We need stronger anti-monopoly laws if we want to curb corporate influence in the news

Canada is no stranger to dynastic ownership of its media companies

July 1, 2021

6-minute read

As a voice of dissent and check on power in our society, a free and open press is a pillar of our democracy. But what use is that freedom and openness if our press is dominated by a handful of wealthy interests? A concentrated press market with few players means powerful actors, be they owners, corporations or politicians, are able to quash the information Canadians need to hold to account the people and institutions that govern them. 

An example of this power in action is the Irving Oil environmental controversy in 2015. Reuters published an article about mechanical problems at the Irving marine terminal in Saint John. These problems caused the terminal to leak dangerous and carcinogenic compounds into the air. The local newspapers, owned by Irving, never reported on the issue, though they did run an article about one environmentalist’s complaint to the government about it. Reuters published a second article detailing how the Irving refinery had been spewing ash-like pollutants that exceeded the refinery’s operating permit for the past six years. Local Irving-owned media were again silent on the issue. 

Canada is no stranger to dynastic ownership of its media companies. Thomson, Atkinson, Black, Irving: each family name is synonymous with the control of major press operations, either nationally or regionally. Governments have been aware of this issue for decades, but they’ve done little to address it. 

In 1970, the Senate tabled a special report acknowledging that Canada “should no longer tolerate a situation where the public interest in so vital a field as information [is] dependent on the greed or goodwill of an extremely privileged group of businessmen.” The Senate also found that “control of the media is passing into fewer and fewer hands,” with media barons controlling more of the print media landscape. As a solution, the senate proposed a Press Ownership Review Board that would screen mergers between newspaper companies to prevent corporate interests from taking full control over Canada’s print media. Unfortunately, this vision was never realized. 

Then, in 1981, the federal government appointed a royal commission to examine the newspaper sector on the heels of numerous paper closings in Montreal, Quebec City, Winnipeg and Ottawa. The commission found that: “Concentration engulfs Canadian daily newspaper publishing. Three chains control nine-tenths of French-language daily newspaper circulation, while three other chains control two-thirds of English-language circulation.” 

The commission concluded that these media conglomerates produced poor newspapers. They tended to spend less on editorial content than smaller print news services. There was also a growing public perception that the quality of political coverage was in decline and that diverse interests were not represented. The commission took aim at cross-ownership too, where paper owners also held major interests in other sectors (like Irving Oil), suggesting a conflict of interest between the interests of wealthy owners and fair reporting. 

In response to the crisis it saw in the media landscape, the commission proposed laws to limit newspaper ownership and strict restrictions on mergers to prevent further consolidation. However, like the Senate’s review in the 1970s, none of these recommendations were pursued—to the relief of the newspaper owners, who had vigorously opposed the commission’s recommendations. 

While further consolidation has been sold as the only way out of this spiral, Canadian press markets remain in freefall.

In the years following the commission’s work, Canada’s newspaper environment has become even more concentrated as chains continue to acquire and shut down papers. This steady acquisitive march only accelerated as alternatives to newspapers for advertising began to emerge in digital markets and ad dollars began to migrate. Even before the dramatic rise and subsequent domination of digital advertising by Google and Facebook, the supply of advertising space had exploded, leading to a collapse in advertising revenue following the 2008 financial crisis. With the bottom falling out, local news outlets were shuttered or swapped between national and regional players at increasing speed as newspapers fought over pieces of what appeared to be a shrinking pie.

While further consolidation has been sold as the only way out of this spiral, Canadian press markets remain in freefall. Today, Canadians have less access to local news than ever before, and the days of all but a few select publications remain numbered. With each purchase, newspaper consolidation means another independent voice is subsumed by the broader corporate interests of Canada’s increasingly dominant players.

And, as in the past, government action has been wholly ineffective at preventing this consolidation. The Competition Bureau, Canada’s antitrust authority, has the ability to stop the ongoing consolidation of Canada’s newspaper environment—in principle. It is responsible for reviewing deals like the acquisition of papers by newspaper chains. But despite its authority, it has yet to take meaningful action.

