🗞️ dying in darkness
🔦 information asymmetry on C18
Parliament has been hearing testimony at the Standing Committee on Canadian Heritage (CHPC) responding to Bill C18 - An Act respecting online communications platforms that make news content available to persons in Canada. Already, the conversation on the proposal has escalated quite a bit, with Meta (Facebook) flashing a trump card and threatening to stop linking to Canadian news stories altogether.
Full disclosure: much earlier, I decided to stay on the sidelines for this policy debate, quietly rationalising that I am not a ‘future of journalism’ person. The Bill seemed like part of an ongoing dialogue that journalistic institutions were having with the government about the future of the profession as online advertising trends challenged the traditional business model. In hindsight, my hesitation was a mistake. The chatter around this policy has become hostile and charged while citizens are kept in the dark about the utility of this proposed legislation - that’s deceptive and ridiculous.
Pushing aside whether Meta seems like a durable company that must be wrested with over time, or why it should be a platform that recirculates news media content when it so often amplifies hate speech and misinformation to earn money from advertising, it is worth acknowledging some of why the current debate is so murky:
🕶️ Canada moved faster than usual, and citizens are being kept in the dark about the financial value and terms of financial deals that social media companies have struck with some major media outlets.
First, it is somewhat unique for Canada to be such an early mover on a digital policy file. We are still reconciling with how to best update our privacy laws and have yet to modernise our Competition Act despite significant innovation on these files in peer jurisdictions. Canada is surging behind Australia, which passed similar legislation mandating digital platforms to pay local media outlets a licensing fee in March of last year. Our discourse may simply be unaccustomed to the fury by which the bill is being opposed as we typically adopt policy positions once they have been tested and proven elsewhere.
I appreciated how Luminate’s Ben Scott pointed to this duplicity in his testimony (full link here), when he acknowledged that when financial agreements are made behind closed doors with news publishers they are “commercial licensing agreements,” BUT when they are mandated by law, they are “link taxes.” The current narrative is a creative double entendre.
Internationally, this debate takes place while Elon Musk is trying to buy Twitter, and Ye may be musing about purchasing Parler. These potential acquisitions are reminders that financially powerful people seem to have a personal interest in owning and governing the outlets that contribute to public discourse. The Washington Post - owned by Amazon’s Jeff Bezos - has a well-known slogan that “democracy dies in darkness.” At what dollar figure has a social media firm ‘purchased’ the silence or support of a newspaper? Canadian democracy around C18 is dying in the darkness around the terms and value of significant financial deals that Google and Facebook have already made with publishers like the Globe and Mail, Postmedia, and others (~18 publishers with the Facebook News Innovation Test program and ~12 publishers through the Google News Showcase program).
Second, in order to debate this Bill, Canadians need to understand the financial implications, and the dollars that have already been spent by Big Tech trying to kill it. But the current calculus is way too opaque to facilitate that.
I’ve been catching up on some of the testimony (I have a lot of hobbies + friends). The suite of voices discussing the legislation seems incomplete. For me, it seems noteworthy that Phillip Crawley (the CEO and Publisher of the Globe and Mail which was one of the first to strike deals with both Google and Meta) did not testify at the Parliamentary Committee. Why is that? Could just be timing constraints, but it seems like a miss. Another question I have is: why is the Canadian Journalism Foundation silent on this historic policy proposal? Could it be because Google and Meta are major sponsors? Have they also been pacified with Big Tech dollars? I expected that they would be an arbiter of this debate, not hide from it. By the way, their slogan is: “As journalism goes, so goes democracy.” So where is democracy going, exactly?
[BTW, the Walrus held an invite-only event last week in Ottawa that was sponsored by Meta and both panellists featured have already spoken out against the bill.]
Fundamentally, C18 is a pro-competition bill as it considers the players that have negotiating power and those that do not. There is a great deal of secrecy surrounding bribe schemes that have created new market imbalances at a time when the big can get bigger and the small stay small. This secrecy seems reinforced by the norm of Canada’s politeness, which implicitly dictates that you dare not challenge the integrity of our corporate institutions.
There is a common talking point that social media platforms have “outcompeted” legacy media on advertising. But the Bill is more about bargaining power. It’s not just about Google versus legacy publishers, which is largely how the policy debate has been framed for our consumption. This wrangling may be about legacy publishers using Google’s market dominance to strangle small players. Debate around C18 is as much about the Globe and Mail maintaining its market power over smaller publishers as it is about Google.
It is not enough to disclose that there has been ‘a deal between tech firms and major newspapers,’ citizens and parliamentarians need to know how much legacy media are getting in existing secretive deals with Facebook and Google intended to stave off a domino effect of this legislation diffusing elsewhere - like with the US’ antitrust bill, the Journalism Competition and Preservation Act.
New media publication Semafor recently discussed the “identity crisis at the New York Times,” acknowledging that the outlet seems to be struggling to understand whether it is a “news company expanding into these ancillary tech products” or “trying to morph into something like a tech company with an ancillary news product.” The article revealed dollar amounts that Meta allegedly paid the Times, the Wall Street Journal, and the Washington Post to “licence” media content: $21M, $18.5M, and $14M, respectively. It seems as if these pre-emptive deals are far cheaper than what is compelled under potential legislation. It was reported that Google and Facebook paid Australian media companies around $200M following the implementation of their News Media Bargaining Code.
Canada’s Parliamentary Budget Officer has offered a cost estimate for the implementation of C-18. The analysis anticipated that news businesses would receive roughly a third of newsroom operating costs compensated by Google and Facebook for a total compensation of $329.2M per year.
Where did the PBO get this number?
Are we to assume the deals already struck are for a third of newsroom operating costs at a select few publications?
How much have *some* Canadian publishers already received?
Now imagine how a small publisher without negotiating leverage that wasn’t offered a bribe with the threat of legislation looming, can compete against larger news publishers that have already got a third of their bills paid?
Maintaining the secrecy on these deals will erode trust in the media and radically skews the current debate. Calling out the lack of transparency here is not to question the impartiality of journalism but rather to demand what citizens deserve: transparency. At worst, our major newspapers have accepted a ransom of sorts, quietly collecting critical funding that empowers new hires and better stories - further dampening the ability of other media outlets to compete.
Some suggest that these tech platforms have only signed these deals because of the ‘threat’ that C18 posed. Does that jive? These are giant companies with plenty of leverage. It is hard to imagine that they ‘had’ to sign anything. Rather, it seems as if they chose to sign secretive deals in an effort to buy off the bill. As a result, Canada’s media market is weirdly warped.
It has been rumoured that the deals between big tech and newspapers have a clause that existing details will be voided if the legislation is passed. If our legacy media outlets are being held hostage by tactical bribes, we should demand that the media mafioso that accepted these bribes disclose their value and terms so that we can have a more genuine debate on the bill.
When testimony begins on this Bill in the Senate, each witness should be asked what their relationship is to these platforms and how much money their publication has received to date as a way to illuminate conflicts.
This is a critical legislative moment for Canada that is characterised by some serious information asymmetry. Since 2008, Canada has lost more than 286 newspapers, and Post Media no longer publishes on Mondays. Many - myself included - have mourned the loss of Chatelaine and the evolution of Macleans. But the cliche of “you get what you pay for” is true. Right now, not enough people are paying for newspapers, firms are paying for ads, and large technology firms are paying for the pseudo-silence of the leadership of many of those papers. Inappropriately, the terms of these deals are currently behind an impenetrable paywall, likely locked up with intimidating non-disclosure agreements. While we know the general story, there is no real way to click on it to get more information. This is probably not the future of media we were hoping for.