Internationally, regulators are increasingly taking measures to address the impact that platforms have on the news business. In response, big tech platforms are trying to make the case that news is not central to their popularity or success, and going so far as to block news and political content in the face of new journalism-funding regulations taking shape around the world.
“This is now a global phenomenon and big tech platforms like Meta and Google can’t keep using bullying scare tactics. They have to show up and be prepared to negotiate meaningfully,” according to Jordan Guiao, research fellow at The Australia Institute’s Center for Responsible Technology.
Lawmakers in many different jurisdictions have begun to respond to the critical damage big tech platforms have inflicted on the funding model of the world’s media business. Those steps include the News Media Bargaining Code in Australia, the Online News Act in Canada and the proposed Journalism Competitive and Preservative Act in the U.S. (which Digital Content Next has endorsed). These laws are designed to mandate these tech companies to compensate publishers for the inclusion of the news content that is shared, or found their platforms.
To bolster its position, Meta points to a study it commissioned from NERA economic consulting group which concluded that having platforms pay for news content wasn’t justified. However, advocates for the media industry dispute the accuracy of the findings.
“People who consume news tend to spend a lot of time on a platform,” said Paul Deegan, chief executive of Canadian trade association News Media Canada. “They go there for news. They come back for more. They’re an attractive demographic in terms of skewing higher on educational attainment and income.”
“Just in terms of value, [big tech platforms] get tremendous value from news,” he said.
Devaluing the news
However, according to Instagram chief Adam Mosseri: “[F]rom a platform’s perspective, any incremental engagement or revenue they might drive is not at all worth the scrutiny, negativity (let’s be honest), or integrity risks that come along with them.”
So, in response to increasing pressure to compensate publishers for news, and their own research findings that it doesn’t provide sufficient value to them, platforms have pulled back on including news content on their services.
In February of 2022, Facebook dropped the word news from users’ “news feed.” And in June this year, publishers noted a significant drop-off in traffic from the site, suggesting an algorithmic adjustment to devalue news. And, after the launch of Threads earlier this month, Mosseri said that the platform would not take any steps to “encourage [politics and hard news] verticals.”
In a direct response to policy efforts platforms have gone so far as to block news content altogether. In 2021, Meta not only blocked users in Australia from seeing news content on Facebook but prevented them from posting links to any news stories, regardless of where they were published. In less than a month, the company relented and has since signed licensing deals with publishers in Australia. Job postings in the country’s media sector are up 46% as of April this year.
However, with the passage of the Online News Act in June, Meta and Google have taken a harder tack against these regulatory efforts. Already the platforms have canceled previously struck deals with Canadian publishers and have started to block news in the country.
In February, Google conducted a test to assess the impact of blocking news access for Canadians altogether as it evaluated possible responses to the Act. The company is reportedly holding off on fully implementing its response until the regulations are made by the Canadian Radio-television and Telecommunications Commission. Since the passage of the Act last month, Meta has started to intermittently block Canadian news sources on its various services.
According to Canadian Prime Minister Justin Trudeau, Canada has no plans to back down. In fact, they’ve taken the fight to a familiar battlefield on this issue: advertising. Publishers and the federal government in Canada have pulled their advertising from Meta’s services. Per regulatory filings, Canada accounts for $3 billion of Meta’s $117 billion in annual revenues. “The company is running the very real risk of losing more in revenue than they would pay news businesses under the Online News Act,” Deegan told the Financial Times.
The battle has escalated to news publishers rejecting Meta’s ads on their sites, which were purportedly intended to inform Canadian audiences about the news blocking initiated by the big tech platforms in Canada.
Navigating what comes next will be the challenge facing both regulators and publishers.
As of now, a version of the JCPA in California passed the state assembly in a 55-6 vote in June. Despite this, the bill has been put on hold for two years, with an initial state senate hearing scheduled for July 11 this year pushed back to 2024.
Other commentators in Canada view the contentious moves in response to early attempts to regulate the big platforms as an opportunity to further address the wider problems caused by the big tech companies.
“While the government of Canada certainly does not have the power to go back in time and block the consolidation that has occurred in the digital ad market, it is able to empower our competition and privacy commissioners to conduct an investigation into how Big Tech operates in the Canadian ad tech market,” wrote Taylor Owen, Beaverbrook Chair in media, ethics and communications, and Supriya Dwivedi, director of policy and engagement at the Centre for Media, Technology and Democracy.
As well, there’s skepticism that Meta and Google can survive the reputational risks of continuing to block legitimate news sources on their platforms.
“Essentially, I don’t see blocking of news as a viable action for Meta and Google. From the Australian perspective, the news block was a bluff, and we called them out on it. In Canada I believe this will be much the same. And if they prolong it in any way, their reputation as a platform for misinformation will only be validated,” said the Australia Institute’s Guiao. “Meta and Google need news content to legitimize the accuracy, dependability and truthfulness of the information in their platforms.”