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Ottawa should reject the Murdoch plan

The news baron’s push to force Google and Facebook to pay for ‘stealing’ newspaper articles dates back to at least 2009

Canadian PoliticsMedia

Rupert Murdoch’s victory in Australia has been seized on by publishers in other countries, including Canada, who are hoping to use it to persuade their governments to enact similar legislation which would force Big Tech companies to share some of their vast revenues. Photo by Matt Brown/Flickr.

Rupert Murdoch’s long-running campaign to force Google and Meta (formerly Facebook) to share some of their vast revenues with his newspapers in Australia, the United Kingdom, and the United States depends on one domino in between: Canada. Should our country fall to his plan, which has been eagerly adopted by the largest newspaper chains here, there is a real chance it might work in the UK. Whether such a scheme would ever fly in the US, which harbours deep distrust of government involvement in news media, is another matter indeed. Then again, if Canada and the UK fall, the game of dominoes might be won.

We don’t allow Murdoch and his New York-based News Corp. to own newspapers in Canada, of course. We’re too smart for that. That’s why we have limits on foreign ownership of the press. A guy as Machiavellian as Murdoch could easily subvert public policy here in self-serving ways, as he has done elsewhere. I mean, the guy is a literal Bond villain (Tomorrow Never Dies) whose corporate machinations were the inspiration for HBO’s hit series Succession. He was roundly blamed for instigating the 2003 invasion of Iraq through his Fox News Network and his UK dailies The Sun and The Times. He was found “unfit” to run a media company in the UK, however, after a phone hacking scandal there a decade ago. Joe Biden reportedly calls him “the most dangerous man in the world.”

Regrettably, however, our limits on foreign ownership of the press were long since circumvented thanks to former Conservative Prime Minister Stephen Harper. It was on his watch a dozen years ago that US hedge funds scooped up our largest newspaper chain, which they renamed Postmedia Network, and a few years later took over our second-largest chain, Sun Media. A New Jersey hedge fund now owns at least two-thirds of Postmedia, which at last count publishes 15 of our 22 largest dailies. It recently gobbled up the Irving chain, which owns all four dailies in New Brunswick, so I will have to revisit my calculations. Needless to say, Postmedia is all in on Murdoch’s plan.

You might ask why Postmedia has been so quiet in the debates over government bailouts for news media (we’re up to five by my count) and now the shakedown of tech firms with Bill C-18, which would compel online platforms such as Google to compensate media companies for “reusing their journalism.” Postmedia is by far the largest member of the newspaper industry association News Media Canada, but its campaigns for government money, and now Google and Meta’s money, have been fronted by Winnipeg Free Press publisher Bob Cox, who recently stepped down as head of NMC, and more recently Jamie Irving. After all, it wouldn’t look very good if Paul Godfrey or Andrew MacLeod, his successor as Postmedia CEO, were leading the push for OPM (other people’s money). We’d see through that as a self-serving cash grab, right? These hedge funds aren’t stupid.

Murdoch’s push to force Google and Meta to pay for “stealing” newspaper articles dates back to at least 2009, when he labeled the former a “content kleptomaniac” and threatened to license his company’s content to Microsoft’s rival search engine, Bing. Google, of course, is how most surfers find the news because of the superior service it provides. It provides it free to readers and publishers by posting headlines and a short snippet of stories on search results. Google doesn’t post ads on its search results. All it’s after is more and more data on what you and I are interested in to feed the algorithm of its AdSense service, which sells space on other websites to advertisers by promising to match them up with the best potential customers. Meta runs a similar business by gathering data on its members. It’s the perfection of target marketing, and newspapers can’t compete. That’s what they mean when they say they are only asking governments to “level the playing field.”

Murdoch bought the social network MySpace in 2005 for US$580 million (CAD$700 million) in an attempt to get in on the game. He briefly partnered with Google in an ad deal until MySpace was surpassed in popularity by Facebook. He has ever since used his media holdings to wage war on the digital giants. The Times conducted a months-long campaign against the platforms in 2017, noted Buzzfeed, including 18 front page stories on Facebook and Google. Then there’s his shameless Sun. As Buzzfeed noted, Murdoch is double dealing to a certain extent, since he is invested in a rival to Google’s ad-matching service called AppNexus and plans his own digital advertising network.

Murdoch’s victory down under has been seized on by publishers in other countries who are hoping to use it to persuade their government to enact similar legislation. The UK is considering that very thing right now. The campaign against Google and Meta there has been led by industry publication Press Gazette, which began its ‘Duopoly’ campaign in 2017 to stop them from what it called “destroying” journalism.

The UK government could easily dismiss the idea if it were only one far-flung former colony that enacted Murdoch’s scheme. After all, he enjoys overwhelming media influence in Australia, owning 15 of the country’s 21 metropolitan daily and Sunday newspapers and he basically installed the ruling coalition government. Google and Facebook hardly stood a chance, although the latter refused to carry links to news stories from that country for a day until changes were made to the bill. While great secrecy surrounds the Australian digital payments, as it would in Canada, it has been reported that News Corp Australia is receiving at least A$70 million (CAD$64 million) a year from Google and Meta.

Not all Aussies are happy about Murdoch’s strong-arm tactics, however. Former Prime Minister Kevin Rudd launched a petition recently demanding a royal commission into his media influence, calling Murdoch “an arrogant cancer on our democracy.” It soon gained more than a half million signatures and the support of fellow former Prime Minister Malcolm Turnbull.

But if another former colony not quite as far-flung—Canada—went along with the scheme, it might be hard for the UK to resist. Murdoch may have over-played his hand in Britain, however. He applied last year to merge his Times and Sunday Times, which he promised not to do on buying them from the Thomson family of Toronto more than 40 years ago. His company News UK claimed the pandemic had wreaked havoc on their copy sales, making no mention of their soaring digital subscriptions and advertising. After the application was granted in February, Times Newspapers Limited filed its required 2020-21 annual report, which showed that its profits had doubled for the second consecutive year to £52.5 million (CAD$82.5 million) and its profit margin had increased to 16 percent.

Now that takes some cojones. It’s a tale I tell in my forthcoming book for Routledge Research titled Re-examining the UK newspaper Industry. I am also sharing my findings with the Digital, Culture, Media & Sport ministry’s ongoing inquiry into the sustainability of local journalism. It’s quite a different story from the one we hear in this country.

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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