In a news conference in Ottawa earlier this month, Heritage Minister Pablo Rodriguez sought to provide context for the tech industry’s reaction to the recently passed C-18, which outlines a process for media organizations to arrange deals with tech companies for ad revenue.
Since the bill was enacted, both Meta and Google have taken steps to remove Canadian news articles from their platforms, claiming that the bill is “unworkable” for their products. While Google has demonstrated a willingness to sit down with the government, Meta has thus far refused. In response, the Canadian federal government, without the support of Prime Minister Justin Trudeau’s Liberal Party, has said it will remove all ads on both platforms.
Minister Rodriguez called the tech platforms “bullies” for removing news links and accused them of “threatening democracy” itself. Citing Meta and Google’s profits, NDP MP Peter Julian said it was “time for them to give back” by turning over some of their money to local and regional newspapers, and online publishers.
Bloc MP Martin Champoux suggested using yet more tax money to push advertisers to spend on traditional platforms. “The government should do more. Perhaps even more incentives to advertisers to leave Meta’s platform and return to traditional sponsorships,” he said.
In a separate interview, Prime Minister Trudeau kicked it up a notch by claiming that Facebook’s actions were an “attack” on Canada akin to WWII.
Since then, the government has already outlined its own concessions to soften the blow, but the point remains.
There are plenty of articulate critiques of C-18, but the most concerning part of this entire process is that the template they’re drawing from is also massively flawed.
In name, the law is about saving journalism. Practically, it grants permission to a cartel of news organizations and corporations to force extractive payments from (mostly US) tech firms that have significant online platforms. And large media companies stand to gain the most.
The Australian example is a key talking point for Rodriguez and Liberal supporters of C-18, but its success is rather opaque.
If anyone asks the Australian government or peeks at their reports compiled by the Treasury, they claim it a “success to date,” owing to the 30 individual agreements struck between news publishers and the tech titans of Google and Meta.
But the number of agreements is the only metric we have, and it’s not surprising to see large mega corporations topping the list, including US entertainment conglomerates like Paramount Global and Rupert Murdoch’s News Corp, but also Nine Entertainment, owned by the family of now-deceased Australian media tycoon Kerry Packer (a mini-Murdoch, if you will).
What about small, regional outlets that bills like the Australian News Bargaining Code and Canada’s C-18 portend to help?
At least two academic articles have examined this impact, and both concluded that large corporate media entities gained significantly while smaller newsrooms were unable to capture gains at the same rate. “It is yet to be seen how the NMBC contributes to maintaining a sustainable business model for public interest journalism, other than continued payments from platforms,” said one group of researchers.
The Australian Treasury report notes, “it is acknowledged that many smaller news businesses would face significant challenges in participating in negotiations with digital platforms.”
Chris Krewson, executive director of LION Publishers, an association of US local news publishers analyzing the law, sums it up more bluntly:
He wrote that there’s “no evidence that the dollars that flowed actually meant more journalism,” later pointing out that despite the $200 million infusion of cash from Big Tech, Australian media outlets still struggled immensely during the pandemic, and local outlets especially found the task of even entering negotiations to be a “lengthy and expensive process”.
For those smaller publishers and media outlets struggling and unable to strike their own deals, the Australian government signals it may need to extract yet more money for future subsidies: “Ultimately, as noted earlier, small news businesses may be better assisted by other types of Government support.”
In that case, it seems Australia will need to dole out yet more subsidies, tax schemes, and government financing to support the journalism industry. Why should Canada be any different?
What C-18 and similar laws attempt to do is to organize, coordinate, and force a business model for a particular industry. But in doing so, it is giving an upper hand to large media conglomerates with a decaying business model that will now forever grow addicted to deals with tech firms.
One could even argue that Canada’s government is harming the open internet itself by forcing online firms to pay traditional media. This, all the while platforms like Substack, YouTube, Patreon, and many others are better serving news consumers who are directly paying media outlets they enjoy and benefit from.
In slowing the inevitability of bankrupt legacy media firms, the government cannot endorse bankrupt ideas to save them.
Yaël Ossowski is deputy director of the Consumer Choice Center.