Explained: Why New Zealand is mulling a law to make Facebook, Google pay for news

Do tech giants benefit unfairly from news shared on their platforms? New Zealand certainly thinks so. The country is now mulling a law that will require companies like Alphabet Inc, which owns Google, and Meta Platforms Inc, which owns Facebook and Instagram, to pay media organisations for news that appears on these platforms.

New Zealand’s Broadcasting Minister Willie Jackson said that the country will introduce a law which will require the tech giants to pay media companies in the country for local news content, according to a report in the news agency Reuters.

Jackson said in a statement on Sunday that the legislation will be modelled on similar laws in Australia and Canada. “It’s not fair that the big digital platforms like Google and Meta get to host and share local news for free. It costs to produce the news, and it’s only fair they pay,” he said, according to a report in The Wall Street Journal.

Also read: Meta threatens to ban news on its platforms if US Congress passes new journalism bill

Why ask tech giants to pay?

It’s a debate that has been ongoing for a while. News publishers believe Facebook and Google benefit from the news that appears on their feeds, as it draws several users to the platforms.

According to a Pew Research Center survey conducted between 26 July and 8 August 2021, about 48 per cent of American adults get their news from social media. A third of US adults (31 per cent) say they get news regularly on Facebook, while about one in five Americans (22 per cent) say they regularly get news on YouTube. Twitter and Instagram are regular news sources for 13 per cent and 11 per cent of Americans, respectively.

While global data is not available, this survey gives us some insight into the news consumption habits of users.

The social media platforms have only to gain. They get clicks, engagement and even revenue from the content that is published by media organisations, many believe.

However, it’s the news organisations who suffer, especially the smaller newspapers as more advertising goes online. Many news outlets find it difficult to negotiate commercial deals with tech companies, a report in The Wall Street Journal says.

What is New Zealand’s plan?

New Zealand hopes that its legislation, which will require tech companies to pay news outlets, will act as an incentive for digital platforms to reach deals with local news outlets, according to Reuters.

“New Zealand news media, particularly small regional and community newspapers, are struggling to remain financially viable as more advertising moves online,” Jackson was quoted by Reuters as saying. “It is critical that those benefiting from their news content actually pay for it.”

The new legislation will go to a vote in parliament where the governing Labour Party’s majority is expected to pass it.

Similar to the laws in Australia and Canada, New Zealand’s proposal will let Google and Facebook negotiate with publishers without any interference from the government. However, in case the two parties fail to meet an agreement, the law will chalk out a negotiating process, which will be mandatory, reports WSJ.

What have been reactions to the proposal?

Tech giants feel like they are misunderstood and have claimed that they have reached out to media companies and cracked deals with them even before the news of a possible law surfaced.

In New Zealand, Facebook has commercial agreements with three publishers. NZME Ltd, which owns newspapers in the country, said it reached its independent agreements with both Google and Facebook earlier in the year, but still supports the government’s proposal. “We are supportive of the government legislating as it ensures the future sustainability of our local news media and contributes to a healthy media ecosystem,” NZME chief executive Michael Boggs told WSJ.

According to Meta’s regional policy director, Mia Garlick, the proposal misunderstands the relationship between Facebook and news, noting that publishers are the ones who control whether and how their content appears on the platform, the report says.

Has the law helped news outlets in Australia?

In February 2021, Australia passed a law that required Facebook and Google to pay local media outlets and publishers to link their content on news feeds or in search results.

Called the News Media and Digital Platforms Mandatory Bargaining Code, it was introduced to “ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia”.

Before the law was introduced, Google threatened to remove its search engine from Australia. In February, Facebook blocked news on its platform while the legislation was being debated. It also reportedly removed posts from the health departments, emergency and crisis services, and Australia’s Bureau of Meteorology.

“They may be changing the world, but that doesn’t mean they should run it. We will not be intimidated by this act of bullying by BigTech, seeking to pressure parliament as it votes on our important News Media Bargaining Code…,” Scott Morrison, Australia’s then-prime minister, had said.

It’s been more than a year since the law came into effect and Australia has said it has worked. Since the News Media Bargaining Code took effect, the tech firms have inked more than 30 deals with media outlets compensating them for the content which generated clicks and advertising dollars, a report by the country’s treasury department has said.

What about Canada?

In April, Canada introduced the Online News Act, a law that can force platforms like Facebook and Google to pay news publishers for their content. The law lays down rules that mandate the platforms to negotiate deals with news publications.

“Tech companies like Facebook profit from the work of news publications and hence must get a chance to negotiate fair deals with them,” Pablo Rodrigues, Heritage Minister of Canada had said in a statement.

In October, Facebook had warned that it could block sharing of news content on its platform in Canada over the legislation.

“We believe the Online News Act misrepresents the relationship between platforms and news publishers, and we call on the government to review its approach,” Marc Dinsdale, head of media partnerships at Meta Canada, said in a blog post.“In the face of adverse legislation based on false assumptions that defy the logic of how Facebook operates, we believe it’s important to be transparent about the possibility that we may be forced to reconsider allowing news content sharing in Canada.”

The Canadian government had said that they were having “constructive conversations” with Facebook, reports Reuters. “All we’re asking the tech giants like Facebook to do is negotiate fair deals with news outlets when they profit from their work,” Rodriguez said.

With inputs from agencies

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