Amidst the global wave of countries looking at Big Tech revenues and how they relate to the growing news media crisis, many are asking whether and how tech companies should  compensate publishers for the journalism that circulates on their platforms. This has become another flash point in Brazil’s heated agenda regarding platform regulation.

Draft proposals setting a “remuneration obligation” for digital platforms started to pop up in the Brazilian congress after Australia adopted its own News Media Bargaining Code. The issue gained steam when the rapporteur of PL 2630 (the so-called “Fake News bill”), Orlando Silva, presented a new draft in early 2022, including a press remuneration provision. Subsequent negotiations  moved this remuneration proposal to a different draft bill, PL 2370. The remuneration rules are similar to the current version of another draft proposal in Brazil’s Chamber of Deputies (PL 1354).

While the main disputed issues revolve around who should get paid, for what, and how remuneration is measured, there is a baseline implicit question that deserves further analysis: What are the ultimate goals of making digital platforms pay for journalistic content? Responses from those supporting the proposal include redressing Big Tech's unfair exploitation of their relationship with publishers, fixing power asymmetries in the online news distribution market, and preserving public interest journalism as an essential piece of democratic societies.

These are all important priorities. But if what we want in the end is to ensure a vibrant, plural, diverse and democratic arena for publishing and discussing news and the world, there are  fundamental tenets that should guide how we frame and pursue this goal.

These tenets are:

- We want people to widely read, share, comment, and debate news. We also want people to be able to access the documents and information underlying reporting to better reflect on them. We want plural and diverse sources of information to thrive. Access to information and free expression are human and fundamental rights that measures seeking to strengthen journalism must champion, not jeopardize. They are rights intrinsically related to upholding journalism as a key element of democratic societies.

- We want to fortify journalism and a free and diverse media. The overreliance of news outlets on Big Tech is a reality we must change, rather than reinforcing it. Proper responses should aim at building alternatives to the centralized intermediary role that few dominant digital platforms play in how information and revenues are distributed. Solutions that entrench this role and further consolidate publishers’ dependency on Big Tech are not fit for purpose. 

But before we discuss solutions that policymakers should embrace, let’s delve a little more into the underlying problems we should tackle.

An Account of Ad-Tech Industry’s Disruption of Journalism Sustainability

We have already written a good chunk on how Big Tech has disrupted the media's traditional business model.

While the ad-tech turmoil on how news businesses used to work back in the day affects journalism as a public interest good, even back in the day, the presence of thriving news players didn’t necessarily mean a plural and diverse media environment. Brazil is sadly, and historically, a compelling example of that. Adopting appropriate structural measures to tackle market concentration would probably have led to a different story. Even if an independent, diverse, and public interest journalism landscape doesn’t automatically follow from a robust news market, fixing asymmetries and distortions in such market do play a critical role in enabling a stronger journalism landscape.

When it comes to the relations between digital platforms and publishers, tech’s intermediation of the distribution of news content poses a series of issues. It starts with platforms' incentives to keep people on their sites rather than clicking through the actual content, and goes beyond. Here we highlight some of them:

  • Draining media advertising funds to digital platforms – Tech intermediaries pocket a huge portion of the money that advertisers pay for displaying ads online. It’s not only that digital platforms like Instagram and Google Search compete with news outlets making “ad spots” up for grabs. Even when the advertiser displays its ad on a news publisher website, much of the money paid stays with intermediaries along the way. In the UK, a study of the British advertisers’ association ISBA showed that only half of the ad money spent ultimately reached the news publishers. If in the analog era the main intermediary acting to place ads in media outlets was an advertising agency, nowadays there is an intricate ad-tech chain by which different players also get their bite. 
  • Complexity and opacity of the ad-tech ecosystem – How much do intermediaries get and how does the ecosystem operate are not simple questions to answer. The ad-tech ecosystem is both complex and opaque. The ISBA’s study itself stressed the hurdles of finding consistent and standardized data about its inner workings and the flow of advertising money across the intermediaries’ chain. Yet, one critical aspect of this ecosystem has already stood out – the reigning position that Google and Meta enjoy in the ad-tech stack. 
  • Ad-tech stack duopoly and market abuse – As we spelled out here, the ad-tech stack operates through real-time auctions that offer available online spaces for ad display combined with users’ profiling in a run-up for our attention. This stack includes: a “supply-side platform” (SSP), which acts as the publisher’s broker offering ad spots (usually called “ad inventory”) and related user eyeballs; a “demand-side platform” (DSP), which represents the advertisers and help them manage the purchasing of ad slots and find the “most effective” impression for their ads considering user data; and a marketplace for ad spots where supply and demand meet. As we noted, there are many companies that offer one or two of these services, but Google and Meta offer all three. Plus, they also compete with publishers by selling ad slots on YouTube or Facebook and Instagram, respectively. Google and Meta represent both buyers and sellers on a marketplace they control, collecting fees at each step of the way and rigging the bidding to their own benefit. They faced investigations of illegal collusion to rig the market in their favor by protecting Google’s dominance in exchange for preferential treatment for Meta. Although authorities decided not to pursue this specific case, other antitrust investigations and actions against their abusive conducts in the ad-tech market are in progress.
  • Making journalism dependent on surveillance advertising – Trading audience attention is not new in how the news market operates. But an integrated and unrelenting system of user tracking, profiling and targeting did come about in our digital era with the rise of Big Tech’s main way of doing business. A whole behavioral advertising industry has developed grounded in the promises and perils of delivering more value based on dragnet surveillance of our traits, relations, moves, and inferred interests. Big Tech companies rule this territory and shape it in such a way as to hold publishers hostages to their gimmicks. Making journalism reliant on surveillance advertising is a deal that serves to entrench few tech players as must-needed ad gatekeepers since this is not a trivial structure to build and maintain. This structure is also directly abusive to users, who are continuously tracked and profiled, feeding a vicious cycle. We shouldn't need pervasive, behavioral surveillance for journalism to thrive.

