Summarised by Centrist
Economist Eric Crampton says Labour’s Fair Digital News Bargaining Bill, initially dismissed by National Party’s Melissa Lee as a “shakedown”, could initiate compulsory bargaining with platforms for payment.
The uncertainties of an arbitrator stepping in, if no agreement is reached, could turn the digital landscape on its head, he said.
Crampton writes that “all hell broke loose” when this framework was initiated in Canada. Facebook’s parent company Meta pulled out of the news market, and small independent publishers saw significant drops in traffic and revenue.
“It turned out that Meta hadn’t been stealing from news companies. Instead, it had been driving traffic to news sites,” he explains.
Crampton argues that the predictable outcome is that Meta will exit NZ’s news market, leaving media outlets scrambling for traffic and government subsidies to cover the shortfall.
He also points out the oddity of Australia’s government mulling over whether it ought to compel Meta to continue providing news in Australia.
“This all started from a notion that Meta was stealing news. One normally doesn’t encourage thieves to keep at it because of the benefits of the fines assessed against them,” he writes.
Crampton concludes that there’s a defensible case for public support of journalism, but this bill isn’t the solution.
Editor’s note: In his post, Crampton discloses that The NZ Initiative is funded by corporations like Google and Microsoft.
