The Decibel - What Google’s deal with Canada means for the rest of the world

Episode Date: December 5, 2023

After a very public and heated battle with the federal government, Google has come to an agreement to support Canadian news to the tune of $100 million a year. Countries around the world have been watching this play out in Canada, as they try to tackle the imbalance between tech giants and media outlets.Taylor Owen, founding director of The Centre for Media, Technology and Democracy and an associate professor at McGill University, joins us today. He explains the details of the deal, and what precedent it sets for other places looking to bring in similar legislation.Questions? Comments? Ideas? E-mail us at [e-mail]

The federal government's standoff with Google is over. This is a historic development. It will establish a fairer commercial relationship between digital platforms and journalism in Canada. This takes into account the rise of new digital technologies and tech platforms. For more than a year, the government and Google have been trying to come to an agreement over how to move forward with Bill C-18, the Online News Act, which would see tech giants pay Canadian news outlets for their content.

Last week, the two sides struck a deal that will have Google pay $100 million a year into Canadian journalism. And this isn't just important in Canada. Places around the world are looking to adopt similar legislation, trying to tackle the imbalance between big tech and local journalism. Taylor Owen is the founding director of the Center for Media, Technology and Democracy and an associate professor at McGill University. Today, he tells us what impact this deal might have here in Canada and what message it sends to other countries looking to bring in similar measures. I'm Maina Karaman-Wilms and this is The Decibel from The Globe and Mail.

Taylor, thanks so much for joining me today. My pleasure. Thanks for having me. So I'd like to start by just talking through some of the details, really, of this deal that was struck between Google and the federal government. So we know it's $100 million per year, but can you tell me, how exactly is this going to work? I don't think we fully know all the details yet, but what seems like the case is that Google will provide $100 million through some sort of fund to be distributed equitably amongst Canadian publishers. One of the core problems or disagreements Google has had over this bill is that it didn't cap their liability. So it just said that Google

and publishers need to enter into negotiations over the nature of the funding arrangements between them. And if they didn't reach an agreement, an arbitrator would decide whose offer was better. So they couldn't know year to year or deal to deal just how much they were going to have to pay out. So they said, look, this liability needs to be capped. The government agreed with them on that ultimately. And then the negotiation was about what is that cap? And it turns out where they landed was $100 million. So that is the liability that they seem to be willing to accept, not just for Canada, because this was never about Canada, but for other countries as well, as they bring on similar legislation if they do. And we're going to get into kind of what the precedent that this

might set up for other countries as well. But just to be clear here, then Taylor, so this $100 million deal means that Google is not going to make individual deals with individual publishers now, right? This is going into one central fund and this is how it's going to be done. It is. So one central fund operated by somebody who will then distribute that money on their behalf. The big question is who exactly will be overseeing the distribution of these funds and exactly what criteria will be used to decide who gets what and how much. I think what's important to note, though, is they can't give it to anybody under any condition, which was part of the problem of what we had before.

Google and Meta were deciding which publishers were going to receive funding. And those deals were secret. The public did not know what was behind them. We did not know who had them and who didn't. And they certainly weren't equitably distributed across the industry. This fixes that problem. It doesn't fix all the problems, obviously, and we can talk about that. But it does address that problem. And I think that's probably a good outcome here. This is what exists now, right? Google has some existing deals with publishers, including the Globe and Mail. But can you just spell this out for me, Taylor? What is the issue with having a more opaque system like we had before? What were the consequences, I guess, of

that? Well, the consequence is that as a consumer of journalism or as consumers of journalism, citizens don't know which publishers are receiving funding or subsidization from which platforms under what terms that subsidization is being distributed and given. And I think, look, it's not an ideal situation where the market of journalism in Canada requires support from either the tech companies, Google and Meta in this case, or from government. But if they're going to be getting that support, I think it makes sense for the deals to be as transparent as possible. So we know what money is going to whom and under what terms and equitably distributed so that there can't be a bias in who gets deals and who doesn't based on their editorial coverage. So that's one piece of this. A related piece, though, too, is that part of the underlying rationale for these kinds of policies is that there's a real market

