Sour grapes in Alemany Farmers' Market by SMcGarnigle, CC BY 2.0 , via Wikimedia Commons

Sour grapes in Alemany Farmers' Market by SMcGarnigle, CC BY 2.0 , via Wikimedia Commons

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Sour Grapes: Big Media Lobby Wants to Squash the New Collective Responsible For Administering Google’s $100 Million Online News Act Money

Late last month, I wrote about the behind-the-scenes battle over the selection of a collective to administer and allocate Google’s annual $100 million to news outlets as part of its Bill C-18 deal with the government. I reported that there were two proposals: the Online News Media Collective, a big media consortium led by News Media Canada (NMC), the Canadian Association of Broadcasters (CAB), and the CBC, which was pitted against the Canadian Journalism Collective, a proposal spearheaded by a group of independent and digital publishers and broadcasters that promised a more transparent and equitable governance approach. To the surprise of many, last week Google selected the Canadian Journalism Collective.

The importance of who administers the collective is open to some debate since all eligible news outlets get their fair share regardless of which collective is responsible for allocating the money. However, concerns emerged that the big media collective envisioned a governance structure almost completely controlled by its own members, largely shutting out independent outlets and digital publishers and broadcasters. That governance control opened the door to implementing Bill C-18 in a manner that would benefit big media over the independents.

Yesterday members of the big media collective responded to Google’s choice with a request to the CRTC that can only be described as sour grapes. Clearly angered by the decision, they asked the CRTC to limit the collective’s maximum budget such that it would be rendered almost inoperable and to further constrain the new collective by asserting greater CRTC oversight over its activities. For example, the $100 million was always subject to first deducting the administrative costs associated with running the collective that would negotiate specifics with Google as well as administer allocation of the funds. Those costs were expected to be approximately 5% of the money or $5 million dollars, which would still be on the low side of typical collective management fees. Yet the big media lobby is now asking the CRTC to cap costs at 1/10th of that number: 0.5% or $500,000, which is simply not a credible budget for running a collective.

The demands for increased CRTC oversight mechanisms are notable as well. Collectives rarely want greater oversight from a regulator, relying instead on their own governance safeguards. There are exceptions, but so long as the collective governance structure is broadly representative, there is a built-in self-interest in acting fairly and efficiently since unnecessary expenditures effectively come out of the stakeholders’ own pockets. Yet the big media lobby wants the CRTC to go beyond Bill C-18 to establish rules constraining decision making, establishing penalties, and even requiring reporting any expenditures above $5,000 directly to the Commission. The message is clear: even though big media representatives will have a place in the governance structure, it does not trust the new collective and wants to limit its operations.

There is little doubt that no such request would have been made had Google selected the Online News Media Collective. Indeed, it would have opposed any effort to limit its decision making or operations. This CRTC request – which the Commission should reject – is the latest in a series of bumbling miscalculations by big media groups. The biggest was obviously Bill C-18 itself, with the companies convincing themselves that Meta and Google were bluffing when they indicated that if forced to pay for news links, they would remove news from their services by blocking news links. News links have been blocked on Meta services for nearly a year, causing enormous harm to many Canadian news outlets. Further, when it became clear Google might also walk away from news, the industry scrambled to urge the government to salvage the legislation with a deal that tossed aside many of the foundational elements of the law. The latest miscalculation was that competitive bids for the collective to manage the $100 million were not serious and that independent and digital media could be largely sidelined from the governance process. With that now proven wrong, the big media outlets will get their portion of the Google money with a large side serving of sour grapes. 

6 Comments

  1. It seems Google gave the finger to all the large news organizations that lobbied for C18. Well done Google.

    • Absolutely. Google actually needed to give the large media companies the middle finger on this one. Having the large media companies decide how much money they get out of that $100 million is just plain silly. I would fully expect them to pull off some insane shenanigans like telling all the independent organizations that they are not eligible because they are not a “real” news organization while mysteriously letting the large publishers to get almost all of it.

      By letting an independent organization do this, you prevent that kind of corruption and ensure there is at least a sense of fairness in this wildly bizarre set of circumstances.

      In this instance, Google definitely did the whole sector a service by doing this. The fact that the large media organizations are throwing a hissy fit over it, at this stage, is yet another sign the right call was made.

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