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NP commentary
Published July 6, 2023 • read for 3 minutes
Bill C-18 would require Google and Facebook’s parent company Meta to make commercial deals with Canadian news publishers whose content they use. Photo by Arnd Wiegmann/Reuters/File; Charles Platiau/Reuters/File
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Threats from Google and Facebook owner Meta to remove Canadian news from their platforms and deprive their users of access to information they rely on is a cynical bargaining tactic. Instead of entering into revenue-sharing agreements with publishers as required under Bill C-18, the Online News Act, the companies seek to demonstrate their market power and extort sympathy for their campaign to push their duopoly into the online news market. maintain online advertising sales.
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More than 80 percent of advertising revenue in Canada goes to Google and Facebook. Much of that ad revenue is generated from news distributed on their platforms, made by news publishers, including Postmedia. The tech giants have not gained this market share through innovation, but through non-competitive practices.
Beginning in 2005 with its acquisition of ad server DoubleClick, Google began to gain increasing control over the financial marketplace that connects sellers and buyers of online advertising. Not only does Google receive the lion’s share of revenue from ad space sales, it also gets paid on the buy side because it owns the ad serving infrastructure itself. It uses this power to manipulate the market and prevent competitors, especially news publishers, from gaining a foothold.
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Google also colluded with Facebook, the biggest threat to Google’s ad dominance, to give it preferential treatment under the so-called Jedi-Blue deal to “ripe ad auctions,” according to a US antitrust lawsuit.
This predatory behavior is most likely illegal and clearly shows that Google and Facebook don’t just benefit from having developed a better product. Those looking to buy ads have little choice but to go through Google’s infrastructure. Meanwhile, Facebook and Google advertise to readers by displaying news articles published by media organizations that receive none of the ad revenue.
The Online News Act helps level the playing field so that news publishers can get back to journalism.
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For decades, news companies have relied on advertising sales to fund their newsgathering activities. Publishers must compete for advertising customers as well as newsreaders and subscribers.
On the editorial side, where there is no monopoly, publishers compete energetically, aggressively and healthily, despite the increasingly venomous narrative that this industry is somehow unwilling to adapt to the digital age. There are more news organizations, new and old, bringing more news than ever before.
Matt Stoller: Google is stealing from Canadian newspapers and advertisers
Joel Trenaman: Facebook’s ‘illegitimate’ deal with Google is bigger threat than whistleblower revelations
This is hardly an industry in its death throes, despite the much-publicized challenges.
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The transition from print and television news to digital publishing has rarely been smooth as Canadian news companies face fierce competition not only from each other but also from US properties as the internet gave readers almost instant access to news anywhere.
And yet news publishers, especially established brands like the National Post, have continued to deliver valuable and important journalism to readers for a quarter of a century. News companies may not be as big as they were in the pre-internet era, but there is hardly any lack of news or lack of innovation.
Across the Postmedia brands, we continue to attract millions of readers with coverage our readers want, trust and are increasingly willing to pay for.
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We are confident that we are up to the challenge, even considering the existence of a hostile government policy of increased funding for the CBC, which competes with the work of the private news media, but distributes its news for free. The federal government also enforces tough rules on news broadcasters through the CRTC.
This is not an industry in crisis because of its own failures, but rather because a global monopoly on digital advertising sales was allowed by governments who fell asleep in the switch. The federal government has good reasons to stand firm and not give in to the tech giants.
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