Opinion: Premium news publishers deserve a level playing field with Google and Facebook

On Tuesday Jason Kint, Chief Executive Officer, Digital Content Next appeared before the House of Commons Standing Committee on Canadian Heritage hearing on Bill C-18, the Online News Act. This is his statement. 

Good morning. I am here on behalf of Digital Content Next (DCN). DCN is the only trade organization exclusively focused on the digital future and dedicated to serving the unique and diverse needs of high-quality digital content companies that manage trusted, direct relationships with consumers and advertisers. Our members include more than sixty media companies and thousands of brands including news organizations ranging from local to national to international such as The New York Times, Washington Post, Boston Globe, Wall Street Journal, The Guardian, Philadelphia Inquirer, and the Financial Times.

I am pleased to express our full support for Bill C-18, the Online News Act. As you know, the Online News Act follows enactment in 2021 of a similar bill in Australia, the News Media Bargaining Code, which DCN also strongly supported. I closely followed your hearing on Friday including the testimony of the former Australian Competition & Consumer Commission, Mr. Rod Sims, and believe there is no greater witness and evidence as to the strength of this bill than the experience in Australia.

At a time when parliaments from around the globe are investigating and learning from each other on how the “duopoly” of Google and Facebook have captured nearly all growth in digital advertising, draining the lifeblood of the local news press, it is critical we learn and then build and improve on each other’s work as you will be doing by passing C-18.

In my testimony today, recognizing you’re already familiar with the details of the bill, I will briefly list what I see as the most important elements and I’m happy to take any questions on the broader marketplace. As background, I have nearly thirty years of technical and operating experience in digital media having spent nearly two decades running highly trusted digital content businesses — even writing code at the advent of the web in the early-90s — before transitioning into my current role advancing the future for trusted content brands. Now on to C-18.

First, the law will help rebalance bargaining power. Publishers’ brands are proxies for trust and value. The inclusion of news content from premium publishers has certainly played a large part in developing the daily search and social media habits of Canadians allowing Google and Facebook to become dominant gatekeepers. The lack of protection and negotiating rights for this content coupled with nearly unlimited access to the data of the web for microtargeting advertising, has led to a marketplace where publishers and their content have become interchangeable commodities. An expensive and vitally important news report can be reduced to the same value as an aggregated or copied piece of amateur work. The Online News Act will protect publisher’s intellectual property rights and provide balance in negotiations with online platforms to receive fair compensation and thus to promote a free and plural press.

Second, the bill under consideration relies primarily on the market to determine how and how much publishers should be compensated for their content. This flexible approach allows for diverse publishers to seek deal terms specifically tailored to their business needs. Some startup publishers may want to forgo revenue in favor of audience reach while established publishers may want to ensure maximum return for their high-value brands. Thus, we do not support a government role in setting rates for content. And the bill’s Final Offer Arbitration is an elegant solution to accelerate negotiation towards a fair deal at a time when it may likely determine how many journalists can be employed for the coming year.

Third, the bill applies only to a situation in which there is a “significant power imbalance” between the news publisher and the intermediary platform. Importantly, the news publisher retains the option whether it wants to participate. The dominant platform does not.

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Fourth, in no way shape or form does it change the structure of the web or in any way demand payment for links. This is misinformation that we spent many late hours rebutting in Australia as Google and Facebook’s favorite advocates suggested the law would “break the internet.” Two of these advocates shared commentary to this committee on Friday. Nevertheless, the Internet is still working as well as ever in Australia.

Fifth, the bill permits publishers to bargain as a group. As I was pleased to learn from Mr. Sims on Friday, the small publishers who collectively bargained in Australia received more payment per journalist than the larger publishers. That’s exactly the framework we seek to bring new resources to the local and emerging press media.

In summary, the bill creates a new duty to bargain and permits publishers to bargain as a group. These two provisions form the lynchpin of this bill. DCN supports the Online News Act as a reasonable and balanced but also necessary and urgent reform that will enhance market-driven negotiations to enable news publishers to receive fair compensation for the content dominant platforms obtain, share, use to sell advertising. We’ve seen this work in Australia. The ability for trusted and valued premium publishers to have an equal playing field is critical to the permanence of Canada’s news marketplace, and we at DCN urge the House of Commons to advance this bill.