Tech giants and Ottawa’s fight over paying for news could have global impacts: experts
March 14, 2023 01:03 pm
The stakes for Meta and Google in their stand-off with the federal Liberal government over sharing revenues with news publishers are bigger than just what happens in Canada.
The fight over C-18, the Online News Act, will likely have international repercussions for the tech giants, industry watchers say.
“This is a game of chicken and so they’re asking now, ‘is the government gonna blink?’” said Carleton University professor Dwayne Winseck.
On Friday, MPs from all major political parties united in taking Google to task for blocking some Canadians’ access to news on the company’s platforms. Google said it was a “test,” in anticipation of Bill C-18 becoming law, and would be ending after five weeks.
Meta confirmed over the weekend it would remove news content from Facebook and Instagram if the Online News Act, as it’s currently written, becomes law.
The legislation would require Google and Facebook’s parent company Meta to reach commercial deals with publishers. Postmedia, publisher of the National Post, is in favour of the legislation, which is currently in front of the Senate.
Other countries are in the process of developing similar legislation to Bill C-18, said McGill University media professor Taylor Owen. That means the tech giants are mindful of what precedents will be set in Canada.
“If it’s seen as working here, it’s going to be adopted and built on in half-a-dozen to a dozen other countries within the next year or two,” he said. “And that is a legitimate concern for them financially.”
Both companies have taken issue with language in Bill C-18 that they say will effectively force them to pay for links to news content. Google told a parliamentary committee Friday the bill “puts a price on free links to webpages, setting a dangerous precedent that threatens the foundations of the open web and the free flow of information.”
Meta spokesperson Lisa Laventure said in an emailed statement that a “legislative framework that compels us to pay for links or content that we do not post, and which are not the reason the vast majority of people use our platforms, is neither sustainable nor workable.” She said the company is taking the same position it previously took in the United States.
Given the international context, C-18 is a precedent that Google and Facebook “want to avoid at all costs,” Owen said.
“That might mean that they’re willing to go further than we might have thought, or that might seem reasonable or rational if it was just about the Canadian market,” he said.
Similar bills are underway in United States, the United Kingdom, New Zealand, Brazil and other countries. If C-18 becomes law, Canada could become the second country in the world to pass news revenue-sharing legislation aimed at the two tech giants. The first was Australia, which experienced a similar face-off with Google and Facebook before making last-minute amendments to the legislation.
The issue in the Australian case wasn’t how the legislation treats links, but how companies are designated as entities covered by the act. If companies reach commercial deals with publishers, they are not designated as entities and the bargaining code does not come into force. Although the Australian legislation became law in 2021, the bargaining code hasn’t actually been triggered to come into effect.
Canada’s Bill C-18 is based on a similar idea of forcing the companies to reach commercial deals, but differs in execution, and in that the Canadian regulations would be in effect no matter what. In Canada, the companies would avoid mandatory arbitration if the CRTC deems the commercial deals as fair.
Critics say Bill C-18’s premise that companies need to compensate publishers for making news available, including by “including an index, aggregation or ranking of news content,” effectively puts a value on links to news stories. Internet advocacy group OpenMedia has argued links and clicks are the only quantifiable criteria that can be used to determine value under the bill.
But supporters of the bill take issue with how Meta and Google describe the issue of value for links, and note the legislation doesn’t actually mention links. Paul Deegan, president of publishers’ group News Media Canada, said “there is no ‘link tax’ in C-18. If parties have concerns, they should be constructive and propose specific wording changes.”
Heritage Minister Pablo Rodriguez said in an emailed statement “C-18 has nothing to do with how Facebook makes news available to Canadians. All we’re asking Facebook to do is negotiate fair deals with news outlets when they profit from their work. This is part of a disappointing trend this week that tech giants would rather pull news than pay their fair share.”
Taylor said he doesn’t see a potential compromise. “The word link doesn’t appear anywhere in the legislation. It has just been suggested, quite reasonably I think, that it could be one form of evaluating value or determining value, but it’s not dictated… So I don’t see what the compromise is on that.”
Winseck said the international precedent could also be a harmful one for the companies.
“Canada right now is amongst an international group who are working on these issues,” he said. “Google and Facebook can pound their chests all they want right now, but even if they were to be victorious here in Canada, it would be a pyrrhic victory. They would lose so much respect and possibly contracts in Canada, and there’s other governments just waiting in line.”
Source - National Post