Commentary
How Canada Is Killing Its News Industry
- by Gord Hotchkiss , Featured Contributor, August 15, 2023
-- Like everywhere in the world, Canada’s news outlets are starving for revenue. Advertising is drying up, as more budget moves online.
-- In an ill-advised attempt to shore up the Canadian News industry, the federal government passed bill C-18, the Online News Act, which says that Facebook, Google and other tech giants must pay news organizations when someone comes to a web story through a link on one of their platforms.
-- Meta said -- basically: "WTF? We’re sending you traffic. You want us to pay for that? Fine, we’ll shut off that traffic."
Back in June, Meta posted this notice: “In order to comply with the Online News Act, we have begun the process of ending news availability in Canada. These changes start today, and will be implemented for all people accessing Facebook and Instagram in Canada over the course of the next few weeks.”
Those changes started stripping news from our social media feeds in the last few weeks. I haven’t seen one news item on my Facebook feed in the last week.
If you’re confused, you have a lot of company north of the 49th. Logic seems to be totally missing from this particular legislative hammer toss from Justin Trudeau and his merry band of lawmakers.
If there's any logic, it may be that many users never bother to click through to the actual story. They apparently get all the news they need from doomscrolling on Facebook.
In a blog post, Michael Geist, the Canadian Research Chair in internet and ecommerce law at the University of Ottawa, calls the bill a “Lose-Lose-Lose-Lose.”
For the media outlets that this bill is supposedly protecting, Geist writes, “It is difficult to overstate the harm that Bill C-18 will create for the media sector in Canada, with enormous losses that will run into the hundreds of millions of dollars.”
Oops.
Geist details how lobbyists and supporters of the bill were sure Meta was bluffing and would come to the table to negotiate when bidden to do so. A law professor from Carleton University said “I am not worried. The threats they are making, they are doing this all around the world.”
But Meta wasn’t bluffing. And why would it? When you hold all the cards, you don’t have to bluff. Some news publishers estimate that as much as 50% of their traffic comes from these online channels. A recent study by Maru Public Opinion showed that 26% of Canadians say they get their news from social media sites. For younger age cohorts, this percentage jumps to 35%.
News publishers have now lost that traffic, with no offsetting revenue from Bill C-18 to compensate for it. For a bill that was supposed to save the Canadian news industry, this seems to be hammering nails in the coffin at an alarming rate.
As Geist said, this is “a cautionary tale for a government that blithely ignored the warning signs, seemed to welcome a fight with the tech companies, and had no Plan B.”
If there are lessons to be learned -- or, at least, points to be pondered -- in this Canadian debacle, here are two to consider:
This shows that legislators, not just in Canada but around the world, have no idea of the new power dynamics in a digital economy. They still carry the quaint notion they are the power brokers within their borders. But this shows that Meta could care less about the Canadian market. We are a drop in their global revenue bucket. Not only have has the company not caved in when confronted with the awesome might of the Canadian government, it hasn't even bothered coming back to the table to talk. When the Liberal lawmakers decided to take on Meta, they were taking a knife to a gun fight.
Secondly, I wonder how one third of Canadians will now be informed about what’s happening in the world. With any information sources with even a shred of journalistic integrity stripped from their Facebook and Instagram feeds, who will they be listening to? In a bid for survival, Canada’s news publishers are supposedly launching a desperate campaign to “re-educate” us on how to find the news.
Yeah. We all know how successful “re-education” campaigns are.
Finally, in the irony of ironies, as it squared off against Facebook in this ill-fated battle, Canada’s Liberal government launched a new campaign asking us to share our thoughts on a “Summer Check-In Survey.”
Their platform of choice for this campaign? Facebook.
The Canadian government blew it with this bill and Zuck took his ball and left Justin should be begging FB back to the table and drop C-18 would be a start which isn't going to save the Canadian Media did they want C-18 to pass or were they against it?
Wasn't this Canadian program modeled after the Australian one....that successfully got Facebook to pay the news sites?
You are right Scott. There was a lot of push-back, but considering the income of the digital entities the amount they are required to pay is relatively small.
"Fakebook" was most acurately described as "data pirates" in a British Parliamentary Report in 2018 subsequent to the shocking Cambridge Analytica scandal and "Fakebook/Meta's" continuing threat to democracy. The fine Meta ultimately paid in the US should have been $725 Billion of course, not $725 million! On top of which, Meta and other digital entities still egregiously circumvent 'publishng norms' courtesy of Section 230 of 1996 Communications Decency Act in the US which has long needed radical modification.
As a proud Canadian and a former Manager at The Globe & Mail, Canada's National newspaper, I applaud the underlying principle of what C-18 was trying to achieve (similar to the outcome in OZ even if copyright payments were "relatively small"). However, the complete failure of the strategy and execution is surely yet another indicator that these massive digital entities must be broken up?
Gord and the Editorial Team: The more honest headline would have been: "How Meta is Killing the News Industry in Canada and around the World"