Illustration of a 3D printed Facebook parent Meta Platforms logo in front of Google logo on Nov. 2, 2021.DADO RUVIC/Reuters
Jonah Prousky is a management consultant and freelance writer who focuses on business, technology and society.
It’s been nearly four months since Meta began removing Canadian news links from Facebook and Instagram in response to Bill C-18. If Justin Trudeau’s government doesn’t change course in its dealings with Big Tech, history tells us it could be years before Canadian news returns to these platforms.
To fix this legislative mess, our lawmakers should be looking at how other countries have dealt with Big Tech and its use of news links in the past.
Proponents of Canada’s new measures point to the example of Australia, whose News Media Bargaining Code was the inspiration for C-18. But they forget that’s where the similarity ends. Australia succeeded because its measures allowed for a compromise. The parties found a modest, imperfect solution, which got its news providers paid.
Spain, on the other hand, took a harder line with Big Tech and failed spectacularly.
Australia’s News Media Bargaining Code stipulates that “designated” digital platforms will be required to pay Australian publications for featuring news links on their platforms. To date, no digital platform has been designated, but that’s exactly why the law was hailed as a success.
Australia’s law allowed for exemptions if the tech giants could come to their own agreements with the media. According to a 2022 report by the Australian Treasury, the law, despite not being applied in a direct way, encouraged Google and Meta to strike at least 30 private agreements with Australian publishers, in which the tech giants forked over a collective AU$200-million.
Opponents of the law have pointed out that the legislation has a punitive effect on smaller publications, many of which weren’t offered lucrative deals by Google or Meta. Regardless, a nine-figure cash injection would do wonders for the Canadian news industry.
In 2014, Spain had a similar tussle with Big Tech. At the time, the government of Spain attempted to impose a “link tax” on tech giants for featuring snippets of Spanish news on their platforms. Unlike Australia’s, Spain’s move left no room for compromise. As a response, Google pulled its news product from Spain for a whopping eight years, until 2022, when the legislation was amended.
Spain’s legislation hurt the very news publications it sought to help. In a 2017 editorial published by El País, Spain’s largest and most widely read newspaper, the editorial board openly criticized the law, claiming it led to a significant drop in traffic.
Across Europe, governments have made this same mistake. Germany, for example, tried the “link tax” in 2013. In response, Google dropped German news links from its platform. According to one columnist, the publishing giant Axel Springer saw referrals to its publications fall by 80 per cent. The German government exempted Google from the law shortly after.
On this issue, Google and Meta have proven to be ungovernable. Faced with legislation in several countries, tech giants have simply hit the off switch, just as they’ve done in Canada in response to C-18.
In the view of the platforms, it’s easy for tech giants to hit the off switch because, according to Google’s submission to Parliament, “Google does not earn or seek to earn meaningful revenue from news.”
How then did Australia win out where other countries faltered?
What Australia did was nudge, in a non-legal sense, tech giants into paying their fair share. They poked the beast, accepting that perhaps they didn’t have the bargaining power to fully legislate it. Anything more, and Google and Meta would have simply hit the off switch.
If Canada wants to secure a similar payday for its news industry, that’s what it’s going to have to settle for.
Google wants certainty that C-18 will not apply to it if the company can work out its own agreements with the news media. Australia’s law gave it that. It allowed Google and Meta to keep their finger on the off switch, while they paid off Australian news publications to keep the government at bay.
Canada’s bill does hint at that, but it does not grant any certainty. Rather, the law will apply to Google and Meta on Dec. 19, only after which tech giants can be considered for exemptions, provided they “reach fair commercial agreements with a wide range of news businesses and contribute to the overall sustainability of the news marketplace.”
The tragedy of C-18 is that Big Tech was willing to co-operate with the Canadian government to define the exemption process. Google’s requests – such as a liability cap on the company’s total financial exposure to C-18 – were reasonable, though mostly ignored by Parliament.