Global Courant
Canadian lawmakers are embroiled in a dispute with internet technology companies over a law that would force them to pay news publishers for content, years after a similar regulatory saga played out in Australia.
On Thursday, Google followed Meta in announcing plans to block news for Canadian users now the The Online News Act has become law. It is expected to take effect later this year.
Google spokesperson Zaitoon Murji told BNNBloomberg.ca in an email that the company has made the “extremely difficult decision” to remove Canadian news links from its search, Google News and Google Discover platforms, calling its problems with the legislation “unworkable” and unlikely to be resolved through regulation.
“We are disappointed that it has come to this,” Murji said. “None of our suggestions for changes to C-18 were accepted.”
Following Google’s move on Thursday, Heritage Secretary Pablo Rodriguez sent out a written statement calling the companies’ actions “deeply irresponsible and unattainable… especially when they make billions of dollars from Canadian users” through advertising.
Australia’s regulatory experiment – the first of its kind in the world – also got off to a rocky start, but technology companies, news publishers and the government have since struck a middle ground.
Canada can take lessons from Australia’s story, but experts who spoke to BNNBloomberg.ca warned that different economic, political and geographic realities could lead to a different outcome.
WHAT HAPPENED IN AUSTRALIA?
In both Australia and Canada, governments have introduced legislation to force online technology companies such as Google and Facebook parent company Meta into agreements to pay news producers for content shared on their platforms.
Tech companies were against the laws in both cases.
Rob Nicholls, an associate professor of regulation and governance at the University of New South Wales, explained in an email that both Meta and Google in Australia threatened to leave the country if the law came into effect.
Google “hasn’t made major changes to its local policies,” he said, but it now follows a different product schedule than the U.S.
Facebook temporarily closed access to news in 2021 in response to the legislation. Nicholls noted that it also blocked access to other pages such as health departments and charities, leading to threats from the Australian health department to pull ads – an idea floated by the Canadian legislature on Twitter Anthony Housefather in response to Meta’s last steps here.
After a week, both Facebook and Google began negotiations with news companies in Australia and the law has never had to be enforced since.
The Australian government has since stated this its News Media Bargaining Code “a success so far” in a December 2022 review of its first year in effect, pointing to more than 30 commercial agreements between tech companies and news producers.
Nicholls said an estimated A$150 million in annual revenue was taken from the law – although that fell short of what the media companies wanted. Concerns have also been raised that smaller outlets have been barred from receiving funds.
WHAT HAS CHANGED: GEOGRAPHY, FINANCE AND THE PASSAGE OF TIME
Nicholls said geography – the proximity between Canada and other markets – is a big difference from the Australian context.
“Australia is a long way from other Meta and Google activities – there is no land border to the south,” he said.
Gavin Adamson, an associate professor of digital journalism at Toronto Metropolitan University, also said Canada’s proximity to the U.S. “adds a complication” because tech companies “don’t want to be in a position to enter into negotiations to pay news agencies in a country with a much larger media network.”
Michael Geist, Canada research chair in internet and e-commerce law at the University of Ottawa, said another factor that has changed from the Australian context is the financial situation technology companies are in now. Meta has focused on cutting costs in its “year of efficiency,” and it may be “less willing to cut big checks that don’t add much value to the company.” Google also cut jobs this year in the face of similar headwinds in the technology industry.
There is also a slight difference between the two laws. In Australia, the government has more say over who the law applies to, and in Canada, the CRTC is making the last call, raising concerns for the companies about the process, Geist added.
Regulation is the last option to strike a middle ground, Geist said, but Meta and Google have both said they don’t believe regulatory changes will be enough to halt their plans.
Google said it has received no assurance from the government that its primary concerns — forced payment for links and “unlimited financial liability” — will be resolved.
GOVERNMENTS VERSUS BIG TECH
Aside from the issue of supporting news producers, the situation also highlights the difficulty governments face when it comes to governing powerful big tech companies.
Heritage Secretary Pablo Rodriguez invoked that dynamic in a statement to BNNBloomberg.ca on Thursday.
“The Online News Act levels the playing field by controlling the power of big tech,” he said in an emailed statement.
“Big tech would rather spend money changing their platforms to prevent Canadians from accessing good quality local news, rather than pay their fair share to news organizations.”
The companies and the Canadian government both have a lot at stake when it comes to the law, Geist said.
For Meta, it’s a chance to send a signal to other governments about regulations they’ll tolerate, which is one of the reasons Geist doesn’t think Meta will back down from her threats.
“They would really lose pretty much all credibility with other countries at this stage if they walked away,” he said.
Meta’s decision was predictable, Geist argued, as the company had long threatened to remove links in light of the upcoming law. But “Google’s response was always more uncertain,” he wrote in a Thursday blog post, because “values the news in a way Meta doesn’t.”
“Meta pointed to data showing that news contributed little to users’ news feeds and was highly expendable. By contrast, Google’s search results are bread and butter and the removal of Canadian news results undeniably makes the flagship product worse,” Geist wrote.
“That was an unwelcome choice either way: agreeing to flawed legislation that sets a dangerous precedent for paying for links, or knowingly diminishing the value of its own service.”
The federal Liberal government has “cornered itself” with its stance on the law, he noted in Monday’s interview, as they went ahead with their plan despite having other options to help the news industry. If tech giants make news, news publishers would take a significant financial hit, he added.
“Both their policies and the government’s own credibility on this issue is at stake,” he said by telephone.
Adamson pointed to the increasing “bad PR” when it comes to corporate social responsibility from tech companies, saying that companies “need to see the benefits of a strong democracy and, with it, a healthy media ecosystem.”
“That includes a bit of a financial blow, but it also improves your financial outlook from a social governance perspective,” he told BNNBloomberg.ca in an email. “If I were the government, I would just keep emphasizing that point.”
WHAT HAPPENS NOW?
Rodriguez told media outlets this week that the government will provide unspecified support to news producers as Meta and Google block local news. The government said on Thursday it is working with Google to clarify next steps.
Google spokesperson Murji said the company is “concerned” about how the law could reduce access to news in Canada, and plans to participate in the regulatory process.
“We hope the government can chart a viable path forward,” Murji said.
Nicholls said the threats from both Meta and Google are “credible” and that both companies could potentially continue.
Adamson said he expects a “political stalemate” between the companies and the government in the near future.
“I’d still be surprised if Alphabet and Meta pulled out of Canada altogether in regards to news content on their platforms, but it’s hard to know,” he said.
Geist, meanwhile, said he disagrees with those who view Meta’s repeated threats to draw news as a bluff.
“Part of their purpose now may be to make it clear that it wasn’t a bluff,” Geist said.
If news is pulled from online platforms in Canada, he said proponents might stop pushing the Australian model of making technology pay for news, and Canada could become a cautionary tale of what could go wrong.
“We may end up with others saying ‘Don’t be like Canada,’ where you find major social networks cutting the news in the country.”
