The Decibel - Australia resolved its news standoff with Meta. Could Canada?

Episode Date: September 12, 2023

Most people in Canada haven’t been able to view or post news content on Facebook or Instagram for over a month now. That’s because Meta – the company that owns both platforms – is protesting a new law that aims to get big tech companies to pay for news content appearing on its feeds.But this move isn’t without precedent. In 2021, Meta also blocked news in Australia because of similar legislation. The Australian government came to an agreement with the company – but not without some big concessions.James Meese is a senior lecturer at Melbourne’s RMIT University who researches media law and policy. He’s on the show to tell us what happened in Australia, how the legislation is working two years later and what Canada can learn from Australia’s experience.Questions? Comments? Ideas? Email us at [e-mail]

Facebook has followed through with its threat to ban Australian users from sharing news content on its site. Facebook is fighting back against the Australian government, which wants to force the company to pay online publishers. Australia's government is slamming Facebook's decision to block users in the country from all news content on its platform. These headlines from February 2021 might sound eerily similar to what we heard in Canada this summer. Facebook is choosing to block Canadians' access to local news instead of paying their fair share. Meta, the company that owns Facebook, has blocked news in Canada. That's in response to legislation forcing big tech to pay for news that appears on their platforms. And that same thing happened in Australia back in 2021.

There, it lasted only a week. But here, it's been more than a month. So today, we're talking about what happened in Australia and why that country was able to resolve the issue. James Meese is a senior lecturer at RMIT University in Melbourne, Australia, and he researches media law and policy. He's going to tell us what lessons Canada, and the rest of the world, can learn from what happened in Australia. I'm Maina Karaman-Wilms, and this is The Decibel from The Globe and Mail.

James, thank you so much for being here today. Not a problem. So back in February 2021, Australia went through something similar to what Canada is actually going through right now. This is meta blocking news from its platforms. So, James, can you just tell me about the situation in Australia? Like, what content was Meta actually blocking? So, yeah, it was quite a strange moment back in 2021. Australia woke up one day and Meta blocked news,

or at least that's what they told us they did. What was interesting, though, is as those early hours of the morning kind of continued, we found that they weren't just blocking news. So Meta took quite a broad interpretation of what quote-unquote news was, and a range of other relevant sites were blocked. So this was our National Weather Service, the Australian Bureau of Meteorology, some emergency services pages, healthcare pages, hospital pages, and even some government pages. So a domestic violence shelter and COVID-related information, as well as some smaller Indigenous and community media organisations.

I mean, it sounds like some of these things that Mehta was blocking are pretty important, right? When we're talking about people being worried about COVID, needing to know procedures, people escaping domestic violence situations, needing options. Like, what was the reaction in Australia when this happened? Yeah, so, I mean, the initial reaction was shock. I think amongst the public, there was kind of a bit of outrage at Facebook. Definitely amongst politicians, I think politicians and other public figures, you know, definitely made hay. This is an assault on a sovereign nation. It is an assault on people's freedom.

And in particular, it is an utter abuse of big technologies, market power and control over technology the one of our um state leaders um likens facebook's behavior to the north korean dictator which was one of the more you know fulsome and dramatic um critiques that being said um it definitely um sparked the negotiations and um kick-started those negotiations. And I think it really, you know, brought the Australian government to the negotiating table. So, you know, from Meta's perspective, I think they thought it was quite an effective tactic. Okay. So let's talk about everything that, the thing that started all of this, actually. So this move to block news, this move by Meta, was in response to Australia's

news media bargaining code. Can you explain what that is, James? move to block news, this move by Meta, was in response to Australia's News Media Bargaining Code. Can you explain what that is, James? Happy to. So the News Media Bargaining Code is now law and was an intervention made by the Australian Competition and Consumer Commission, which is our consumer protection and competition law agency. And they were tasked as part of a broader policy process with developing a regulation or a piece of legislation, rather, that would address the bargaining imbalance between platforms and news media. The argument made by what we call the ACCC. That's the Competition Bureau. The Competition Bureau.

Was that news media need platforms to operate. The argument being that platforms are a key intermediary and that they, you know, bring traffic to news websites and so on. The argument is that they were dependent on platforms now to operate. And we need legislation to solve this. So how do we fix this? Essentially, we're going to enforce platform payments or payments for news content. Okay, so Meta starts blocking news in Australia.

And then a week later, the company actually reversed its decision. So what happened there, James? So essentially, the point of Metis blocking really, I think, was to get the government back to the negotiating table. And if you don't mind me just explaining a bit more about the original legislation, the core purpose of the legislation was ultimately to designate platforms. So there was a ministerial role for the responsible minister treasurer, the treasurer, who would designate platforms and make them subject to the legislation. So our treasurer at the time, Josh Frydenberg, was planning to designate Google and Facebook and make them subject to the law. This was absolutely what Meta didn't want because also if agreement couldn't be reached between the news media companies and platforms,

the negotiation would go to arbitration and a panel would choose one side's offer. This is called baseball arbitration or final offer arbitration. So as a company, if you go to arbitration, the cost that you might be subject to pay to a news media company is out of your hands. Essentially, a panel is going to choose how much the platform will pay. So that's a loss of control as well for someone like Meta. So and that's a feature of the Canadian bill as well. It's this arbitration feature.