All these problems relate to Big Tech's unfair exploitation of their relationship with news organizations. But none of them are copyright issues. Copyright is a poor framework for addressing concerns about journalism sustainability. The copyright approach to the fight between tech and news relies on the assumption that journalists and media outlets, as copyright holders, are empowered to license (and thus control and block) quotation and discussion of the news of the day. That logic threatens the first fundamental tenet we presented above as it would undermine both the free discussion of important reporting and reporting itself. Copyright proposals also purport to create a remuneration dynamic that tracks and measures the “use” of journalistic content of each copyright holder so that each one can receive the corresponding compensation. Even when not explicitly attached to copyright law, proposals of journalistic remuneration based on the “use” of news content pose many challenges. Australia’s compensation arrangements are a mixed bag with several issues deriving from this and other problems we outline below.

Why Brazil Shouldn’t Follow Australia’s Code or Any “Content Use-Based” Models

Australia’s News Media Bargaining Code is a declared inspiration for Brazil’s debate over a remuneration right for publishers, endorsed by Big Media players and decision makers. As per the Code’s model, private remuneration agreements between news businesses and digital platforms result from these platforms making news content available on their services. The law details what “making content available” means, the conditions the Treasurer must follow to designate digital platforms that are bound by the law, the requirements news businesses must meet to benefit from the bargaining rules, the obligations that designated digital platforms have in relation to registered news businesses, and mechanisms for mediation and arbitration in case both parties fail to reach an agreement. 

Although Google and Meta have closed more than 30 agreements during the law’s first year in force, none of them is actually under the Code’s purview. The two tech giants’ strategic moves regarding the new law avoided any formal designations of digital platforms as per the Code’s rules (as James Meese notes in “The Decibel” podcast).

So far, the Code has served as a bargaining tool for media players to reach agreements with Google and Meta outside the law’s guarantees. Both due to the Code’s language and the unfolding bargaining practice, the Australian model brings a set of lessons we shouldn’t overlook. Professor Diana Bossio’s analysis points out some of them:

First, the lack of transparency in the agreements has deepened imbalances among media players competing for market share in an already concentrated ecosystem. Smaller, independent organizations unaware of higher sums secured by major outlets have struck deals for very modest amounts and lost key professionals to larger groups that used the new funding source to pay salaries above the usual market rate. Second, the tech platforms used agreements to bolster their own news products, such as “Google News Showcase,” according to their content and business priorities. Third, Google and Meta are the ones ultimately determining what is and which media outlets produce public interest journalism that gets to be paid. As a result, they are actually the ones deciding the “winners and losers of the Australian media industry.” In sum, Bossio states that

Lack of transparency and designation means the tech platforms have been able to act in the best interests of their own business priorities, rather than in the interest of the code’s stated aim of supporting public-interest journalism.

Canada’s Online News Act sought to address some of the pitfalls of the Australian model but has been struggling with securing its enforcement. Both Google and Meta have said the law is unworkable for their businesses, and Meta has decided to block news content for everyone accessing Facebook and Instagram in Canada. The company argues that people don’t come to Meta’s platforms for news, and that the only way it “can reasonably comply with this legislation is to end news availability for people in Canada.”

By ceasing to make news available on its platforms, Meta dodges Canada’s remuneration obligation. This is one of the traps of basing a remuneration arrangement on the “use” of journalistic content by online platforms, as the current draft of PL 2370 in Brazil does. Digital platforms can simply filter news out. If lawmakers respond by compelling them to carry news content in order to avoid such blocking, they fall yet in another trap – that of undermining platforms’ ability to remove harmful or otherwise problematic content under their terms of service. But the traps don’t end there. The “use” of journalistic content as the basis for remuneration is also bad because:

  • It encourages "clickbait" content.
  • It ends up favoring dominant or sensationalist media players.
  • It fosters and deepens structures for monitoring user sharing of links and content, which poses both data privacy and tech market concentration concerns.
  • It faces clear hurdles in circumscribing what “use” is, measuring such “use” in relation to each news organization, and supervising whether the remuneration is compatible with the amount of content “used.”

