Why Canada’s Attempt to Save Journalism May End Up Crushing It Instead
Reading Time: 7 minutesFacebook Just Backed Canada Into a Corner, Facebook ending news sharing in Canada: Why an attempt to save journalism will make things worse.
On June 22, the Canadian Parliament passed Bill C-18, also known as the Online News Act. The new law, according to a government news release, ‘will require the largest digital platforms’—in effect, calling out Facebook, Instagram, and Google without naming them—’to bargain fairly with Canadian news businesses for the use of their news content.’ The intent here is to even out the skewed market imbalance between Canadian journalism and Big Tech platforms, many of which have offered distribution pathways and occasional payment agreements to digital news sites while also sapping them of revenue from native advertising—a sector dominated by those very corporations.
The logic behind the law goes like this: At first glance, when Facebook or Google displays a news article, whether on a specialized feed or a search-results index, that seems good for the news outlet; the platforms are helping it get information to more eyeballs. But it’s valuable for the website only if a user then clicks on the article and navigates the page in question, which hosts the ads the outlet was paid to feature. If users don’t click—and most users don’t—Google and Facebook get to keep the users’ eyeballs, and the advertising revenue that comes from that engagement. Over time, because they’ve come to rely on Facebook or Google for their news, users become less likely to navigate a media publisher’s site organically.
By requiring digital platforms to compensate news publishers when posting and sharing their links, the Online News Act (in theory) tries to make this dynamic more beneficial for newsrooms. But that depends on the bigger platforms’ willingness to cede any bit of their power. The law is modeled after similar legislation passed in Australia in 2021, and has invited parallel waves of excitement (from continental news organizations and bigger media outlets) and backlash (from trade associations, independent publications, and Big Tech itself). In the months leading up to Bill C-18’s passage, Meta and Google threatened to revoke news access from Canadian users altogether, and they experimented with cutting off displays and shares of media links for small portions of the population, leading Parliament to summon Google executives for questioning. (Earlier this month, Prime Minister Justin Trudeau ruled out any legislative compromises and accused the two companies of employing ‘bullying tactics.’) Now that the bill is law, Canada’s Heritage Department will take charge of publishing specific regulations and offering guidance on implementation over the next few months; by the end of that period, the bill should be in full effect.
So far, Canada’s Big Tech confrontation seems to be mirroring Australia’s; Google is upset but has been quiet about its next steps, while Meta has aggressively moved to block Canadian Facebook and Instagram users from seeing and sharing news links. [Update, June 29, 2023, at 1:51 p.m.: On Thursday, Google officially announced that it will block news links on Search, News, and Discover to Canadian users in response to the Online News Act.] No negotiations, no relief: ‘We are proceeding toward ending the availability of news permanently in Canada,’ Rachel Curran, a Meta executive and former politician, told the Canadian Broadcasting Corporation on Tuesday. ‘Our trajectory is set. There is no way to negotiate out of the framework of this bill.’
But the Canadian government may think there is more room for negotiation, considering that Facebook ended up striking a murky deal with Australia in 2021 following outrage over its initial news blockage—which had the side effect of scrubbing pages belonging to essential weather and emergency services, and affecting the social media presence of unions, government agencies, and sporting organizations. Still, despite Heritage Minister Pablo Rodriguez’s assurance that Meta will suffer ‘reputational impact‘ and that his government has ‘options’ to aid outlets that stand to lose Facebook traffic, there’s reason to take the platform’s ‘permanent’ threat seriously—especially given the devastating impact the law could have on Canada’s crumbling media sector.
For one, said Michael Geist, a University of Ottawa professor who researches internet and e-commerce law, the circumstances that pushed Facebook to iron out agreements with Australia in early 2021 were very different. ‘The Australian experience took place in a different time, when news might have been viewed as a bit more valuable by the platforms—when platforms were a bit more flush in cash, weren’t laying thousands of their workers off, and weren’t inclined to risk actually blocking news sharing,’ Geist told me. Fast-forward to mid-2023, however, and Facebook has much different priorities: cost cutting, layoffs, artificial intelligence, virtual reality, and returning account access to misinformation spreaders like Donald Trump and Robert F. Kennedy Jr. After the endless scandals of the past few years, many related to digital media’s presence on Facebook, the company is increasingly OK with continuing to deprioritize news. That’s been hard on publishers, MediaDownloader included. It’ll be even worse for Canadian news orgs, which will soon lack any access to Facebook referrals. ‘I think a lot of people have stopped getting their news from Facebook because it’s been choking off access to news for a long time,’ said Jesse Brown, publisher and editor in chief of Canadaland, an independent media network. ‘I fully believe Facebook when they say they could just live without news. It doesn’t earn them much money.’
What ‘options’ does the Canadian government really have against Meta, then? Rodriguez suggested yanking back government-advertising funds offered to social media—which, at only about $8.3 million annually, will hardly make a dent in a nearly $714 billion company. Canadian-British author Cory Doctorow, who’s frequently written about Big Tech’s exploitation of news sites, suggested that ‘the shortest path to trying to make Facebook pay off on this law would be a ‘must-carry‘ rule for news content.’ But such an unprecedented move against Meta would raise free-speech concerns, and likely end up in Canada’s Supreme Court. A targeted measure like that against an American company would also run afoul of North American trade regulations, Geist said.