OK, so Meta and Google didn't want this designation. They protested, essentially, by pulling nudes and a whole bunch of other stuff. So what ended up happening? We went back to the negotiating table, and they got a significant amount of concessions from the government, and eventually the avoidance of designation. So that key thing that you were talking about before, that designation, they got that removed then? Well, no, not removed. It's still by the law, but I'll explain how they managed to dodge it. Josh Frydenberg essentially said, look, we're not going to designate you. Just do enough deals.

Just do enough deals. So like on your own, essentially, then? On your own. So neither Google or Meta are designated in Australia. They have done deals with a range of news media companies. And the architect of the legislation, Rod Sims, and indeed the centre-right government that are no longer in power but were the architects of this law as well,

framed this as a win because they said, look, the end goal is to get this money to news media companies. It doesn't matter that the law is technically kind of inactive, because what it is, it's really a sort of Damocles. It's a threat to platforms to say, if you don't hand over money, we will designate you. And so how many deals are we talking about and how much money does that include? Well, we don't know the exact amount because these deals are confidential in terms of money, but the rumors that have gone around suggest about 200 to 220 million Australian dollars has passed from digital platforms to news media organizations. In terms of the amounts of

deals that have been done, there's a real disparency between the two platforms. Meta's done 14 deals and Google has done 37. I'm really struck by the difference in numbers there, though, James. Why would Google make more deals than Meta? You know, that was a real surprise, I think, as well. I think at the outset of this legislation, there was a presumption that both had a similar interest in news and news content. That being said, I think we've seen probably from the US election in 2016 onwards, Meta has been quite open about the fact that they're moving away from news. So to that extent, it really makes sense that Meta is not funding news as much as Google,

because they just have less interest in it. And Google obviously is an information provider. People do turn to Google to find out what's happening, essentially. These are very different companies with very different commitments and interests and business models. And we're seeing that play out in terms of these deals. And we've seen this play out a little bit in Canada as well, because Google has said it would block news, but it hasn't actually really done so on a grand scale. They trialed it a little bit, but it hasn't been done in full. And I guess perhaps this is because of what you're saying there, that it's more in the company's interest to support news. Absolutely. And I think we saw that with Australia as well,

that Google definitely did make some experiments with, you know, reducing news in their search algorithm and so on. But when push came to shove, they were quite happy to hand over money. And, you know, if you want to talk about the numbers, there is some real value from this legislation, I think, from a journalism sector perspective. For the first time in a long time, it's an exciting time to be a journalist and in particular a journalist student in Australia.

There's lots more jobs. There's lots more competition. There's higher salaries. You know, the Guardian's newsroom in Australia grew by 50%. There's a lot of specific funding to areas of real need. So I know that our public service media broadcaster, the Australian Broadcasting Corporation, has dedicated a lot of this money to regional and rural reporting. So if you're a journalist you'd be feeling pretty good. That being said, and this is my own personal opinion, I think

there's some really interesting discussions about the extent to which Google and Meta, particularly in the Australian case, are essentially now starting to act like market makers. For example, not every news organisation has gotten funding. We've gotten a really good coverage. We've gotten about 60% to 65% of the Australian news media sector covered by one or two deals. But, for example, our other public service broadcaster, the Special Broadcasting Service, which is a multicultural broadcaster,

has only been funded by google not by meta as um our kind of culture newspaper called broadsheet outlines the platforms can determine how they deal with so you've got google and meta really deciding the winners and losers of the australian media industry so you know that's even down to even if you get a deal, how much money do you get compared to someone else? So it's a real kind of, and I don't mean this in a pejorative sense,

but it's really a distortion of the market. I mean, this really seems like it gives a lot of power to Meta and Google. Yeah, absolutely. I mean, I think one of the best examples of that is there's a presumption that these laws kind of rebalance the scales. But what we found in Australia is that often these are negotiations in name only, that in many cases, Google or Meta or their representatives will just walk into a newsroom and give over some money, a bag of money, and the newsroom is likely to take it. So there's not much back and forth between these companies in many cases

that what we're really seeing here is news organizations getting a new revenue source. They're happy to take it. And Google and Meta are saying, here's the money, and we'll go from there. So the reality is we've kicked the can down the road. So we don't know what happens when these deals are done. And it may well be that Google and or Meta decide to walk away from these deals after these initial deals are concluded. When the deals are done, like the three-year or the five-year deals are

finished, you're saying? Exactly. Yeah. And I think what's really interesting is, as Canada's seeing now, you don't take on these companies lightly. So there's been some discussion in Australia about whether the current government, are they going to designate? And obviously, I think there's no political appetite to do so. We'll be right back. Let's bring it back to Canada for a few minutes here, James. Here in Canada, Meta is currently blocking news content on their platforms for people in this country because of Canada's Online News Act. So a lot of people may have heard of Bill C-18.

