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Guest Essay
By Julia Angwin
Ms. Angwin is an opinion and investigative journalist.
A fierce war is brewing between big tech companies and the informal press over how to share the profits generated through news content for the tech giants. The long-term of our data ecosystem, a pillar of democracy, depends on the outcome.
Last week, after months of difficult negotiations, Google and the Canadian government reached an agreement that would require the company to pay Canadian media about $73. 5 million a year. Canadians are no longer at risk of having all news content removed from their search results by Google.
The settlement is far less than Canada wanted — it had sought $126 million — and a small fraction of the estimated $550 million that news publishers deserve from Google. The lesson here is clear: As much as publishers may be suffering right now, they must continue to stand firm against the bullying tactics of Big Tech.
These platforms gained their audience in part by sharing news content free. Now they are using their market power to force the press to continue to do business on their terms.
Canada is a country for the world. In June, his government passed a law that will require tech corporations to pay for news content presented on their platforms. In August, Meta, the owner of Facebook, responded by blocking Canadians from viewing or sharing news on Instagram and Facebook. Meta claims they have generated significant benefits for publishers.
Meta’s current block is already hurting Canadian publishers, especially smaller ones. Chuck Lapointe, chief executive of Narcity Media, which is designed for Gen Z and millennials, wrote that his homes have suffered a 30% drop in traffic and a 15% drop in profits since the lockdown began, forcing him to lay off workers. 16 employees. The blockade of Meta is “killing” us, wrote Gabriel Ramírez, a journalist and co-founder of The Bridge Canada, a news outlet for Latin American immigrants.
Canadian publishers were even more terrified of a boycott of Google, as Google drives even more traffic to news. A few months before the law was passed, the company conducted a week-long verification that excluded Canadian media from its findings, in what it described as a “potential product response” to the law.
It’s like saying, “Here’s a fancy place to eat; it would be a shame if there was a fire,” said David Beers, editor of a regional nonprofit news site in B. C. , The Tyee, which gets about a third of its traffic from Google.
The Canada-Google agreement sets a precedent: it prevents Google from influencing the survival or failure of media companies.
In recent years, after facing strong complaints about profiting from the hijacking of news content, Google and Meta have begun striking personal deals with individual outlets around the world (including the New York Times). Google says it has committed $1 billion to journalism. and has closed media deals in more than 22 countries since 2020.
Critics argue that without government intervention, deals made through tech corporations allow them to determine which media outlets and can simply allow them to financially starve those who criticize their business or political interests.
“The Internet is meant to provide a playing field of points. Instead, those platforms pick the winners,” said David Skok, founder and CEO of The Logic, a business and generation news publication. He said his post is one of only two national news publications not published in Canada that had not signed a deal with Google or Meta before the law’s passage.
Two years ago, Australia became the first country to push a points playing field, enacting a bargaining code that required Google and Meta to negotiate invoices with news publishers. Facebook shut down news content in Australia for about a week, but eventually complied. .
Australia’s code has proven to be a boon to that country’s news industry, prompting the hiring of more than 100 sleuths and generating more than $130 million in annual bills to Australian media outlets, large and small. According to Rod Sims, former president of the Australian News Agency. Competition and Consumer Affairs Commission.
When other countries initiated similar efforts, however, Google and Meta started pushing back more aggressively. When Brazil considered a similar law last year, Google posted ads on its popular search page stating that the law would “force Google to fund fake news.” The bill was withdrawn. South Africa and California are facing similar pushback.
Canada’s proposed regulations required Meta and Google to pay media outlets a minimum of four cents of their annual revenue in Canada. For Google, that would have been about $126 million, according to government estimates.
Google says that less than 2% of search queries in Canada are for news. “Simply put, four percent appears to be an arbitrary figure that overestimates news-related link advertising,” Google wrote in its public comments on the law. The government appears to have accepted Google’s terms by agreeing to cut the minimum payment by nearly half.
But a new working paper concluded that Google and Meta are vastly undercounting the value of news to their platforms. The study, by researchers from Columbia University, the University of Houston and the Brattle Group consulting firm, estimated that about 35 percent of searches on Google were “seeking news media content.”
“Information is to Google what sports is to cable,” said one of the study’s authors, Haaris Mateen, an assistant professor of finance at the University of Houston. “Without it, the product loses its maximum value. “
The study estimates that Google owes U. S. publishers 50% of the value generated by news, which it estimates at $10 billion to $12 billion in profit sharing per year. The study shows that Facebook, whose users spend less time on data (about 13% of their time), owes U. S. news publishers $1. 9 billion.
The researchers’ figures were based on surveys of users’ habits on the platforms, which do not publicly percentage users’ habits. But while the survey’s estimates are completely accurate, they illustrate how publishers are fighting Big Tech for peanuts (scores of millions of dollars) when they would. You may be owed billions. That’s why Google has fought so hard in Canada: it has managed to set the bar incredibly low for global information bills. Mateen estimates that Google owes Canadian publishers $550 million. “The amount that Canadian publishers will get under the Google deal is minuscule compared to what they deserve to get,” he said.
But it’s a start. Now other governments need to follow suit with similar efforts. The struggle is painful. But Big Tech needs to start paying up and paying fairly.
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Julia Angwin is a journalist who writes about generational politics. You can follow her on Twitter, Mastodon, or her private newsletter.
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