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Google and Facebook may be stealing, but not from news media

Forcing the platforms to subsidize newspapers won’t solve the problem, only treat the symptom

Economic CrisisMedia

Google and Facebook are stealing money, but they’re not taking it from newspapers—they have been stealing from their own customers. Photo from Flickr.

Are Google and Facebook stealing? It seems they are, but not news stories, as newspaper publishers claim. The digital platforms have been taking advertising away from newspapers and other media for years, but not by stealing it. They took it fair and square by simply offering a better product. Why would anybody want to advertise in a newspaper filled with day-old stories read mostly by senior citizens when they could target their advertising messages precisely to potential customers? Google and Facebook can do that because they know so much about us from following us around online.

As Cory Doctorow points out, Google and Facebook are stealing money, but they’re not taking it from newspapers—they have been stealing from their own customers. It’s a crime in progress that should be stopped immediately and punished severely to deter future offenders.

First, let’s deal with the charge that the digital platforms are stealing news because that’s the easiest one to dispense with. Publishers claim that Google and Facebook steal their content when they post a link to it on their website, which typically appears along with the article’s headline and the first sentence or so of the story. That charge is easily defended under Canadian and international law. A 2011 Supreme Court of Canada ruling in the case of Crookes v. Newton established that simply linking to information does not amount to publishing it.

As for the headline and preview snippet of text, it is covered under the “fair use” doctrine enshrined in copyright law, along with the Berne Convention, an international treaty to which Canada is a signatory, which states: “It shall be permissible to make quotations from a work which has already been lawfully made available to the public.”

There are websites that steal content and republish it under their own banner, as I have found. Sometimes they give me credit, but often they simply take my name off and put theirs on. That’s called content scraping, and it is certainly not what Google and Facebook do.

The platforms were not the first to take advertising from newspapers. Almost as soon as the World Wide Web began in the 1990s, websites started posting sortable databases with listings of homes, jobs and cars. For a fraction of the cost of a newspaper ad, or even for free, they offered a much better service than newspapers could because the listings could be searched using filters such as make, model, colour, price and mileage of car, for example. The classified advertising which had once made newspapers rich and fat soon started draining away.

Then Craigslist started expanding from San Francisco at the millennium and soon covered the continent with local websites offering free classified ads. In Canada, Kijiji launched in 2005 and now offers free ads on its websites in more than 100 cities. All that was left to newspapers were display ads, but they also soon dried up as department stores began to be replaced by big-box retailers, leaving mostly supermarkets. Newspapers hoped to sell ads on their own websites, of course, but the problem was supply and demand, as an almost unlimited supply of websites drove down prices.

Ads became increasingly sold by so-called programmatic exchanges, which instantly matched advertisers with the most suitable computer users. There are dozens of such services, including those operated by Google and Facebook, but almost 75 percent of the ads sold in the United States go through Google Ad Manager. Google is the 800 pound gorilla in the online world due to the popularity of its free search service, which gathers vast amounts of data about user behaviour. Facebook is close behind due to all the data it has accumulated on its members. Google claims that the average return on investment from using Google Ads is 800 percent, which means that it brings in $8 worth of business for every $1 spent by advertisers. That is an almost irresistible value proposition and one that newspapers can come nowhere near matching, even on their amateurish websites.

But being big and profitable wasn’t enough for Google and Facebook, according to Doctorow, as they apparently couldn’t resist putting their thumb on the scale—both thumbs, actually—by representing both buyers and sellers. “When the sale closes,” he notes, “Googbook collects a commission from the advertiser, another from the publisher, and a fee for running the market. And of course, Google and Facebook are both publishers and advertisers… It’s incredibly dirty.”

Working both sides as they do allows Google and Facebook to cash in big time, according to Doctorow, as “51% of every ad-dollar is claimed by a tech intermediary, a middleman that squats on a chokepoint between advertisers and publishers.” This kind of double dealing should be highly illegal, except that anti-trust laws are notoriously lax, especially in Canada. A bill before the US Congress would outlaw the practice by requiring so-called structural separation of digital ad exchanges.

Doctorow, who was born in Toronto but lives in Los Angeles, describes himself as a digital activist but in his day job is a best-selling science fiction author. He has some good ideas for breaking up the online dominance of Google and Facebook, but even if their online ad auctions were cleaned up, it wouldn’t help newspapers much. Another plank in his four-point plan to save news from big tech just might.

Banning surveillance-based ads would level the playing field enormously, argues Doctorow, and would move us back to a context-based system of advertising from the current behaviour-based system. The European Union banned online surveillance without consent for the purpose of ad targeting five years ago. The tech titans have been getting around it, but regulators finally seem to be catching up with them.

As Doctorow notes, this would force advertisers to instead place their messages next to content which might be of interest to their potential customers, which would serve to tilt the playing field back in the favour of publishers. “Killing surveillance ads will make surveillance companies worse off,” he notes. “But everyone else: readers, journalists, publishers, and even advertisers will be much better off.”

Doctorow urges against what has been happening, first in Australia and now in Canada, with publishers demanding so-called link taxes on platforms that carry links to news stories. “These laws, also called ‘bargaining codes,’ start with the assumption that allowing the public to post links to the news… is an unfair business practice,” notes Doctorow. “But that’s wrong. There are lots of things wrong with how the tech sector treats the media sector, but linking to news stories is good.”

Bill C-18, the Online News Act, which is currently under study in the Senate, would not only entrench old media at the expense of more innovative online publications, it would likely backfire since Google and Facebook have threatened to stop carrying links to news stories rather than paying publishers. Since most readers now find news stories on one platform or the other, that would be counter-productive, to say the least.

Cracking down on the worst excesses of Big Tech would seem a better way to go, along with more effectively protecting online privacy rights.

Marc Edge is a journalism researcher and author who lives in Ladysmith, BC. His books and articles can be found online at www.marcedge.com.

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