What should we do, then?

Which Alternatives Can Pave the Proper Way Forward

Let’s recall our fundamental tenets for achieving the end goal of ensuring a vibrant, plural, diverse, and democratic arena for publishing and discussing news and the world we live in. First, measures aimed at strengthening journalism shouldn’t serve to curb the circulation and discussion of news. Access to information and free expression are human and fundamental rights that these measures must champion, not endanger. Second, fortifying a free, independent, and diverse press entails the creation of alternatives to overcome news outlets’ dependency on Big Tech, instead of reinforcing it.

While PL 2370 and PL 1354 are important vectors for going a step further towards journalism sustainability in Brazil, their current language still fails to properly meet such concerns.

The draft bills follow the model of private agreements between digital platforms and news companies based on the “use” of journalistic content. Setting the kind of “use” that triggers remuneration vis-à-vis reasonable use exceptions has been complex and debated. The fear that this approach ends up favoring only the big players or that the money doesn’t get to the journalists actually doing the work has also driven discussions. Worryingly, there are no transparency requirements in the drafts for such remuneration deals. The bills don’t look at the market distortions we presented earlier. Relatedly, they don’t explore alternative approaches to Big Tech’s central intermediation role in how information and revenues are distributed. In fact, they may serve to cement the current dependency course.

By combining structural market measures and a policy decision to strengthen journalism, Brazilian decision makers, including Congress, should instead:

  • Establish restrictions for companies to operate in two or more parts of the ad-tech stack. Big Tech firms would have to choose if they want to represent the “demand-side”, the “supply side” or offer the “marketplace” where both meet. A draft law in the U.S. aims precisely to bridle such abusive situation and can inspire the Brazilian draft legislation. 
  • Ramp up the transparency of the ad-tech ecosystem and the flow of ad spending. For example, by requiring ad-tech platforms to disclose the underlying criteria (including figures) used to calculate ad revenues and viewership, backstopped by independent auditors.
  • Adopt further measures that can reduce Big Tech’s dominant role as intermediaries of publishers’ revenues coming from ads or subscribers. For example, to allow smaller players to participate in real-time bidding, incentivize more competitive solutions in such ecosystem, and open up the market of app stores. Currently, Google or Apple pocket 30 percent of every in-app subscription or micropayment dollar. As we noted, the EU and the U.S. are taking measures to change that. 
  • Build on Brazil's data protection legal framework  to stop surveillance advertising and return to contextual ads, which are based on the context in which it appears: what article it appears alongside of, or which publication. Rather than following users around to target them with ads, contextual advertisers seek out content that is relevant to their messages, and place ads alongside that content. This would dismiss the data advantage enjoyed by Big Tech companies in the ad ecosystem.

The measures above could likely be enough to rebalance the power asymmetries between digital platforms and news outlets, especially regarding larger media players. However, Brazil’s background indicates that this alone may fail to advance an independent, diverse, and public interest journalism landscape. The proper policy decision to pursue this goal is not to foster private and non-transparent agreements based on how much platforms or people “use” news.There are better approaches, such as establishing public subsidies for advancing journalism sustainability. The policy goal of strengthening journalism as a decisive element of democratic societies translates into a policy decision to financially support its flourishment. In addition to promoting structural market measures, the government should direct resources towards this goal. Considering the many funding priorities and budget constraints, a viable and sound path is using the collection of ad-tech players' taxation to create a fund managed by an independent, multistakeholder committee. The committee and the funding allocation would abide by strict transparency rules, representativeness criteria, and oversight.

With that, the discussion over who gets paid, for what, and which other initiatives are important to fund to pave a way of less dependency between news organizations and Big Tech could go way beyond bargaining agreements and have this fund as a catalyst based on guidelines set by law. This could also free the remuneration model from the problematic aspiration of tracking the "use" of news content and dispensing payments accordingly.

The idea of creating a fund is not new in Brazilian debates about journalism sustainability. Following global discussions, the Brazilian National Federation of Journalists (FENAJ) has been advocating for a fund considering the model of Brazil’s Audiovisual Sector Fund (FSA), which is part of a consistent policy fostering the audiovisual sector in the country. The idea gained support from Brazil's Digital Journalism Association (AJOR) and other civil society organizations. Brazilian decision makers should look at FSA’s experience to build a sounder path, putting in place, of course, the necessary checks and balances to prevent risks of capture and undue interference. As noted above, the collection of resources should rely on a relevant portion of revenue-related taxation of ad-tech players rather than the use of journalistic content. Moreover, transparency, public oversight, and democratic criteria to allocate the money are among the essential commitments to be set to ensure a participative, multistakeholder, and independent journalism fund.

We hope the crucial issues and alternatives outlined here can help to build a stronger way forward in Brazil’s take of upholding journalism before the dominant role of Big Tech companies.