Canada’s enactment of the Online News Act in June has catalysed a significant confrontation with major tech companies such as Google and Meta (parent company of Facebook and Instagram). The Act, slated to be in effect by December 19, requires these tech behemoths to compensate Canadian news publishers for using their content on their platforms. This move has stirred a global conversation on the dynamics between media, democracy, and big tech corporations.
Facebook’s response has been to block news content from Canadian media on its platform, showcasing the tension between national legislation and international tech giants. This standoff between Canada and these digital platforms brings into focus not just financial considerations but also the broader implications for democracy, the distribution of power, and the future of journalism.
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Media dynamics and Big Tech regulation
Since the 1990s, neoliberal policies have integrated digital media into the global market economy. This integration has resulted in significant power and profit concentration within a few technology companies. These platforms share news content, often sourced from various organisations, at minimal costs. This content helps to retain users on their platforms, allowing for extensive data collection about user preferences and behaviours. Such data is crucial for targeted advertising, market predictions, and sales, a practice often referred to as surveillance or platform capitalism.
This capitalist model has allowed these conglomerates to dominate the global advertising market. However, it has also led to a decrease in advertising revenue and readership for news organisations that produce the original content. News publishers find themselves in a precarious situation, unable to dissociate from these platforms due to the fear of losing their already diminishing readership base. If publishers organised themselves to demand compensation, it would amount to a violation of antitrust and competition laws in most countries including Canada.
Economics, democracy, and media integrity
The struggle between digital giants, news media organisations, and governments is more than a mere economic battle. It concerns the sustenance of a robust news media system essential for a vibrant democracy. Platforms like Facebook have faced significant criticism for their roles in influencing democratic processes, such as the Brexit referendum and the US Presidential election of Donald Trump.
Platforms’ algorithms play a pivotal role in shaping public discourse, controlling visibility for specific perspectives or issues. These algorithms have been accused of facilitating the spread of hate speech, disinformation campaigns, and fake news stories. Whistleblower Frances Haugen’s revelations about Facebook’s internal workings underscore the company’s prioritisation of profit over curbing hate, violence, and misinformation.
Global regulation of digital platforms
Despite the critical need, a universal regulatory framework for digital platforms is not imminent. UNESCO’s Internet for Trust conference sought to create guidelines for safeguarding freedom of expression in the context of digital platform regulations, but the main focus remained on the complex challenge of content moderation. Governments have been hesitant to impose regulations on businesses within the neoliberal market economy but are compelled to intervene to prevent monopolistic practices.
Legal cases and investigations against tech giants like Google and Meta in various countries regarding resource sharing and privacy violations highlight a growing trend of regulatory scrutiny. For instance, Google’s recent penalty imposed by the Competition Commission of India (CCI) for abusing its dominant position and indulging in anticompetitive practices is a testament to this increasing oversight.
The issue of revenue sharing with news organisations has gained traction worldwide. France’s Competition Authority’s investigation led to Google agreeing to negotiate compensations with news organisations. In South Africa, investigations are underway to examine if Meta and Google are unfairly using news publishers’ content to generate ad revenue. Similarly, Australia’s News Media Bargaining Code (NMBC) and the proposed legislation in California to impose a ‘journalism usage fee’ on tech giants reflect a global effort to address the imbalance between digital platforms and news businesses.
Lessons from Online News Act
Canada’s ONA is an important step in this global battle against Big Tech. The Act aims to break the monopoly of tech giants and support the country’s news sector. It allows publishers to collectively bargain for compensation from platforms that share, preview, or direct users to their news content. The Act’s global significance lies in its potential to set a precedent for other countries grappling with similar challenges.
Big Tech’s reaction to ONA has been contentious, especially those from Meta and Google. Meta argues that the Act operates on a flawed premise, suggesting that their platforms unfairly benefit from news content. It says Facebook’s feed directed over 1.9 billion clicks to registered news publishers in Canada between April 2021 and April 2022, equating to an estimated free marketing worth over C$230 million.
As a form of compliance and protest, Meta decided to block all news content from Canadian news businesses on Facebook and Instagram, impacting Canadians’ access to news and affecting various sectors of society, including minority ethnic communities. This action led to public and governmental backlash, with the Canadian Government and several organisations withdrawing advertisements from these platforms, and a call for investigation into Meta’s practices for potentially abusing its dominant position.
Google, while adopting a more measured stance, has expressed similar disapproval of the ONA. It criticised the Act as unworkable, focusing on the link tax that could impose uncapped financial liabilities on the company. Google estimated that its services linked users to Canadian news publishers over 3.6 billion times in 2022, representing a value of approximately C$250 million.
Arguing for a clear cap on financial liabilities, Google continues to engage with the Canadian government regarding its concerns. However, it has warned of possibly removing links to Canadian news from its search results if the Act is enforced in its current form. This standoff reflects the growing global tension between governments and tech giants over the control and monetisation of online content, with significant implications for the future of news media and digital platforms.
India, too, faces similar challenges with Google’s dominance in the digital ad market. The forthcoming Digital India Bill offers a chance for India to create regulations for fair revenue sharing between tech platforms and news businesses. Learning from the experiences of countries like Australia and Canada could be instrumental for India in shaping its digital media landscape.
Canada’s ongoing battle with Big Tech highlights a crucial aspect of modern liberal democracies. The need to balance corporate power with democratic governance and media sustainability. It raises fundamental questions about platform monopoly, quality journalism, and the future of digital economies. While regulations like ONA and NMBC are steps in the right direction, the broader question remains. Can these regulations fully address the complex issues of digital capitalism? The situation calls for comprehensive solutions, including alternative business models and broader economic reforms, to protect democratic institutions and processes from the growing influence of digital giants.
(Dr Teresa Joseph is an independent researcher and author of the books, Mahatma Gandhi and Mass Media: Mediating Conflict and Social Change, and Reporting Nuclear Pakistan: Security Perceptions and the Indian Press.)