The government of Prime Minister Justin Trudeau recently tabled the Online News Act, a proposed news media bargaining code law similar to one that Australian authorities have used to force Google and Meta (Facebook), to sign multi-million-dollar deals with many of Australia’s largest news publishers and broadcasters.

Yet major concerns have been raised about the lack of transparency surrounding these deals. Moreover, some experts have warned that instituting an Australian-style bargaining code in Canada could compromise the independence of the press and increase Canadian news outlets’ dependence on the world’s most powerful tech companies. For these reasons, the government should consider an alternative policy option: redistributing revenues from digital platforms through an independent fund – an approach which many stakeholders say would be a more effective and accessible way of supporting journalism.

There is a clear need for such support. As people increasingly seek information online and via mobile devices, digital platform companies are collecting growing troves of our personal data and raking in huge profits selling access to it to advertisers. Meanwhile news outlets’ own ad revenues have declined precipitously, and many have responded by shrinking their newsroom budgets through staff layoffs and newsroom closures.

Addressing this crisis, which has left many communities without reliable local news coverage, is a laudable goal. Yet adopting a Canadian version of Australia’s News Media and Digital Platforms Mandatory Bargaining Code is a terrible strategy for achieving it.

This Australian law is “bad media policy,” warns Joshua Benton, founder of the Neiman Journalism Lab at Harvard University. He argues this is because Australia’s bargaining code is based on a deeply flawed premise: namely, that news organizations should get paid money for links to their content that appear on social media and search engine sites.

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More than a year after the code was signed into law in February 2021, the Australian treasurer has yet to designate a single company as a digital platform, meaning that neither Google nor Facebook nor any other platform has actually been subject to Australia’s new regulations about mandatory bargaining and arbitration between platforms and news outlets.

As Rod Sims, former chair of the Australian Competition and Consumer Commission, the architect of the code, explained, the point of the law was never really to actually enforce it. The new rules around arbitration — or, rather, the prospect of being designated as a digital platform and thus subject to these rules — were merely a “threat” used to force Google and Facebook to sign deals to pay money to news businesses in Australia, he says. Sims estimates the total value of the agreements that resulted from this threat at more than 200 million Australian dollars (about $187.5 million Canadian).

The details of these financial deals between Australian news outlets and the platform giants remain shrouded in secrecy because the contracts all include non-disclosure agreements. Yet a recent investigation found evidence that two media corporations that together own 90 per cent of Australian newspapers and control much of the country’s TV market benefited disproportionately. These same two companies — Nine Network and Rupert Murdoch’s News Corp — which reportedly received 50 million Australian dollars ($46.9 million Canadian) from Google alone — also happen to have lobbied particularly hard for adoption of the code.

Meanwhile, smaller outlets were initially shut out of these deals altogether, and Facebook continues to refuse to negotiate with some public interest journalism organizations such as The Conversation. Many smaller outlets have since been able to band together and bargain collectively. However for members of the Public Interest Publishers Alliance in Australia, this was only possible with the help of a billionaire’s philanthropic foundation, and some observers consider it unlikely that smaller outlets will ultimately gain very much.

Minister of Canadian Heritage Pablo Rodriguez has pledged that there will be greater transparency in Canada’s efforts to redistribute platform companies’ revenues to news media. Yet many participants in a stakeholder engagement process that his department held last year believe this could best be achieved by a completely different policy.

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After soliciting feedback from a diverse range of stakeholders on the idea of instituting an Australian-style news media bargaining code law, the department concluded that “many participants were opposed to this tool on the basis that it may further entrench more-established players on either side of the negotiations and that it would be less accessible to smaller outlets.”

While some participants expressed enthusiastic support for the idea – including the newspaper lobby group News Media Canada and domestic telecom giants Bell Media and Rogers Communications – independent experts, a local newspaper publisher, an independent broadcaster and others urged the government to instead redistribute platform revenues through an independently administered public fund.

This alternative policy option, which is also supported by many unions representing journalists and other media workers, has several clear advantages. First, redistributing money from platform companies through a public fund would be more transparent.

Canadians have a right to know about any money that news outlets are receiving as a result of any legislation the federal government enacts in the name of supporting journalism. Such information would be more accessible to all if the money were distributed via a public fund, which would be subject to the same types of disclosure requirements as other public bodies, rather than a bargaining code law like the Online News Act.

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While this proposed law will be subject to an annual audit, and reviewed five years after it takes effect, it contains no other binding disclosure requirements. Moreover, the bill includes much strong language that prohibits the disclosure of a broad range of information that participating platform companies and news businesses deem “confidential.”

Many believe that channelling platform money through an independent public fund would make this support more accessible to smaller outlets and those from marginalized communities than payments negotiated through a bargaining scheme. The latter approach would likely privilege more powerful players in the media industry in Canada, just as it did in Australia.

Distributing the money through an independent fund would also better guarantee the independence of the press in Canada. Such independence requires that journalists be able to freely report on issues of concern to the public, including the activities of powerful companies such as Google and Facebook. This could, to say the least, be difficult if news outlets are taking money directly from these same companies.

Given these potential benefits of an independent fund for journalism, the Liberal government’s announced bargaining code law should not be the only policy option on the table.

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Isabel Macdonald
Isabel Macdonald is a research co-ordinator at the Centre for Law, Technology and Society, University of Ottawa, and also does research for the Centre for Media, Technology and Democracy, McGill University.

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