Australia's standoff with Facebook has lessons for Canada, publisher says

Canada should move quickly on legislation tomake Facebook and Google pay for news content, because it was only when Australia began taking action that the digital giants responded with deals, says the head of the association representing the Canadian news media industry.

"If these companies will only act once legislation is imminent, then we'd like to see legislation sooner rather than later," said Bob Cox, chair of News Media Canada andpublisher of the Winnipeg Free Press.

Australia'sParliament on Thursday passed the final amendments to the so-called News Media Bargaining Code that forces Google and Facebook to pay for news. Last week, Canadian Heritage Minister Steven Guilbeault said Canadawould introduceits ownrules in the coming months.

How Canada proceeds will likely have a major impact on the future of news in the country. Cox saidGoogle and Facebook have so much power in the marketplace that it makes it impossible for small players to to compete. And they're so big Google parent Alphabet had about $180 billion US in revenue last year that almost everyone is a small player.

In Australia, the digital giants won't be able to maketake-it-or-leave-it payment offers to news businesses for their journalism. Instead, in the case of a standoff, an arbitration panel would make a binding decision on a winning offer. A last-minute amendmentgave digital platforms one month's notice before they are formally designated under the code, giving the partiesmore time to broker agreements before they are forced to enter binding arbitration arrangements.

In return for the changes, Facebook agreed to lift a ban on Australians accessing and sharing news on their platform.Google hadalready struck deals with major Australian news businesses in recent weeks, including News Corp.

Canada's news media industry has come out hard against Facebook and asked the government for more regulation of tech companiesto allow the industry to recoup financial losses it has suffered in the years that Facebook and Google have been steadily gaining greater market shares of advertising.

'They basically forced Facebook'

Cox said Facebook and Google had been reluctant to make any deals with publishers until Australia "forcefully" pushed forward, and itworked.

"They basically forced Facebook and Google to work with that legislation," he said. "NowFacebook managed to get some changes to the legislation, but basicallythey'll still be required to negotiate deals with publishers and that's the end goal."

WATCH | Newspaper publisher on making tech giants pay for news:

Newspaper publisher on making tech giants pay for news

4 years ago

Duration 6:09

Bob Cox, publisher of the Winnipeg Free Press, says local news could be in trouble if the government doesn't take bold action.

Cox said he givescredit to Google and Facebook for programs they've enacted to support journalism, including training, grants and tools. Facebook announced on Wednesday that it would raise its funding of news publishers to $1 billion over three years, and the company estimates that the traffic it sends to news websitescontributes hundreds of millions of dollars to the Canadian news industry.

"What they haven't done, though, is pay for content, and that's what we've been trying to get them to do," he said.

Google recently announced a willingness to pay for content through its Google News Showcase licensing model, but it hasn't begun to operate yet, Cox said. In a statement, Meg Sinclair, head of communications forFacebook Canada, said the company is "exploring" investments in news licensing and programs to support sustainability of journalism in Canada, but isn't in any discussions about specific licensing agreements.

Chris Moos, a lecturer at Oxford University's Business School, said the last-minuteamendments in Australia's legislation amounted to a "small victory" for Facebook.

Moos said the legislation would likely result in small payouts for most Australian news publishers. But Facebook could again block Australian news if negotiations broke down.

Andrea Carson,an associate professor in the department of communication and media atLa Trobe University inMelbourne, agreed, but also said the government had gotten what it wanted.

What Canada can learn

As for what can be learnedfrom Australia's situation, Carson said Canada should consider whether Australia took the right approach.

"There are other mechanisms for doing this, such as putting a tax on digital advertising," she said. "Maybe other countries might consider that rather than looking through competition law, which is what Australia's done."

Carson also suggested countries should make certainthe money is used to fund public-interest journalism, a guarantee that doesn't exist under the Australian system.

"It goes into the larger pool of News Corp.," she said.

WATCH | Facebook and Australia are in a standoff. Is Canada next?

Facebook and Australia are in a standoff. Is Canada next?

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Duration 7:37

Facebook blocked news posts for Australian users as the government plans to make technology companies pay for sharing news content. There are concerns something similar could happen to Canadians.

Guilbeault, who could not be reached for comment on Thursday,has promised a "made-in-Canada" approach.

"We need to find a solution that is sustainable for news publishers, small and large, digital platforms, and for the health of our democracy," he said on Tuesday.

There have been concerns in Australia that smallerpublications might miss out while the tech giants focus on big players, a "real danger" that Cox said should be dealt with in any legislation.

"The main reason why we've always argued that government action is necessary [is] so that it helps the entire industry and helps support local news across the country, as opposed to simply the bigger publishers who have had access to Facebook and Google for a long time anyway," he said.

Disclosure: CBC/Radio-Canada has business partnerships with Facebook for content distribution and with Google for services that encompass mobile distribution, data storage and communication tools.