imbalance. There's an imbalance of power between these platforms and publishers. And I think facilitating a system where all journalistic publishers have equal access to this kind of funding goes some way to rebalancing that power. Yeah, so it's one thing. So as a consumer, you don't know who's got these deals. I would imagine as smaller publishers, too, it's harder to negotiate your own deals with these tech giants if you don't know what everyone else is getting, right? So transparency lets people have that understanding. You mentioned the power imbalance here, though, Taylor, which seems like it's a big part of this, right? This is what the Online News Act was trying to tackle here. How does this deal fix that power imbalance? Remember that for over a decade, Meta and Google have been incentivizing

and encouraging journalistic publishers to use their platforms. So there's been a long process of relations between publishers and platforms, financial, audience development, distribution, so on and so forth. In many ways, this was mutually beneficial. There were some benefits that were provided to publishers. I think over the last decade, publishers have been incentivized and have actively moved their products and their distribution and their monetization

and their engagement with their audiences onto platforms that don't necessarily have incentives that are aligned with theirs. A platform can decide that it wants to promote video, then it doesn't, that it wants to promote news, then it doesn't. And those decisions have a real impact on the publishers that have come to rely on their platforms. But the incentives have been real. There have been funding arrangements, their platforms. But the incentives have been real. There have been funding arrangements. There have been training.

There have been all sorts of sort of ways the platforms have encouraged and incentivized publishers onto their platforms. And now they're dependent on them in some real ways. So they're in an unequal position to bargain over the fair compensation for their content. And this is sort of, I think, trying to sort of rebalance a little bit some of the financial benefit of that symbiotic relationship. Yeah, let's talk, I guess, about the relationships between tech and journalism.

Google has been pretty forceful in its criticism of the Online News Act. It threatened, of course, to pull Canadian news from its platform, which is what Meta did earlier this year, right? So I guess the big question is why didn't Google do the same thing as Meta? Why did Google decide to stick with Canadian news? For Google, a core element of their value proposition to users is to help people find reliable information. So the cost to erasing journalism from that proposition is a huge cost, and I would argue is existential to them. I don't think they can remove journalism. Meta doesn't make that same value proposition. Meta is saying they're going to

provide you with information that is not necessarily reliable, but that is interesting, that content that you might want to see. So for them, getting out of news is a very different thing. And in fact, if you look at the way Meta distributes news on their platform globally, you see a very steep decline over the past five years. It seems clear from the outside that Meta is getting out of news everywhere. So cutting it off in Canada is sort of the last nail in the coffin here, but it's part of a long decline. Well, let me ask you about that then, because Meta has banned Canadian news on its platforms starting this past summer. So it has been a few months now. I guess, what kind of impact has that had on journalism in particular in Canada? It's had a big one. We run a project called the Media Ecosystem Observatory, which studies the circulation of information through our media ecosystem on various social platforms in Canada.

And we've been watching what it looks like when you take news and links to news out of the Canadian media ecosystem. And the effects are fairly profound. For one, local and indigenous news is much harder hit than the national news organizations. In part, I think, because the national organizations can still cater to international traffic, to international audiences, whereas local ones don't. So we've seen about a 90% decline in local and indigenous news organizations of the reach of their journalism on Meta and Instagram. Another thing that's interesting, though, is in political discourses. So on, for example, Facebook pages that talk about politics, places where news really features quite prominently for obvious reasons. When you take away news, links to news get replaced by the sharing of more images. And those images are very often memes. So in political groups, we're seeing

less discussion of journalism and more discussion of memes. But I think probably the most striking finding of this initial work is that we're now seeing 5 million fewer incidental views of Canadian journalism on Facebook a day in Canada. So when you're scrolling through your Facebook feed, it used to be that journalism was a part of that diet you were being provided. The presence of that information in our ecosystem makes us a little bit more resilient to some of the forces we see online of misinformation, of disinformation, of false information circulating through our system, which is just not the case in the United States. It really does differentiate us from them. But what happens, and I think this is the open question, is if you take journalism out of that equation, if we no longer have journalism

flowing through our social media ecosystem, I believe personally that we will be losing some of that resiliency that we've built up. We'll be back in a moment. So we have talked on this show before about other countries like Australia that have tried something similar. So Taylor, how is this Canadian deal different from somewhere like Australia? The Australian policy or legislation in this was a very crude measure. All it said was a competition commissioner said, you platforms have to enter into more deals with more publishers than you currently do. And they both did. Both Google and Meta entered into three-year deals with a wider range of publishers than they had before. And the government said, okay, you did enough. You're not going to be subject to this, these forced bargaining processes. When the Canadian government

