Canadian Publishing Group Says France Has The Right Idea, Presses For Its Own Google Tax

from the dividing-by-almost-zero dept

Canada is more than just a calmer, more apologetic version of the United States. It's its own thing. But, more accurately, it's a Britain + France thing. While Canada shares a common border with us, it's still more Europe than US of A.

Every so often we're reminded of its ties with the other side of the pond. This is one of those times.

French regulators recently decided Google owed French news sites for all the traffic it sends to them. It mandated "negotiations" between Google and French newspapers, but insisted the negotiations begin with Google getting out its wallet.

It appears Canadian lobbyists agree with France: Google owes them money.

A Canadian news industry advocacy group says that Canada would do well to follow France’s example in forcing internet search giant Google Inc. to pay news publishers for their content.

I guess this depends on how you define "do well." This could backfire severely, resulting in no new revenue streams and fewer site visitors. Just ask Spain. That's not "doing well." If this means the group thinks it's advisable to follow France's example, it's also wrong. But that's the direction journalists are being steered by their advocates.

News Media Canada chief executive John Hinds said Thursday that the federal government will need to take a leadership role if the power dynamic between Google and publishers is to be changed.

This isn't the first time Canadian journalists have demanded tech companies pay them for the traffic they send them. Three years ago, a Google tax was pitched to the Canadian government -- one that included Facebook and Netflix in a proposal to tax companies who helped bring Canadian content to site users around the world.

Things are tough all over, thanks to a radical shift in, well… everything… since the beginning of the coronavirus pandemic. Hinds somehow believes an advertising giant will provide for everyone during a time when everyone's advertising revenues are down.

Hinds said the collapse of advertising rates in the face of the COVID-10 global pandemic, at a time when people are reading news sites at higher rates than ever, highlights the problem.

“I think it’s a fundamental thing: We need to be paid for our content. We need to be compensated,” Hinds said.

Fair enough. Let your readers do that. If they're not interested, it's really not up to a bunch of other companies located elsewhere in the world to make up the perceived difference. Everything sucks everywhere at the moment. Wringing a few bucks out of Google isn't going to reverse anyone's fortunes. And the more newspapers that convince governments Google should pay for sending them traffic, the less they'll all be making individually.

A Google tax isn't a revenue stream. It's not even a trickle. Here's Nate Hoffelder's estimate of how Google's "billions" in profit would actually pay out for rent-seeking newspapers:

Google is making under 4 cents per search, and turning a profit of around a half a cent per search.

Of course, that is an average across all of Google's search results, and it includes search terms and even whole verticals which are not monetized (Google News, for example). And that is also a global average and not based on EU revenues, so it is not 100% applicable. (And those calculations are based on a bunch of unsupported assumptions.)

Leaving those caveats aside, the point that matters is that news publishers want Google to pay for the use of their links and snippets. This means that Google would need to take that 3.7 cents and divide it between all of the relevant links returned with each click of the search button (after taking a cut for itself).]

Efforts like this are counterproductive. They're unlikely to reverse the fortunes of failing news concerns and far more likely to convince US tech companies to avoid providing specific services for certain countries. If Canadian publishers want what France has, they're only going to end up splitting the disappointment.

Filed Under: aggregators, canada, france, google news, google tax, john hinds, news aggregators, news publishers, snippets, traffic
Companies: news media canada

EU Commission Hid Yet Another Report That Showed Its Assumptions About Copyright Were Wrong

from the evidence-based-policymaking dept

For many years we've criticized copyright policymakers who rely on "faith-based" policymaking. That is, they believe that copyright is inherently "good" and refuse to consider any evidence showing harms from copyright that is too strong, or refuse to concede that there may be better ways to create incentives or to remunerate creators beyond copyright. The idea of actually having evidence-based copyright has long seemed like a pipedream -- and apparently the EU Commission would like to keep it that way. Back in September, we wrote about how the EU Commission spent $400,000 on a study that showed unauthorized downloads had little impact on sales -- and then refused to release the report, recognizing that it would undermine the narrative they were pushing in trying to expand anti-piracy laws.

And, now, another such "buried" report has been discovered. As with the last one, this new report was discovered by Pirate Party EU Parliament Member Julia Reda, though she used the standard EU Freedom of Information process that anyone else could have used. After discovering that last report, she made a request for all copyright related studies that the EU Commission had requested since 2013, even if they were unpublished. That initial request listed out some papers that were still in progress -- including the one that Reda has now released. This study is one that a lot of news publishers almost certainly wished would have never seen the light of day -- which might explain why the EU Commission kept it buried.

The report focuses on the question of news aggregators and what impact they're having on news publishers. As you may recall, publishers around the globe -- but especially in Europe -- have been insisting that aggregators like Google News are somehow responsible for their own business failures, and are demanding that Google pay them for the awful crime of sending them traffic. The fact that these publishers could easily block Google from sending them traffic -- but refuse to do so -- reveals that they really do find that traffic valuable. But they still want payments on top of it, and will continue to demonize Google News and other aggregators until they get it. And, indeed, the EU Commission continues to suggest that forcing aggregators to pay publishers would be a good idea.

But, perhaps not surprisingly, the study that the Commission requested shows the exact opposite of what the publishers claim. Looking at situations in Spain and Germany -- both countries that tried to force Google to pay -- gives some real world evidence that is inconvenient for publishers and those pushing for these kinds of laws:

The available empirical evidence shows that news aggregators have a positive impact on news publishers' advertising revenue.

The research goes through a number of different empirical studies to conclude this. It notes that there are two competing forces, and the empirical question is which force wins out. News publishers insist that aggregators work as a substitute for their sites, while aggregators (and others!) insist that they're complementary, and that news aggregators drive more traffic, which the publishers can then monetize. It then cites a whole bunch of studies presenting empirical evidence that the complementary effects far outweigh the substitution effects. As the paper concludes:

We can conclude from this overview that the studies published so far contain no empirical evidence in support of the substitution hypothesis and thus no evidence that online aggregators have a negative impact on original newspaper publishers' revenue. On the contrary, the evidence shows that aggregators may actually be complements to newspaper websites and may help consumer discover more news and boost the number of visits.

All of this seems like, damn, it would be kind of useful if you were trying to create good copyright policy. But instead the report was completely buried and hidden, while the EU Commission to this day continues to push for policies that insist the substitution effect is stronger than the complementary effect. Even though the evidence that the very same Commission asked for shows that's untrue.

So, once again, it's feeling like evidence-based copyright remains a pipedream. What's unfortunate, though, is that in the past we felt it was a pipedream because no one was willing to do the research. Now it appears it's a pipedream because policymakers, when shown the evidence, will do everything possible to hide it, rather than to use it to create more effective and reasonable copyright laws.

Filed Under: aggregators, copyright, eu commission, google tax, julia reda, link tax, news, news aggregators, snippet tax