Australia’s own media law isn’t helping news consumers either

In a news conference in Ottawa earlier this month, Heritage Minister Pablo Rodriguez sought to provide context for the tech industry’s reaction to the recently passed C-18, which outlines a process for media organizations to arrange deals with tech companies for ad revenue.

Since the bill was enacted, both Meta and Google have taken steps to remove Canadian news articles from their platforms, claiming that the bill is “unworkable” for their products. While Google has demonstrated a willingness to sit down with the government, Meta has thus far refused. In response, the Canadian federal government, without the support of Prime Minister Justin Trudeau’s Liberal Party, has said it will remove all ads on both platforms.

Minister Rodriguez called the tech platforms “bullies” for removing news links and accused them of “threatening democracy” itself. Citing Meta and Google’s profits, NDP MP Peter Julian said it was “time for them to give back” by turning over some of their money to local and regional newspapers, and online publishers.

Bloc MP Martin Champoux suggested using yet more tax money to push advertisers to spend on traditional platforms. “The government should do more. Perhaps even more incentives to advertisers to leave Meta’s platform and return to traditional sponsorships,” he said.

In a separate interview, Prime Minister Trudeau kicked it up a notch by claiming that Facebook’s actions were an “attack” on Canada akin to WWII.

Since then, the government has already outlined its own concessions to soften the blow, but the point remains.

There are plenty of articulate critiques of C-18, but the most concerning part of this entire process is that the template they’re drawing from is also massively flawed.

In name, the law is about saving journalism. Practically, it grants permission to a cartel of news organizations and corporations to force extractive payments from (mostly US) tech firms that have significant online platforms. And large media companies stand to gain the most.

This regulatory playbook is a familiar one in the Anglosphere, as we know from Australia’s News Bargaining Code of 2021 and similar attempts in the US Senate and the State of California.

The Australian example is a key talking point for Rodriguez and Liberal supporters of C-18, but its success is rather opaque.

If anyone asks the Australian government or peeks at their reports compiled by the Treasury, they claim it a “success to date,” owing to the 30 individual agreements struck between news publishers and the tech titans of Google and Meta.

But the number of agreements is the only metric we have, and it’s not surprising to see large mega corporations topping the list, including US entertainment conglomerates like Paramount Global and Rupert Murdoch’s News Corp, but also Nine Entertainment, owned by the family of now-deceased Australian media tycoon Kerry Packer (a mini-Murdoch, if you will).

What about small, regional outlets that bills like the Australian News Bargaining Code and Canada’s C-18 portend to help?

At least two academic articles have examined this impact, and both concluded that large corporate media entities gained significantly while smaller newsrooms were unable to capture gains at the same rate. “It is yet to be seen how the NMBC contributes to maintaining a sustainable business model for public interest journalism, other than continued payments from platforms,” said one group of researchers.

The Australian Treasury report notes, “it is acknowledged that many smaller news businesses would face significant challenges in participating in negotiations with digital platforms.”

Chris Krewson, executive director of LION Publishers, an association of US local news publishers analyzing the law, sums it up more bluntly: 

He wrote that there’s “no evidence that the dollars that flowed actually meant more journalism,” later pointing out that despite the $200 million infusion of cash from Big Tech, Australian media outlets still struggled immensely during the pandemic, and local outlets especially found the task of even entering negotiations to be a “lengthy and expensive process”.

For those smaller publishers and media outlets struggling and unable to strike their own deals, the Australian government signals it may need to extract yet more money for future subsidies: “Ultimately, as noted earlier, small news businesses may be better assisted by other types of Government support.”

In that case, it seems Australia will need to dole out yet more subsidies, tax schemes, and government financing to support the journalism industry. Why should Canada be any different?

What C-18 and similar laws attempt to do is to organize, coordinate, and force a business model for a particular industry. But in doing so, it is giving an upper hand to large media conglomerates with a decaying business model that will now forever grow addicted to deals with tech firms.

One could even argue that Canada’s government is harming the open internet itself by forcing online firms to pay traditional media. This, all the while platforms like Substack, YouTube, Patreon, and many others are better serving news consumers who are directly paying media outlets they enjoy and benefit from.

In slowing the inevitability of bankrupt legacy media firms, the government cannot endorse bankrupt ideas to save them.

Yaël Ossowski is deputy director of the Consumer Choice Center.

The impending war with big tech

The last few weeks have seen a substantial ramping up of rhetoric from Westminster towards big tech. Facebook’s dramatic show of power against – and subsequent capitulation to – the Australian government over its new law obliging it to pay news outlets to host their content made for gripping viewing, and it has since become clear that senior ministers across the British government were tuning in to the action.

Matt Hancock came bursting out of the blocks to declare himself a ‘great admirer’ of countries which have proposed laws forcing tech giants to pay for journalism. Rishi Sunak has been bigging-up this year’s G7 summit, which will be held in Cornwall. From the way he is talking, it sounds like he is preparing to lead an army of finance ministers from around the world into battle with Silicon Valley.

Meanwhile, Oliver Dowden, the cabinet minister with responsibility for media and technology, indicated that he has been chatting to his Australian counterparts to learn more about the thinking behind their policymaking process. He followed that up with a series of stark and very public warnings to the businesses themselves,promising to “keep a close eye” on Facebook and Twitter, voicing his “grave concern” over the way big tech companies are operating and threatening sanctions if they step out of line.

This one-way war of words comes against the backdrop of a menacing new regulatory body slowly looming into view. The Digital Markets Unit, a quango which is set to form part of the existing Competition and Markets Authority (CMA), will be the chief weapon in the government’s armoury. As things stand, we know very little about what it is intended to achieve.

Big tech in its current form is a young industry, still struggling with teething problems as it learns how to handle owning all the information in the world. There are plenty of areas where Facebook, Google, Amazon and countless others are arguably falling short in their practices, from users’ privacy to threats to journalists, which Dowden and others have picked up on.

But the natural instinct of state actors to step in has the potential to be cataclysmically damaging. The government is running out of patience with the free market and seems poised to intervene. Countless times, haphazard central policy has quashed innovation and sent private money tumbling out of the country. Against the backdrop of the forthcoming corporation tax rise, there is a fine balance to strike between effective regulation and excessive state interference.

The nature of government interventions is that they block innovation, and therefore progress. Superfluous regulation is like a dazed donkey milling about in the middle of the road, bringing the traffic to a halt. Of course, the donkey is then given a charity collection bucket and the power to oblige passers-by to contribute a slice of their income for the privilege of driving society forwards, generating unfathomable wealth and providing us all with access to free services which have improved our quality of life beyond measure.

As the government ponders the appropriate parameters of the new Digital Markets Unit and seeks to place arbitrary limits on what big tech companies can do for the first time in the history of their existence, it should consider users’ interests first. There is a strong case to be made for shoring up the rights of individuals and cracking down more harshly on abuse and other worrying trends. But let’s not fall into the same trap as our cousins Down Under in making online services more expensive to use and passing those costs down to consumers.

As the much-fabled ‘post-Brexit Global Britain’ begins to take shape, we have a valuable opportunity to set an example for the rest of the world on how to go about regulating the technology giants. The standards we will have to meet to do that are not terribly high. In essence, all the government needs to do is avoid the vast, swinging, ham-fisted meddling which has so often characterised attempts at regulation in the past and Britain can become something of a world leader in this field.

Originally published here.

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