looked at that, they said, look, like, that's fine. I mean, you're getting more money to publishers, but those deals aren't transparent. Not everybody is getting access to them. They are not being equally distributed across the media ecosystem. So instead of using a kind of somewhat crude competition policy measure, they used a regulatory one. And the advantage of that is that the government can set the rules that the platforms and the publishers need to follow in entering into these deals. Now, I think this is part of the reason the platforms didn't like the Canadian legislation, because it's much more difficult to comply with it. It requires reporting and sharing information about your deals with the government. It requires entering into deals with a much wider range of publishers

and on terms that you're not setting yourself. And one thing we know about these companies is they do not want to operate their businesses under the constraints of regulation. And so when they look at the Canadian bill and they look at other governments around the world who are looking at similar policies, I think they thought that they needed to stop this from happening in Canada, or at least to negotiate terms that put as minimal regulatory burden on them as possible. So what kind of precedent then does this deal that Canada struck with Google, what precedent does it set internationally for other places that might be looking to do something

similar? Well, for one, it sets a cap on liability. What precedent does it set internationally for other places that might be looking to do something similar? Well, for one, it sets a cap on liability. So I think the equation that Google has agreed to is for a country of approximately 40 million people, they are willing to contribute $100 million. And so that's now created a prorated liability cap that if I'm, for example, California, who's the state of California that's currently debating a similar policy, I look at Canada and I have roughly the same population. So I'm probably looking at a fund or a contribution of approximately $100 million for my state. If I'm the UK, I can also calculate the potential contribution based on that prorated liability. The difference between Google and Meta just contributing to a fund independently

versus them doing it under the requirements of a regulatory regime are that there's oversight over to how the fund operates. So it cannot just go away year to year, for example. There'll be some degree of transparency over how that money is given out and to whom. So Taylor, you mentioned California is looking at legislation as well as the UK, Indonesia, Brazil, the US Senate, all of these different jurisdictions are looking at similar legislation. Does this Canadian deal give other countries a kind of blueprint in a way then for how to do this themselves and strike their own deals with these tech giants? I mean, it could. I think there's a lot of lessons that are going to come from this experience. And one of which is that Meta is willing to turn off news

for an entire country. And I think that is part of the calculation that governments need to take into account when they go down this path. I think that kind of very aggressive response will be part of the calculation other governments make. I think if the end result is meta being out of

news entirely, and these kinds of funds, then that's probably going to make some other countries think carefully about how they go down this path. I guess, why is it that so many countries are choosing this type of legislation as a way to help the journalism industry? The key point about the Canadian experience on this, I think, is that no one policy is a silver bullet for the many challenges facing the journalism industry. Journalism is going through a period of rapid transition, in part because of the way their content has been absorbed in and distributed through social platforms, but for a host of other reasons as well. And the experience of Canada, I think, is that you need to approach this from a policy perspective from a number of different angles, one of which might be supporting through a tax credit, the journalistic labor. And I think that's had a real effect and some positive effects on the Canadian ecosystem. That was in the fall economic update just this fall. It was increased in the fall economic update. It began several years ago, and it's had a

noticeable effect on the viability of many publishers in Canada. And the reality, I think, is there are a number of things that from a public policy perspective, we need as societies to be doing to ensure journalism doesn't just sort of survive this transition, but actually thrives. So Taylor, all this being said, was this a good deal for Canadians? I'm not sure we fully know yet. I think $100 million distributed equitably to journalistic organizations across this country every year is a big deal. And if that can be done in a way that has some oversight, some democratic oversight, and create some predictability to the funding that was already coming from this platform into

the ecosystem, then I think that's probably a good thing. I think if Meta decides to contribute as well, then even better. I do think, though, that the loss of Meta and the aggressiveness and the extent with which they were go to block journalism on their platform in Canada has had a real effect on our ecosystem. It has made our democratic discourse worse. And that also needs to be factored in. Taylor, thank you so much for taking the time to speak with me today. My pleasure. That's it for today. I'm Maina Karaman-Wells. 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.