New regulations are forcing big tech to pay news publishers for linking to their content.

Meta and Google made headlines around the globe when they threatened to drop Canadian news from their platforms after the Liberal Senate passed the C-18 bill, which will require the tech giants to pay for news distributed on Facebook, Instagram and Google. 

The bill has been controversial, with some publishers arguing that it only benefits large media houses at the expense of small digital-only outlets. That’s a story that has been told around the world, but the truth is more complicated. Indeed, the Canadian bill is modelled on Australia’s 2021 News Media Bargaining Code, which has injected more than USD 140 million annually into the country’s news media. And, as well as the Murdoch Press, small outlets have benefited.

The tech giants’ response to this new trend of regulations was to refuse to publish news from countries introducing or considering them. In Australia, Facebook temporarily blocked news before the Code was passed but backed down after being criticised for dropping local content during the Covid-19 pandemic and the bushfires. 

Furthermore, as interest in the Code spread, Google quietly threatened to drop local news in Canada, Italy, and other countries where there’ve been discussions about similar legislation. 

It’s a game of brinkmanship as the platforms try to flex their muscles in these markets, and the threat “backfired” in Australia, says Rod Sims, the former competition commission chair who designed the Australian Code.

As nations consider a strategic response to being dropped by big tech, there are lessons to be learnt from the experience of news outlets in Spain. 

In 2014, Spain’s main publishers’ association lobbied the government to introduce the so-called “Google tax”, modifying the existing Intellectual Property law to require news aggregators to pay news publishers for linking to their content. The money earned from licensing fees was to be paid to all publishers through a collective rights mechanism managed by a third entity. All the Spanish outlets, both large and small, would have received a share.

“This law was considered the best approach for a majority of European publishers,” says Luis Enríquez, current CEO at the media company, Vocento and the president of the publishers association when the law was passed. And he adds: “It became the worst communications problem Google ever faced.”

In response to the new law, Google decided to close Google News in Spain, which meant that links to all Spanish news were excluded from its news aggregator.

But the change to Spanish law sparked a division among the country’s publishers. Digital natives opposed the licensing fee, arguing that it would undermine their websites, as they relied on Google News for traffic.  

Today, however, large Spanish publishers say that being dropped from Google News didn’t greatly affect their business. Some of those we spoke to say the measure was revenue neutral. Others feel they benefited from having greater control over their relationships with their readers and advertisers. 

Google News was restored in Spain in 2022 after an eight-year hiatus, when, as part of the legislative process for implementing the EU Copyright Directive, the current Spanish government amended the 2014 clause to allow media outlets to negotiate directly with the tech giant.

Publishers are now signing up for $2m bilateral deals with Google for its Google News Showcase service. Those we spoke to say the current deals for the Showcase service are better than nothing, but many agree that Google should be paying them much more. Some still think that losing the Google tax has been disastrous for the news industry. 

José Antonio Sánchez, founder and CEO of El Confidencial, the largest digital native, says the lesson is to rely on direct traffic that is not filtered through search. “I only believe in frequent, loyal readers who visit our site directly, not via Google.” He definitely agrees that publishers need to unite against big tech. “The pioneering Spanish law of 2014 could have had a huge impact if the publishers had been united.”

Perhaps the best lesson from the Spanish example is that publishers need to unite and negotiate hard to get fair payments from the platforms that benefit from circulating their content. While bargaining codes are not perfectly designed, the case of Spain suggests that they are likely better to support quality journalism than the alternative.

Versions of this article were previously published by other sites and outlets. 

Opinions expressed on this website are those of the authors alone and do not necessarily reflect or represent the views, policies or positions of the EJO or the organisations with which they are affiliated.

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