What about the threat to Meta’s long-battered reputation? That could matter to the company, per a former Facebook news feed employee who spoke with me on condition of anonymity. ‘I’m very surprised if, from the top of the company, the idea was that we just don’t care about news,’ he told me. ‘Everything I heard, while I was there, was that it’s something valuable and important.’ Still, as Geist put it, reputational impact is less concrete than the explicit costs to Meta from the legislation. All around, it’s unclear what leverage Ottawa actually has against Meta.
As for Google? In May, the company told Parliament that the debate over the Online News Act had created ‘dramatically unrealistic expectations among news publishers and politicians, treating Bill C-18 as an unlimited subsidy for Canadian media.’ Google hasn’t yet risen to Meta’s level of brinkmanship; before Thursday’s announcement, it was possible the search giant could have expressed more interest in negotiating with news outlets. Even so, Australia has shown us that not all news outlets will be at the table. It’s easier, Doctorow said, for larger, richer media conglomerates (he gave the example of Rupert Murdoch’s News Corp., which has a notorious footprint in Australia) to work out deals, especially compared with ‘smaller publishers who have to form bargaining units.’ That holds true in Canada as well, where traditional outlets are increasingly concentrated under large corporate owners, while tinier publications scramble for scraps. Doctorow pointed to Postmedia Network (majority-owned by an American private-equity firm that was recently forced to pay millions to settle regulatory charges), which holds major properties like the National Post. It’s also closed down several Canadian newspapers and laid off countless reporters, and is in talks to potentially merge with Nordstar, the private-equity firm that owns the company in charge of the storied Toronto Star. (The cited reason for merger talks, ironically, is the ‘existential threat‘ facing Canadian newspapers.) Nordstar and Postmedia, both of which lobbied in favor of the Online News Act and ran newspaper opinion pieces supporting the legislation, have an inherent monetary and resource advantage to pressing deals with search engines like Google.
‘Think about a publisher that Google can’t live without because it’s the public’s most important publisher, and a search engine that the publisher can’t live without because it’s the public’s most common search engine, and they do a deal together,’ said Doctorow. ‘If Google is the only one that can afford to pay for the one great news entity that everyone looks to, then no other search engine can.’ An agreement could arise that would benefit the most powerful on both sides, and not those who need the support most.
Smaller outlets, meanwhile, risk getting hung out to dry. ‘We’re looking at these dinosaur legacy media companies getting prioritized for these deals with Google, to our detriment,’ Brown said. ‘Now we’re looking at social media sites cutting off access to all news, including ours, whether or not we’re getting a dime from them.’ Brown, notably, has been part of talks between news publishers and the government over the brittle media sector for nearly a decade now. As people attuned to the stakes of smaller Canadian journalism outfits, Brown and Geist were well aware of skewed priorities that ensured from the start that no changes to digital-media law would be universally beneficial. ‘The major media lobbies in Canada wanted the Australian model, and the government insisted that that was the approach that was going to be taken,’ Geist said.
I asked Brown, Doctorow, and Geist whether anything can be done now, post-passage, to improve the Online News Act. None of them seemed bullish in that regard, and they referred mainly to things that could have been done before the act reached its final form. Brown brought up the Canadian government’s prior offerings of news subsidies, which most outlets were wary of because they didn’t want to be financially dependent on the officials they’re holding accountable. Doctorow said Parliament could have instead shaped a privacy law to crack down on surveillance advertising (the basis of Google’s and Meta’s business models)—which, he said, would have been ‘wildly, wildly popular.’ Geist offered that he’d testified in favor of a quasi-tax on platform revenue from advertising, which could direct a percentage of that money toward ‘a fund that would support journalism.’
Of course, none of this came to be, and Canadians are now left with a strange, uncertain digital-media future, a poor prospect at a time of political realignment within Canada as well as a rise in far-right extremism and disinformation. Coupled with the Online Streaming Act, an April law that forces foreign-based digital streaming services to financially support domestic creators, ‘the internet in Canada will look different,’ Geist predicted. ‘The government would say that’s a feature, not a bug. But I’m not sure that Canadians who find themselves unable to share news—or find that certain video services are blocked in the Canadian market because they think the regulatory costs of operating here have been too high—are going to be inclined to agree.’ Doctorow characterized it more bluntly: ‘I think it was a catastrophic mistake.’
The former Facebook news feed worker I spoke with thought that users will find their own ways to resist restrictions, even if links are blocked. ‘The history of this sort of thing is, people find a way to share the content they want to share,’ he said. Even if that’s the case, there could be broader implications for Meta’s actions. ‘They are aware that the Australian example is emboldening different governments to try similar things,’ Brown said. ‘And frankly, I think they’re making an example out of Canada.’
Reference: https://slate.com/technology/2023/06/online-news-act-meta-google-canadian-journalism.html
Ref: slate
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