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Both Facebook and Google argue that a report prepared by Canadian news publishers misrepresents how the internet economy works.


Canadian news publishers want government approval to seek compensation from digital giants such as Facebook Inc. and Alphabet Inc.'s Google for using their content, including the power to bargain as an industry to negotiate the terms.

The past two decades have seen Big Tech companies come to dominate information distribution and advertising spending, leaving traditional news publishers with diminished revenues, even as they produce much of the content shared on social feeds and news aggregators.

Earlier this year, Australia’s government asked its competition regulator to draft a code giving publishers the right to bargain individually or collectively with platforms – without running afoul of competition rules in the latter case. The code would also set standards around news sharing, algorithm changes and data sharing.

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Getting Google to pay news outlets is at odds with how search engines should work

Last week, chains such as Torstar Corp., Postmedia Network Canada Corp. and Quebecor Inc., and newspapers including The Globe and Mail and La Presse, asked all parties in Parliament to adopt the same policy approach as Australia.

In a report called Levelling the Digital Playing Field, the publishers argue that platforms such as Facebook and Google should compensate them for using their content after many years of getting a “free ride” while controlling between 60 per cent and 90 per cent of the digital ad market.

Both Google and Facebook, however, argue that the report “misrepresents” the way their platforms and the broader internet economy works. While Google says that it sends Canadian news websites five billion visits each year, Facebook contends that news is only a small fraction of the content posted on its platform.

But implementing an Australia-style policy in Canada, the publishers say, could ensure better job security for Canadian journalists, according to the report from News Media Canada. This would allow Canadian outlets to continue producing content that helps drive the digital platforms' revenues, the report continues.

The Canadian publishers are also seeking assurances that web giants will be prevented from operating with “unfair competitive practices,” and for enforcement “with teeth” that could see platforms subjected to fines worth hundreds of millions of dollars for such things as blocking publishers’ content or not disclosing audience data with them.

In the United States, the Justice Department, Federal Trade Commission and House judiciary subcommittee on antitrust have recently deepened their scrutiny of digital platforms such as Facebook and Google on antitrust grounds.

The News Media Canada report also asks Ottawa to create an oversight body to regulate digital platforms. And one of Australia’s key recommendations has been to expand intellectual-property rights for publishers, such that platforms would need to license content for use. (Both Facebook and Google generally publish headlines and short descriptions or excerpts, however, while linking to full stories on publishers' websites.) Under the proposal, platforms could be fined up to 10 per cent of their revenue in the region for violations.

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Though it did not provide concrete details, the federal government’s Throne Speech in September said Ottawa would “address” corporate tax avoidance by Big Tech companies. “Web giants are taking Canadians' money while imposing their own priorities,” it said. “Things must change, and will change. The Government will act to ensure their revenue is shared more fairly with our creators and media.”

Sabrina Geremia, vice-president of Google Canada, said the report “ignores” how the search and news-aggregation company has supported publishers. “The News Media Canada report misrepresents how the internet has impacted news publishing and fails to account for those who have not managed to transform their business to the digital world,” she said in an e-mailed statement.

Facebook’s head of Canadian communications, Meg Sinclair, said in an e-mailed statement that the company would prefer to work together with government and news publishers on a solution.

“This report misrepresents the way that some of our products work,” she said. “News organizations in Canada choose to post their content on Facebook to reach prospective subscribers, monetize their content and sell more advertising.”

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