Google in ‘active’ talks with Canadian publishers following string of deals to pay for news in Australia

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Google is in “active conversations” with Canadian publishers about joining its News Showcase platform after striking three major multi-year deals in the past week to pay for news generated by large publishers based in Australia.

The Australian deals, involving Rupert Murdoch-owned News Corp. and two other large publishing groups, come as Ottawa plans to introduce legislation this year to create a comprehensive framework aimed at levelling the playing field between all Canadian news publishers and the dominant players in online search and social media.

A senior Canadian government official said Wednesday the Australian agreements and any ongoing negotiations here won’t be enough to derail that legislation.

Canadian Heritage Minister Steven Guilbeault has said publicly that he intends to unveil a “made-in Canada” plan by summer that includes remuneration for news content and that “one-off initiatives, such as those proposed by digital platforms, won’t be enough” to address a bargaining imbalance between many traditional news publishers and tech platforms such as Google and Facebook.

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Google has signed more than 500 publishers in dozens of countries to its news platform, News Showcase, and remains “in active conversations with Canadian publishers about participating in the program,” spokesperson Lauren Skelly told the Financial Post on Wednesday.

The latest to join, on Wednesday, was News Corp., owner of publications including the Australian, The Sunday Times in the United Kingdom, and the Wall Street Journal in the United States.

The publisher announced a three-year agreement under which it will provide news to Google from around the world in return for “significant payments.” The arrangement also includes the development of a subscription platform as well as the sharing of ad revenue via Google’s ad technology services.

Australia’s largest locally owned media company, Nine Entertainment, this week signed a letter of intent for a $30 million deal to feature its news in Google products, according to a report in The Guardian. That came within days of Australia’s Seven West Media signing its own multi-million-dollar deal to join Google Showcase.

The three deals in Australia come as that country’s government debates final passage of a mandatory bargaining code aimed at levelling a negotiating imbalance between the dominant tech players and news producers whose content they display through search and news feeds.

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Google and Facebook have strenuously objected to the mandatory code, which would prevent the tech platforms from choosing which publishers it deals with and would subject them to the uncertainty of binding arbitration in determining payments.

Google has already threatened to pull its search function from Australia, and Facebook’s managing director in Australia and New Zealand said Wednesday that the social media platform will restrict publishers and people in Australia from sharing news content in response to the proposed new media bargaining law.

Facebook spokesperson Meg Sinclair told the Financial Post on Wednesday that Canadians users “will no longer be able to share content from Australian publishers on Facebook” as part of that announcement. She said she could not comment on how the social media giant would respond to Canada’s plans to legislate the relationships between publishers and tech platforms.

“We haven’t seen the proposed legislation yet, so wouldn’t be able to share what our reaction would be,” Sinclair said.

Despite the posturing by the tech giants, Australian government officials were quoted in media reports this week suggesting that the negotiated deals with Google would not have been possible without the proposed code being in the works.

The Department of Canadian Heritage has been studying the Australian bargaining model as well as a remedy adopted in France that focuses on licensing and copyright.

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The idea behind Australia’s mandatory bargaining code is to prohibit the large tech platforms from excluding creators of news content who don’t agree to terms they dictate, which Australia’s competition authority says would amount to allowing the dominant online search and social media players to determine winners and losers among publishers.

While governments and regulators have been focusing on how publishers can be compensated whether their content comes up in searches or news feeds, Google has created News Showcase and begun making deals with individual publishers. Last October, the tech firm said it had set aside US$1 billion for News Showcase, which would pay media outlets for the news items displayed on its platform and give readers select access to selected stories that are behind a publisher’s paywall.

Only two small digital-only Canadian media players — Narcity, which targets millennials, and Village Media, a local news operation in Ontario — identified themselves among the first 200 publishers from North America, South America and Europe to sign on to Google’s News Showcase platform in October.

John Hinds, chief executive of News Media Canada, an industry association, said he is hopeful the Canadian government will follow Australia by unveiling legislation to govern negotiations and bargaining power.

“As we have seen in Australia and in France, they have only come to the table with appropriate offers when there is legislation,” he said. “We also believe that we need the legislative framework as without it we don’t have long-term security.”

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Michael Geist, a law professor at the University of Ottawa and Canada Research Chair in internet and e-commerce law, said the deals struck in Australia over the past week are in keeping with Google’s long-held strategy of paying only for “value-added licensing” of news.

He suggested that publishers that refuse to take part on these terms may be gambling.

“I assume they’re hoping that government intervention will allow for a better deal,” he said. “But as the Facebook move to block news sharing in Australia demonstrates, this may not be a bluff and could end up harming Canadian media companies far more than the Internet companies.”