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Around the world, news publishers are crunching numbers to figure out how much Google and Meta owe them for publishing news online.
But these numbers are shrouded in secrecy and unlikely to be made public. Rather they will be used to extract revenue from Google, which is offering money to publishers around the world in a bid to forestall government legislation impelling them to pay up.
The publishers are looking not just at advertising revenue lost to the platforms, but also the price of licensing content in the future, the value of the news brands, the value of customer data and how much Google’s monopoly in the advertising market benefits Google, which is on both sides of the market; assisting publishers with managing their advertising inventory and then also buying it from the publishers.
As well, publishers may need to work out a price for any content being used for large language models.
In March 2021, Australia became the first country to use competition law to push Google and then-Facebook to pay for news. Aiming to rectify the power imbalance between the large platforms and the news publishers, Rod Sims, then-chair of Australia’s competition commission, designed a news media bargaining code that gave the government the right to “designate” certain platforms and require them to negotiate with publishers and come to an agreement over what was owed.
Knowing the government had the right to force negotiations impelled Google and Meta to make agreements on their own and, as a result, more than $140 million USD has been injected into journalism in Australia each year since the code began, according to Sims.
Now Canada, Brazil, Indonesia, South Africa, New Zealand and the United States are looking at similar laws. Each case is different. Analysts expect Canada to pass its C-18 law in the next couple of months. Indonesia has discussed a draft executive order from the president’s office, while South Africa’s competition authority has only just begun its inquiry and likely won’t get a law on the books for another couple of years.
In the meantime, publishers and publishers’ associations have all done detailed calculations as to what they think Google and Facebook owe.
It’s a big job and, like any negotiation, the process is delicate. Google and Meta don’t reveal how they use news, how they value it, or how it’s distributed. Publishers in smaller markets are afraid to push too hard because they don’t know whether Big Tech will simply exit the market.
In Canada, Google and Facebook practiced dropping news links in Feb 2023, leading Prime Minister Justin Trudeau to call on the companies to pay for news instead of blocking it.
In Brazil, the government announced in early May that it would investigate Google after it added a link to its homepage for Brazilian users that warned that the proposed law would ruin the internet. Google also told journalism groups supporting the Brazilian law that it would reduce or halt existing funding for journalism, said Natalia Viana, the president of the Brazilian digital journalism association AJOR. The Brazilian proposal is an omnibus bill and will now be split into two parts in order to help its passage, with the bargaining code part being split up from the copyright aspects of the bill, Viana said in a Whatsapp message. Meanwhile the platforms have further tried to divert lawmakers from the bargaining code law by introducing a self-regulation bill and a free speech commission.
Swiss publishers issued a study that said Google owes the sector $166 million USD annually. Danielle Coffey, executive vice president and general counsel for the News/Media Alliance, a trade association that represents 2,000 news and magazine media outlets worldwide, said U.S. publishers are “owed billions,” but that numbers are being kept confidential as they are likely to be used in arbitration. Canada’s independent Parliamentary Budget Officer has estimated likely compensation to be $329.2 million CAD per annum.
In Indonesia, the U.S., UK and South Africa, publishers groups are not publicizing their estimates of what Big Tech owes.
Added to the desire for secrecy is the fear of prosecution, as sharing numbers could be viewed by governments as paving the way to collusion or price-fixing.
This means that for small outlets, arbitration may be difficult as they don’t have the funding to hire experts to work out what is owed.
Nor do they have the clout. Small publishers want the right to bargain collectively which is what happened in Australia. There, the Minderoo Foundation, an Australian foundation that is actively promoting the code, provided legal help. It teamed up with Country Press, an association of small publishers and gave legal advice to help the small publishers negotiate collectively.
In South Africa, the South African National Editors Forum, a nonprofit membership organization, is also determined to make sure small publishers are included in whatever comes from Google. Some in South Africa are calling for a journalism fund but are not sure who would allocate these funds. A group of South African newspaper publishers, however, is not interested in a one-off fund. They’re seeking guarantees of revenue in the future.
Paul Deegan, president and CEO of industry group News Media Canada, wrote in an email, “In the lead-up to the introduction of (the C-18) legislation, Google and Meta started doing deals with several large publishers, which has led to an imbalance among publishers. The Online News Act will address that and ensure that publishers large and small get a fair deal. That’s certainly what we’ve seen in Australia, where some small publishers have done better than the larger ones on a per capita basis.”
In Taiwan, Google has pledged $9.8 million, over three years, to help Taiwanese media digitize.
Whether bargaining codes take shape across the world, they’re already having an effect because they are pushing Google to make payments to news outlets even before such laws are passed.
Google South Africa declined to comment but Marianne Erasmus, Google’s news partner lead for South Africa, said in a May 10 email, “Google cares deeply about the news and over the past 20 years we have collaborated closely with news publishers to support the creation of quality journalism in the digital age.”
This article was updated to clarify how Google changed its Brazilian homepage.
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