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Column: California and Canada absolutely must call Google’s and Facebook’s bluff on news

Media baron Rupert Murdoch
“Our customers are smart enough to know that you don’t get something for nothing,” media baron Rupert Murdoch said in support of tech platforms paying news outlets for the stories their users consume.
(Drew Angerer / Bloomberg via Getty Images)
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In June, Canada passed a law that will require major tech platforms such as Google and Facebook to pay a small fee when they host news on their platforms, to compensate the journalistic outlets that produced it. A similar bill recently cleared crucial hurdles in California and now has a serious chance at becoming law too.

In response, Google and Facebook say they will have no choice but to ban news altogether from their services in those markets when and if these laws go into effect.

California and Canada must absolutely not give in to the tech giants’ tantrum. This is a bluff, and not a particularly convincing one. For the sake of the beleaguered news industries in both places (yes, including this media outlet), the Canadian and Californian governments must absolutely call it.

For assurance, we should look to Australia, where a like-minded bill went into law in 2021, even after Google and Facebook made the same exact threats. Facebook did initially restrict access to news, but the ploy lasted barely a week before it backfired wildly, and Facebook agreed to comply, albeit after extracting some concessions.

That bill has already restored tens of millions of dollars in revenue to Australia’s troubled newsrooms, and, while far from perfect, has transformed the media environment dramatically.

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A journalism professor in Sydney named Monica Attard told the Columbia Journalism Review that conditions have reversed themselves so dramatically that she has trouble selling students on internships anymore — it’s just so easy to find an entry-level job, thanks to the hiring spree that has followed the passage of Australia’s news law. “I swear to God,” she said, “I have not seen it like this in 20 years.”

This is music to the ears of just about anyone who cares about journalism or making a living in the increasingly battered media industry. In California, and in the U.S. in general, journalism has seen a relentless, two-decade decline. Just this year alone, BuzzFeed News shut down entirely, Vice Media went bankrupt, the Washington Post saw a round of cuts, and here at The Times, layoffs have hit 13% of our newsroom. The culprit of these recent guttings is largely declining digital ad and subscription revenue.

It’s the same story in Canada. The Canadian journalist and tech critic Paris Marx points out that overall media revenue declined by $6 billion between 2008 and 2020, and that the journalism industry shed a third of all its jobs between 2010 and 2016. Hundreds of outlets have shut down in that time span.

Hence, Canada’s law, Bill C-18, or the Online News Act. It’s based largely on Australia’s version, and is motivated by the fact that the tech giants have usurped the digital ad revenue that would otherwise flow to journalistic outlets.

It’s indisputable that part of what makes both Facebook and Google so valuable as platforms is that they are both hubs where users find, share and discuss news stories. News stories are one of the major categories of information that Google indexes; they make the service feel crucial and current. Whenever there’s a major local or world event, we search Google for the latest development. And alongside personal updates from family and friends, sharing news — and getting mad about it — is entirely foundational to Facebook.

Over the years, the value that news has brought to Google and Facebook (not to mention to Twitter, Reddit and other major social platforms) is staggering. Journalism has bolstered the value proposition of these platforms considerably. Picture, for a minute, a Facebook without legitimate news — where the only posts you encounter aside from baby pics are your uncle’s political screeds and bad memes. It would be a cesspool. And try conjuring a portrait of Google with no media to index. Guess it would still be good for finding recipes and Wikipedia pages.

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All this, of course, has come at a great cost to newsrooms. Why subscribe to a newspaper when you can get the latest headlines and commentary on social media for free? And if you’re an advertiser, why pay for space in a smaller, localized publication when you can go right to the digital room that everyone’s hanging out in and slather your poster on the wall there — just above the bulletin board with the same headlines from that smaller publication?

Given all of the above, it seems eminently fair that the tech giants help pay for the content that has given them so much value. And lest you think this is a radical redistributionist proposition, allow me to share the views of someone else who thinks so — one Rupert Murdoch.

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“Right now, we have a situation where content creators bear all the costs, while aggregators enjoy many of the benefits,” the News Corp. mogul said at a conference on the future of digital journalism back in 2009. “Our customers are smart enough to know that you don’t get something for nothing. That goes for some of our friends online, too. And yet there are those who think they have a right to take our news content and use it for their own purposes without contributing a penny to its production.”

The complicated part, of course, is how to orchestrate that contribution. Since we’re talking about platforms here, where not just Google or Facebook but their billions of users post content, any mechanism aimed at determining its value and paying journalists their fair share is bound to be unwieldy, especially at first. The Australian bill, for example, compels the tech giants to negotiate with news outlets to determine a fair rate for hosting their work; in a somewhat unusual arrangement, it forces Big Tech to the bargaining table by stipulating that an independent arbiter will essentially default to the news organizations’ bid if Google or Facebook don’t enter one of their own.

It should be said that this process is far, far from perfect. It has excluded smaller news outlets that have had trouble getting included in the bargaining, and critics say that the system is too opaque and that it’s unclear what percentage of the new tech revenue is directly benefiting journalism. The largest beneficiaries seem to be the most established newsrooms, which is one reason media trade groups in Canada and California are salivating over the deal.

Still, it’s been a powerful force for getting boots on the ground in Australia. The Columbia Journalism Review estimates that its online news law has given Australia’s public broadcasting company enough resources to send 50 new journalists to underserved and far-flung parts of the nation, that it now accounts for 30% of all editorial salaries, and that, in total, it’s already put $150 million back into the news industry’s coffers. As a journalist who has seen cost-cutting and layoffs batter every single one of the organizations I’ve worked at for the last 15 years, from digital media startups to legacy outlets, that sort of an injection would be nothing short of miraculous.

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And it sure can feel like journalism needs a miracle these days. But to me, all this shows that the news industry doesn’t need a miracle — it just needs decent regulation. It needs the tech giants that have built their empires in part on the backs of content produced by journalists to pay their fair share.

I think they will. I think they know that no matter how many scare tactics they trot out — Big Tech is trying to paint these efforts as a “link tax” and to claim that the laws will benefit international news conglomerates over local concerns — if they really do refuse to offer news, users will simply turn to competitors that do. Or go straight to the source! And consider paying for a subscription to that local paper, maybe — which also would be a fine outcome for the news industry.

Canada’s law tries to improve on Australia’s by allowing smaller news organizations to cluster together to bargain collectively, in an effort to prevent them from losing out. California’s, I may say, is even better. The Journalism Preservation Act not only features a rare alliance of industry leaders and labor — the Media Guild of the West, of which I am a member, unanimously endorsed the bill in April — but also ensures that 70% of the platform funds go toward newsroom payroll. Directly to journalists, in other words. It would provide a huge boon to newsgathering at a crucial juncture in the industry.

Matt Pearce, the president of the MGW and a reporter here at The Times, has fought for some of those labor and journalism-friendly provisions. “Google and Meta have used their immense size to capture much of the value that quality work generates for advertisers,” he says, “and what chance does a newsroom have to win a fair deal — let alone maintain our journalistic independence — when these massive companies have the clout and willingness to threaten an entire country with a ban on displaying news?”

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Indeed, it’s a sign of bad faith — and a bad bluff — that rather than offer meaningful alternatives, Google and Facebook are simply stamping their feet. Governments must not give in; there’s too much at stake.

When Facebook announced that it would ban news in California if the law passes here, I tweeted that it felt like a bluff. Andy Stone, the head of Meta’s communications department, slid into my DMs. “I’d caution you against thinking this isn’t real,” he said, pointing to the fact they made the same statement in Canada.

I asked him why it would be different from what happened in Australia. I asked him if Facebook had a counterproposal.

There was no reply.

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