In 2014 the bureau reviewed Postmedia’s acquisition of at least eight English-language newspapers from Quebecor Media. The bureau rationalized that the papers Postmedia would acquire were sufficiently different in terms of readership and content that they were not in direct competition with each other. So, even though the deal led to Postmedia owning all the major newspapers in Calgary, Edmonton, Vancouver and Ottawa, the bureau found that the transaction was “unlikely to result in a substantial lessening or prevention of competition.”

This year, the bureau also closed its investigation into an alleged conspiracy between Postmedia and Torstar involving the swap of 41 newspapers and subsequent closure of 36 of those papers. Although the bureau raided the offices of Postmedia and Torstar and examined six current and former Torstar employees under oath, it was still somehow unable to find sufficient evidence that Torstar and Postmedia engaged in a conspiracy to divide the newspaper market.

Canada’s competition law is tolerant of monopolies and largely stands by as they pose an increasing threat to our democracy.

Why has the bureau has been so ineffective in curbing the growing dominance of Canada’s newspaper chains? The answer lies in our weak laws. Our antitrust legislation epitomizes neoliberal blind faith in the power of free markets and their inherent ability to self-correct through competitive forces. Canada’s competition law is tolerant of monopolies and largely stands by as they pose an increasing threat to our democracy.

Beyond antitrust law, recent policy efforts have aimed to address the lack of diversity in Canada’s news landscape. On first blush, the federal government’s $50- million local journalism initiative provides hope that local news creators could get the support they need to enhance the diversity of news coverage. However, critics have pointed out that a sizable chunk of this funding has been given to Postmedia papers.

The program also restricts funding to news outlets that have been operating for at least a year. As a coordinator of the program admitted, part of the rationale behind these restrictions is to prevent more competition in “already struggling markets”—like those where dominant media companies have been shuttering newspapers. While well-intentioned, this solution is focused squarely on preserving a dying status quo rather than looking to the future.

We should applaud Australians for exercising their sovereignty against these companies, dispelling the myth that this can only be done by superpowers and unified blocs. But we should also understand the limitations of this approach.

Looking beyond Canada, Australia has also moved to reinvigorate its news landscape. In early 2021, it released legislation that created a mandatory bargaining code between digital giants and Australian news organizations. The purpose of the code is to tip the scales in favour of news organizations in their advertising negotiations with companies like Google and Facebook. Initial opposition to the code was fierce, with Google threatening to pull out of the country entirely, but the major players eventually capitulated and entered negotiation. We should applaud Australians for exercising their sovereignty against these companies, dispelling the myth that this can only be done by superpowers and unified blocs. But we should also understand the limitations of this approach.

Australia is home to one of the most concentrated news markets on the planet, rivalled only by China and Egypt. Instead of addressing this core issue, Australia is only allowing domestic media titans to carve a larger chunk of digital advertising revenue out of digital giants. While the code may strengthen the balance sheet of Australian media conglomerates, it will do nothing to promote diversity and dissenting voices for Australians. The Australian solution is firmly grounded in preserving the status quo, despite its existing issues.

If Canadians want to preserve our own status quo, then we are firmly on track. But if we want to release Canada’s news system from the undue influence of powerful interests, we must pursue two parallel solutions.

First, Canada must find ways to bring original news organizations with new models into the fold. In both Canada and Australia, current solutions focus more on shoring up the balance sheets of press monopolists instead of creating new organizations. However, with a dynamic news market, new organizations could rise up to challenge the dominance of entrenched players and foster diversity in our media landscape. While Canada is beginning to see media companies such as Canadaland, The Sprawl and The Hoser pursue alternative operating models, these are rare points of light in an otherwise shrinking landscape.

Second, Canadians must fundamentally rethink the laws that have led to our current monopolization crisis. The path forward for news must be fundamentally different than the one taken to date, and an anti-monopoly vision of that path is the most promising one. Canada must adopt a clear anti-monopoly approach to regulating business, including newspaper chains. This new approach must recognize the value of a diversity of voices and challenge the logic of consolidation, breaking the cycle of acquisition that robs communities of independent journalism.

Monopoly in any market is a threat to democracy, and nowhere is this threat more acute than in our vital news markets.

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