Dr Eric Crampton: What planet are they on?

New Zealand's newspaper chiefs' views on how the Fair Digital News Bargaining Bill works is somewhat at odds with the text of the Bill.

Google today, admirably, said they'll stop linking to New Zealand news outlets in search if the Bill goes ahead.

News Publishers' Association's Andrew Holden and Stuff's Sinead Boucher aren't happy about that. But contrast what they say with what the legislation says.

News Publishers' Association spokesperson Andrew Holden said Google had deliberately misrepresented the legislation in its blog and demonstrated “the kind of pressure that it has been applying to the Government and news media companies”.

The bill would create the environment for media companies to “sit down and have a proper commercial negotiation with ‘big tech’ companies about their use of our journalism”, he said.

The Bill creates an environment for a proper commercial negotiation? Let's look at the Bill.

Clause 21 lets news media companies apply to the Authority to have a platform registered as an operator. A designated operator must comply with the bargaining code (26), under a duty to bargain in good faith (27), and a duty to participate (31). If the negotiation period ends without agreement it moves into mediation (34, 35). It moves then to final offer arbitration if they fail to reach agreement (39), they submit final offers (45), and the arbitration panel selects its preferred final offer (49). There are matters to which the Panel must have regard (50) but there's no way of forming reasonable expectations about what that Panel might decide.

Does any of that really sound like 'proper commercial negotiation'?

If I would like to buy your house, and you do not want to sell me your house at the price I've offered, would proper commercial negotiation mean that it ends there, or that I get to drag you into arbitration where you might be forced to sell me your house at the price I've set as my final offer if the Panel thinks that that number seems fair?

Has Andrew Holden read Section 49 of the Bill or is he deliberately misrepresenting the Bill?

Let's move on.

“To make it clear, no one is asking Google, or anyone else, to pay for linking to news,” Boucher said.

Oh really?

Here's the preamble to the Bill - the explanatory notes.

The Authority may only register an operator in respect of a news media entity if, in the Authority’s opinion,—

the operator’s digital platform makes the news media entity’s news content available; and

there is a bargaining power imbalance between the operator and the news media entity that favours the operator and is more than minor or insignificant.

Let's check Clause 22:

22 Grounds for registering an operator

(1) The Authority may register an operator in respect of a registered news media entity only if, in the Authority’s opinion,—

(a) the operator’s digital platform makes news content produced by the news media entity available to people in New Zealand; and

(b) there is likely to be a bargaining power imbalance between the operator and the news media entity in respect of the terms on which the news media entity’s news content may be made available by the operator’s digital platform; and

(c) the imbalance is—

(i) more than minor or insignificant; and

(ii) in favour of the operator.

(2) When deciding whether to register an operator, the Authority may take into account the following matters:

(a) the size of, and resources available to, the operator and the news media entity:

(b) the extent to which the news media entity is reliant on the operator’s digital platform to carry on its business:

(c) the extent to which the operator is reliant on the news content produced by the news media entity to carry on its business (including the extent to which the operator can substitute content produced by the news media entity for content produced by another news media entity):

(d) an estimate of the benefits and detriments (monetary or otherwise) for the operator and the news media entity of the news media entity’s news content being made available by the operator’s digital platform:

(e) the extent to which the news media entity has been able to negotiate the terms on which its news content is made available by the operator’s digital platform, including—

(i) whether the operator has subjected the news media entity to unfair pressure or tactics or otherwise unfairly influenced the news media entity in respect of news content made available by the operator’s digital platform and, if so, the nature and extent of that conduct; and

(ii) whether, taking into account the particular characteristics of the news media entity, the news media entity is able to protect its interests in respect of the news content it produces:

(f) any other matters that the Authority considers relevant.

If the Authority views a link to a news site with a short fair-dealing snippet of what the story is about as "making news content produced by the news media entity available to people in New Zealand", the platform can be designated.

If there is no intention to capture a platform that simply provides links, it would have been easy to specify that in the legislation. Simply put in a 22(1)(a)(i) that reads something like:

(i) for clarity, linking to a news site by a search engine, or by users of a platform, with or without a short snippet describing the linked story, cannot on its own be sufficient basis for designation as an Operator.

Without that kind of restriction, I can't see how linking to a news story on its own is guaranteed to be insufficient basis for designation. It doesn't matter whether Boucher says she doesn't want to force Google to pay for links. What matters is whether the legislation precludes that as being sufficient, on its own, for designation.

Shayne Currie, over at the Herald, also doesn't seem to like Google's offer to stop stealing from them by linking to their news stories.

But his summary of the state of play in Canada is a bit jarring for those of us who've been following the state of play in Canada.

Here's Currie.

What happens in other countries?

Google has been ruled exempt from the Online News Act in Canada, after agreeing to pay an annual sum of money – $C100 million ($119m) – to be shared amongst news media companies.

The Google money will be allocated on a formula based on the journalist headcount at each company.

The money will be administered and distributed by the Canadian Journalism Collective, an organisation set up of independent publishers and broadcasters.

The collective was committed to distributing the funding in a “fair, transparent, and inclusive manner”, said CJC independent board director Sadia Zaman.

“We look forward to working with the full diversity of the Canadian news ecosystem, including traditional print and broadcast organisations, and independent local news publishers, including those who serve indigenous, black and racialised communities and francophone communities.”

It is understood Google would want a similar arrangement here, but for the minister to administer the pool of money.

Any pool of money is likely to be well short of what the media industry believes it should be paid, and even what it receives now.

Media industry representatives have previously stated Google should not be exempt.

You might have noticed a few things missing.

First, Facebook's withdrawal from news hit small news outlets kinda hard. There's no mention of that at all, but he could argue that this is just about Google's side.

But on Google's side, a lot of what they're paying to avoid designation is recycling of funds they'd already been putting into journalism development.

If you want to know what is happening in Canada on this stuff, you just have to read Michael Geist. He's the expert in it. He's the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa and has been on this file from the beginning.

Here was his summary as of 25 September.

The disaster that is Bill C-18 is by now well known. Blocked news links on Meta platforms have had no discernible impact on Facebook traffic, but it has sharply reduced referral traffic to Canadian news sites and led to the cancellation of millions of dollars in previous agreements with publishers. Meanwhile, the Google money remains in limbo as the sector awaits CRTC approval over the governance of its distribution. With prior Google agreements folded into the new $100 million contribution, some organizations will garner less than they did prior to the legislation. Moreover, as demonstrated by the recent response to a controversial tweet from Heritage Parliamentary Secretary Taleeb Noormohamed or the backlash against a CTV report that stitched together comments from Conservative leader Pierre Poilievre to create a fake clip, the government’s policies have only exacerbated public mistrust of the media with every error viewed through the lens of government funding for the media. Far from preserving an independent press, the policies have actually placed them at greater risk.

Dr Eric Crampton is Chief Economist at the New Zealand Initiative. This article was first published HERE