Reports are suggesting that Canadian and Australian officials are going to meet after Meta pulled out. It’s unclear what they can accomplish, though.
It seems to be the beginning of the end for the large media companies free ride at Meta’s expense is gradually coming to an end. In Canada, the large media companies hope of freeloading off of Meta ended before it even started thanks to Meta pulling news links in August of last year. It ended the large media companies hopes that they could get free money in addition to free traffic.
In Australia, media companies are quickly realizing how lucky they had it when Meta agreed to make those ransom payments in the first place. Recently, Meta said that they would not be renewing the “deals” they signed. Australian government officials reacted in anger, furious that Meta is no longer going to hand their media companies free money for no real reason. In response, some government officials angrily accused Meta of a dereliction of duty for not paying the large media companies expenses.
As many know, the Australian link tax, otherwise known as the Australian News Bargaining Code, largely benefited the largest players. News Corp, for instance, hoovered up a lions share of the revenue that came from the Code while leaving a number of smaller players high and dry. While many supporters of the Code insisted that the Code brought about a new golden era in journalism in the country, there is scant evidence to show that it actually was a net benefit to the sector. In fact, there is plenty of evidence to suggest that the sector contracted anyway with News Corp, the biggest beneficiary of the Code, slashing 1,250 jobs. So, evidence showing a net positive effect of the Code on journalism jobs have been, at best, dubious.
Now, large Australian news corporations are realizing that their greed is going to result in them sharing the same fate as Canadian news outlets – having to live without Meta platforms. It resulted in significant lobbying for the Australian government to do something about the situation now that the money taps are going to soon run dry. The problem is that there’s precious little they can do about it. Because of it, it seems that there are going to be talks between Australian and Canadian officials to discuss the situation. From MediaWeek:
Meta is set to be at the centre of “important discussions” between federal communications minister Michelle Rowland and the minister for Canadian heritage, Pascale St-Onge.
“Australian and Canadian public service representatives have met on a number of occasions to discuss respective regulatory frameworks, approaches and emerging issues,” a spokesperson for Rowland told Capital Brief.
“The Minister for Communications, the Hon Michelle Rowland MP, is scheduled to meet the Minister for Canadian Heritage, the Hon Pascale St-Onge, later this month to continue these important discussions.”
After Meta announced its decision to exit the deals, communications minister Rowland said Australian journalists and news media publishers “provide one of the most important public goods in our democracy” and “deserve to be fairly compensated for the investments that they make in that.”
“The government is very disappointed at this outcome. The decision undermines the viability of a healthy, democratic, open media. It removes a significant source of revenue to Australian news media publishers.
“The government is committed to the news media bargaining code, and we’ve made it clear that we have always expected Meta to negotiate in good faith under that code. The government has sought advice from both Treasury and the ACCC, and we’re working through the processes under the news media bargaining code.”
OK, uh, first of all, if you are depending on Meta entirely to ensure the viability of the news sector, you’re doing it wrong. Let’s just get that out of the way.
Second of all, if the large media companies are hoping that the two countries will somehow find a solution in all of this to magically get Meta back on board, they are going to be disappointed. Seriously, what are the options?
Are they going to collectively pass a law banning Meta from operating in both countries unless they agree to these deals? That would be a violation of a number of trade agreements in the first place as it discriminates against an American business. So, that’s likely out of the question.
Are both countries going to try and argue that Meta is being anti-competitive in doing this? Meta is literally doing the exact opposite of being anti-competitive by pulling out of a particular market. It’s a legal non-starter.
What’s more, even if countries find some way to financially punish Meta for the crime of not propping up the badly run large media companies, Meta also has the option of pulling out of both countries altogether. That would be a move that would cause even further harm to all involved, though especially for citizens in both countries.
Are both countries going to start digging into the trade agreements to compel the platform to host news links? Good luck with that. There’s nothing (at least to my knowledge) compelling the platforms to host a particular kind of content on their platforms.
The bottom line is this: the hands of both countries are tied here. Anything they come up with is either going to be a dead end or cause even further harm in this situation. I say let them talk because there isn’t going to be any viable solutions that crop up that will magically solve all of their problems.
Ultimately, the Canadian government is already using the last tool in the chest that they can use in this situation. The Canadian government is bailing out the news sector – a move that has also ended up resulting in Bell Media slashing 9% of their workforce and the CBC slashing 10% of its workforce.
The only thing that is going to even begin to reverse this mess is the rescinding of both the Australian News Bargaining Code and the Canadian Online News Act. Then, things can start moving in a positive direction, gradually moving back towards basic sanity. It’s unlikely either country is going to move in this direction, though. So, this mess isn’t going to get resolved any time soon and the media companies are going to find themselves increasingly left behind as they are forced to do business without the help of Meta. An unfortunate situation, but a situation that was entirely self-inflicted.
Drew Wilson on Twitter: @icecube85 and Facebook.
