Google and Facebook are a new threat to local news; Canada needs new weapons to fight back

In public policy terms, it’s called “generals fighting the last war”. It’s the doomed, if entirely understandable, default tactic of using the same strategies and weapons which won previous battles in a new setting against a new foe.

As Canada joins other democracies in responding to Google and Facebook’s predatory monopoly practices, it is perhaps the greatest risk of all; using the tried and true policy instruments of the past to resolve an unprecedented threat to local news across Canada.

It’s important to note the “generals” this time around, particularly Heritage Minister Steven Guilbeault, understand what’s at stake this time is clearly unlike any threat news media, and the millions of Canadians who rely on it, have faced before. In his public pronouncements, Guilbeault has indicated you can’t call in the cavalry to fight a high-tech war, especially when the other side has nukes.

But not everyone sees it that way. Some are tempted to look at a new problem through an old lens.

Over the last half century in particular, successive Canadian governments have effectively responded to threats to the Canadian cultural sector, including to news media, with innovative and comprehensive policies of special funds and Canadian content and production requirements. Purists have sometimes chafed at these policies, but they’ve been instrumental in nurturing and sustaining a vibrant cultural sector in the face of constant bombardment from the world’s dominant cultural superpower across the border. The fact is that our geography, a relatively small population strung sparsely along our border with the U.S., our broad cultural affinity with Americans, and the tremendous economic clout of American cultural industries all combined to make Canadian uniquely vulnerable.

The success of the Canadian response to this challenge is all around us; a cultural sector more confident and globally successful than anyone could have dreamed 50 years ago.

And the case for these kinds of public supports for smaller news media, particularly in rural and remote areas, still makes a lot of sense. For example, the Aid to Publishers (ATP) component of the Canada Periodical Fund is an excellent example of a relatively small, but highly effective fund for small news media. It’s been around for decades and it supports important voices. Maintaining and expanding it make a lot of sense.

But the challenge Canada faces from Google and Facebook is not just the latest battle in an ongoing “CanCon” (the industry argot for “Canadian content”) war. And it’s not about protecting Canada from a U.S. cultural onslaught. It’s about protecting democracy itself. Because it is the lifeblood of democracy, local news, that is under attack from the web giants’ practices.

In fact, the News Media Alliance, representing nearly 2,000 news media organizations in the U.S. has defined the problem well: “The marketplace (is) controlled by a few dominant platforms that decide and impose unfair terms that benefit the platforms and ensure that they reap the vast majority of digital advertising revenues. These platforms use their power and algorithms to act as de facto regulators of the news publishing industry, including by determining how, when, and what news content readers can reach, and by collecting and controlling user data and digital advertising.”

Reporting real news costs real money. And in democracies around the world, regardless of the medium, journalism is financed by advertising or paid subscriptions, or a combination of the two. Google and Facebook have broken that model.

In the U.S., a quarter of all newspapers have gone out of business in the last decade and a half, resulting in vast “new deserts” across that country. In Canada, during a similar period, according to the Local News Research Project, over 300 newspapers have closed since 2008.

Economists have a technical term for what Google and Facebook have wrought; market failure. And it can’t be fixed by a government fund or other CanCon tools. One-off deals and care packages from Google and Facebook won’t do the trick either, though it hasn’t stopped them from trying. Either approach only provides a temporary, cosmetic fix, while the web giants further consolidate their stranglehold, and local news further atrophies. The fact is that market failure can only reversed by the state forcing an end to monopoly practices and restoring market fairness.

That’s what the Australian government is doing; forcing the web giants to negotiate collectively with all of the country’s news media as a group. In this country, the publishers of the daily, regional, community, and ethnocultural news publications that account for more than 90 per cent of news media readership in Canada have come together to urge Canada’s Parliament to adopt the Australian solution. It’s the key recommendation of the report we released last Fall, Levelling the Digital Playing Field.

And we’re not the only ones. The CBC and the country’s private broadcasters have also joined our call to adopt the Australian model. News media around the world are urging their governments to do the same, including the News Media Alliance in the U.S., and the major European news media associations.

They all recognize what we do. That this is about something more important than the survival of an economic sector. It’s no coincidence that disinformation, polarization, and political extremism are flourishing in democracies around the world at a time when local news media are disappearing as a result of Google- and Facebook-induced market failure.

When the stakes are that high, it’s time to bring out the big guns.

John Hinds,

President and CEO, News Media Canada