stage for its proposals. Another area where it seems that Canada intends to take a leaf out of Australia’s book is with regard to requiring large digital platforms to reach revenue sharing agreements with news content providers. The two countries share much in common, including the heritage of a Westminster-style government, but just the same there are some significant national differences, and these will likely be reflected in somewhat different versions of legislation in both cases, online safety and news revenue sharing.

Regarding the latter, Canadian Heritage Minister Pablo Rodriguez has said that legislation will be introduced “as soon as possible”. It was included as one of the primary “to do” tasks in his mandate letter when he was appointed minister in December of last year. The operative paragraph read;

“Swiftly introduce legislation to require digital platforms that generate revenues from the publication of news content to share a portion of their revenues with Canadian news outlets to level the playing field between global platforms and Canadian outlets. This legislation should be modelled on the Australian approach and introduced in early 2022.”

Rodriguez has recently said that while the Canadian legislation will be modelled on the Australian version, it will differ in several ways. One change would be to delegate the power to decide which digital platforms will be required to negotiate with news content providers to an arms-length regulatory agency, rather than to a government minister. In Australia, although the News Media Bargaining Code was developed by the competition regulator, the Australian Competition and  Consumer Commission (ACCC), and the ACCC administers the code, the decision as to which online entities will be subject to it rests with the Australian Treasurer, equivalent to Canada’s Minister of Finance. Another agency, the Australian Communications and Media Authority (ACMA), is responsible for determining eligibility of news media businesses to participate in the code. During the lead up to passage of the Australian legislation, only two platforms (Google and Facebook) were named as potentially being subject to the Code, and both mounted strong campaigns to stop the legislation. See “Google’s Latest ‘Stoush’ with Australia” and “Facebook in Australia: READY, FIRE, AIM”.

In the end, both buckled and came to agreements with Australian publishers, large and small. As a result, the Treasurer did not proceed to designate any platforms under the legislation that brought in the Code, and thus, at the present time, the Code is not operative. However, it achieved its goal without having to be invoked. As the ACCC puts it, “While the Treasurer has not designated any digital platforms or services to date, the ACCC considers that existence of the code and the threat of designation is having the appropriate and hoped for impact”.

Rodriguez said that Canada may also require greater disclosure of deal terms, which in the Australian case are kept confidential. Some news outlets in Canada, especially the smaller ones, are in favour of market transparency while larger players generally are not. Already some outlets in Canada have reached agreements with Google to be part of Google’s News Showcase, but others are still holding out, hoping for a better offer. The legislation will apparently establish a regulator and impose arbitration if reasonable terms cannot be agreed upon between the designated platforms and news providers, which will also include electronic media (radio and TV). Rodriguez wants to avoid any impression that government will be involved in picking winners out of this process.

News Media Canada, the umbrella industry group for the news publishing industry, (self-proclaimed as “the voice of the print and digital media industry in Canada”) has been pushing hard for the legislation. Back in July of last year, it encouraged many of its members to publish a front-page ”open letter” to Prime Minister Justin Trudeau calling for immediate action. That didn’t happen as an election intervened, one in which Trudeau’s Liberal Party, which had hoped to convert its minority status to a majority government, instead came back into office with roughly the same seat count. It still forms a minority government and therefore has to rely on the support of at least one of the major opposition parties to pass legislation. In the case of the news media bill, the Liberals can likely count on support from both the mildly leftwing New Democrats, who will be happy to ensure that large digital platforms pay their “fair share”, and the Quebec based Bloc Quebecois, which will be happy to be seen to support francophone media.

While there are several major news publishers in Canada, such as Nordstar which controls the Toronto Star, PostMedia, which publishes the National Post and many regional papers, the Globe and Mail and Quebecor which publishes French language dailies like Le Journal de Montréal, there are none that are as powerful politically as the major Australian papers, especially the ones owned by Rupert Murdoch. Newspapers in Canada just don’t have the same political clout as those Down Under. At the same time, the challenge facing the Canadian news industry in terms of revenues lost to digital platforms is as acute as elsewhere. It is reported that the two dominant digital platforms (Google and Facebook) took 80 percent of the $10 billion in online advertising revenues in 2020, according to Minister Rodriguez.

Beyond commercial considerations, Rodriguez is also invoking as justification for the new legislation the need to maintain a professional, credible, non-partisan media as a means to combat “fake news”, a phenomenon that was apparent during the truckers’ protest occupation of downtown Ottawa in February. Those protests saw several attacks on media reporters as they were doing their job.

Whether Canada’s legislation, when introduced, will be as successful as that of Australia in pushing the platforms to come to the table with reasonable offers for their use of news content, remains to be seen. Rodriguez is touting the Canadian legislation as being more transparent with less political involvement than that of Australia, perhaps a second mover advantage. However, there is no question that the firm stance of the Australian government in standing up to Google and Facebook (now called Meta) has made the task of other governments, like Canada, considerably easier. The US is also studying the Australian model.

The platforms have smelled the coffee and are finding ways to strike deals with news providers, in order to keep governments out of their hair. For that, Canada—and the people of Canada– owe the Australian government a debt of gratitude.

© Hugh Stephens 2022. All Rights Reserved.