This is what that is. It passed in June and it's similar to Australia's code, but not quite the same. Can you walk us through, like, what are the main differences between these two? So the main differences between Canada and Australia is that Canada is a real improvement on Australia's legislation. As we've already discussed, Australia's end result is really a kind of compromise legislation. Canada tried to fix all of those gaps. One major thing is this transparency. So all these deals are commercial deals in Australia. So the general public have no idea how much money has been given to each outlet. Canada has implemented an independent auditor as part of

this act, which will prepare an annual report and provide a bit more information about how this act is actually affecting the digital news marketplace. There's also, interestingly, a lot more objective criteria throughout the legislation that specifies a range of particular things that Google and Meta might do. So there's references to college radio, there's references to sustaining media diversity and the existence of, you know, a free and independent press. So there's actually stipulations for like small, small presses too, right? Not just kind of the

big media companies then? Absolutely. And you know, like, like Meta and Google gave money to small presses in Australia, but I think their concern is not so much that they don't want to give money to smaller companies, but more that in Canada, they have no option. They have to give money to a range of organisations and they're not in the driver's seat anymore. I note as well that the progress in Canada has meant that there are now detailed regulations about how much Google and Meta have to provide. So, and we should just be clear, in Australia, this was proposed legislation. It wasn't law yet. But in Canada, it is actually law now as of June.

Correct. Yeah. So a lot of this negotiation happened at the final hour with Meta, but it meant that there was still some wiggle room in terms of how the final language of the act was constructed. But I think more particularly, it wasn't like Meta was in the room kind of crossing out T's and dotting I's, but rather they were able to negotiate on the interpretation of that act. And once that came into law, there was an ability to kind of work out different ways of implementing the reform. Obviously, and I think perhaps because of that history, Canada has taken a much stronger and firmer response to the digital platforms. But that means now we're kind of at a bit of an impasse with respect to the kind of two parties there. Yeah, whereas in Canada now, I mean,

there's not a lot of wiggle room to change the law. It's the law now. Absolutely. And from what I understand, you said that the Canadian law does have the fact that the negotiation can go to arbitration if an agreement has not been reached. And I think it's also worth noting at this point

that the Globe and Mail is among the Canadian media outlets that have struck agreements with Google and with Meta. But James, I wonder here, what are the lessons for Canada? Like, what can we learn from the experience of Australia? It's all about deals. And I think at the end of the day, what Australia did with Google and Meta is not so much introduce legislation but do a deal. So currently Google and Meta are technically not really subject to legislation even though they are behaving as though they are if that makes sense. I think what's another lesson is that it's really interesting to

consider the countries that haven't gone down this path and that's not because they didn't try to so new zealand we're talking a lot about news payments and we're you know raising concerns about maybe we're going to do similar things as australia and so on suddenly a range of news outlets uh secure deals you know with no legislation from google and from then there's been no discussion about legislation so i think one lesson is that netter but in particular google are happy to hand over money if there is no strings attached um the second lesson is that deal making is is kind of where you get the outcomes from from these kind of. But the third lesson, I think, is perhaps counter to these two initial points by stating that we really haven't seen this play out. You know, Australia caved.

And, you know, watching from the sidelines, I'm kind of interested to see what happens if Canada holds the line, because the truth is we don't know what will happen if Canada decides to just keep going. And it sounds like, honestly, a lot of countries, a lot of people around the world are watching what happens in Canada here, right? Because countries like the US, the UK were at some point considering similar legislation, even Brazil, South Africa. And so I guess I wonder, is Canada acting as an example for other countries or something that countries are kind of waiting to see how this plays out here? Absolutely. And I think the same was true for Australia, that Canada was definitely watching closely and learned from Australia's mistakes.

Now other countries are looking from Canada and saying, well, maybe did Canada learn too much? And have we made such a strong bill that these platforms are just going to walk away. We don't know yet. I guess just to end here, James, I wonder what this actually means for people in Canada. There was some recent data published in the Globe that showed that Meta's decision to block news links in Canada has had almost no impact on Canadians' usage of Facebook. And I guess given the pushback that we talked about at the beginning from the Australian public when this happened there, what does this say about how we value news? Well, I think there's kind of two answers to that question.

There's a more social answer, which I think speaks to the post-COVID moment where we've seen results from the Reuters Institute of Journalism at Oxford University that we're seeing a growth in news avoidance amongst the general public that people are no longer engaging with news as they might have done but of course there's a economic answer to that question as well that in Australia where we're still trying to work out what news costs, essentially, and I think that's not just an Australian problem, that's a global problem, that we saw from these deals being done between platforms and news organisations that the numbers really were just whatever the numbers were. real kind of sense that this is how we value a news story or what a particular amount of news production gives back to society at an economic or social level. So I think answering those questions is really critical because it's by understanding the value of news that we can better understand

what it's worth to a society and will help us protect and conserve news and journalism into the future. James, this is all really interesting to hear. Thank you so much for speaking with me today. Not a problem. Thanks for having me. That's it for today. I'm Mainika Raman-Wilms. Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin. David Crosby edits the show.

Adrienne Chung is our senior producer. And Angela Pachenza is our executive editor. Thanks so much for listening, and I'll talk to you tomorrow.