After Canada became the latest country to enact a law with the intention of compelling digital giants to pay news providers for content, Meta, the company that owns Facebook and Instagram, and Google have both stated that they want to restrict access to local news on their respective platforms within the country. What are the next steps?
Pierre-Elliott Levasseur, the president of La Presse, a renowned French-language daily in Quebec, says he sought for years to negotiate payment deals with internet giants. He believed that these companies were sucking up data and ad dollars on the strength of news items that his around 220 staff members were supplying. However, he was unable to reach an agreement with these companies.
According to what he said, “for years and years they’ve flat-out refused.”
He had hoped that a new law, which would be known as the Online News Act, would change that, and that it would lead to an infusion of revenue that could be invested in the firm.
The rule, which targets companies like Google and Meta, stipulates that technology companies must establish financial deals with various news sites. If the two parties are unable to come to an agreement, the country’s broadcast regulator has the authority to compel them to participate in arbitration.
An independent parliamentary budget monitor has projected that this approach may yield a total of more than C$300 million ($180 million; $226 million) yearly, which would be sufficient revenue for approximately thirty percent of the activities of a normal newsroom.
But rather than a windfall, La Presse — along with every other news organization in Canada — is now facing the prospect of a blackout, as the digital giants have pledged to restrict connections to news items on their platforms if they are forced to comply with the new regulations.
Meta, which has been opposed to the concept from the very beginning, has announced that it will begin blocking news websites for users in Canada over the next several months.
Google has reached financial arrangements with news sources in Europe, Australia, and other regions, and it looked that the company was willing to negotiate prior to these announcements.
But this week, it stated that it would remove connections to Canadian news from its search, news, and discover products in the country once the act goes into force in six months. It also stated that it considered Canada’s present law to be “unworkable.”
It estimates that the traffic it drives to news websites contributes an annual revenue of $250 million Canadian dollars and that it presently has partnerships with more than 150 news organizations in Canada.
When it comes to the payments, the corporation has stated that they are “willing to do more.” “We just can’t do it in a way that breaks the way that the web and search engines are designed to work,” the spokesperson said. “This creates untenable product and financial uncertainty.”
The Prime Minister of Canada, Justin Trudeau, has previously disregarded the warnings from the tech companies that they would remove news content before the law was approved this month.
“The fact that these internet companies would rather deny Canadians access to local news than pay their fair part is a serious problem, and now they are turning to coercive techniques in order to try to get their way in order to achieve their goals. Earlier in the month of June, he stated that the plan would not be successful.
Mr. Levasseur claims that no one in the media is asking for a handout, despite the fact that organizations inside the IT industry have compared the attempt to a “shakedown.”
He responds, “We’re asking to have the opportunity to negotiate a fair commercial agreement,” and that is exactly what we are requesting. The fact that they operate as monopolies is the sole explanation for why they haven’t done it yet.
The manner in which the conflict is settled could prove to be a defining moment in the larger struggle, as nations all over the world, including Indonesia, South Africa, India, the United Kingdom, and the United States, are contemplating taking similar actions.
According to Courtney Radsch, director of the Center for Journalism and Liberty at the Open Markets Institute, an anti-monopoly think tank, the sums under discussion amount to a tiny drop in the bucket compared to the tens of billions of dollars made by the tech giants each year; however, they could prove to be a lifeline for journalism. This is according to Courtney Radsch.
She says, “There is an increasing consensus around the world that Google and Facebook… should pay for the news that they use,” and she goes on to indicate that this sentiment is shared by a growing number of people. “People are coming to the realization that there is a need to safeguard journalism in its role as an essential component of democracy.”
The regulation that Canada enacted was based on a law that Australia enacted in the year 2021. Similar criticism was voiced in response to that law, which prompted Meta to put a temporary ban on news broadcasts.
According to economist Rodney Sims, who ran Australia’s competition agency, which drafted the law, after certain adjustments were made to the bill, the two businesses ended up negotiating more than 30 deals with publishers worth more than $130 million (A$200 million). This information comes from Rodney Sims.
According to him, he has an expectation that the firms will behave in the same manner this time, despite the fact that at Meta, CEO Mark Zuckerberg has been attempting to steer the platform away from news in favor of more personal material.
“Facebook just hates the whole thing,” he admitted, conceding the point. However, “you can’t have effective search with no news,” and “I think Facebook is going to find… that it is very hard for them to give you your feed without any news,” he argues.
“This is the piece that puts the finishing touch on their service.”
Others, though, are sounding the alarm that the way the conflict develops in Canada may be very different.
Phillip Crawley, the chief executive officer of the Globe and Mail, which has licensing deals in place with Google, Meta, Apple, and other companies, pointed to broader changes in search that are currently taking place. These changes include the rise of chatbots like ChatGPT, which generate answers, rather than a list of links, in response to user questions.
According to him, the fact that more governments are contemplating similar regulations gives the firms an even greater reason to fight.
“The world is in a different place,” says Mr. Crawley, who spoke in favour of the law, while noting worries that certain powers granted to Canada’s broadcast regulator could jeopardize the freedom of the press.
Therefore, I do not believe that the model that has been implemented in Australia is one that we ought to be overly influenced by. After all of that… This is the present.”
According to Google and Meta, there are a number of significant legal differences between Canada and Australia. It is important to note that corporations can satisfy regulators in Australia without having to sign deals with everyone. There is no legal way out of this situation in Canada. Additionally, it regulates a wider variety of content kinds.
Google claims that it attempted to voice its reservations about the measure to the government before to the bill’s passage, but that its efforts were largely unsuccessful. According to a source within the corporation who spoke, even though the government returned to the negotiating table after the bill was approved, the “overtime” negotiations that took place during that time were much too late to resolve the issues.
Given the changes in Meta’s company, Canadian tech legal professor Michael Geist, who is also a prominent opponent of the bill, claims that the government has made an incorrect calculation.
According to the company, the percentage of adults who use Facebook for news consumption is expected to drop from 45% to 30% between 2016 and 2022. Additionally, the company’s studies of users have shown that users prefer to see less news on the network.
“Why did the government not see what was in plain sight?” Mr Geist said. “Facebook is not bluffing – they would like to get out of the news.”
Google has stated that it will continue to take part in the regulatory process, which might take many months to conclude and places many newsrooms in a position where they face greater disruption.
According to Mr. Crawley’s testimony before parliament one month ago, Google is responsible for thirty percent of the traffic at the Globe and Mail, which now derives two-thirds of its revenue from subscriptions.
Google is the source of about 40 percent of visitors to the prominent French-language magazine Le Devoir, while social media is responsible for roughly 30 percent of them.
According to sources, Meta has already taken steps to cancel the partnerships it has in place with publishers in Canada, which could be worth millions of dollars, as well as the funds it had contributed to a fellowship program.
Mr. Levasseur admitted that there would be repercussions in the event of a blackout at La Presse, which is lucrative and is primarily supported by the contributions of its readers and advertising revenue. However, he stated that he had faith that the journal, which has a daily readership of approximately 1.4 million people, will adapt, just as it had to the various previous disruptions in the news industry that were caused by the actions of digital giants.
“When we decided to stop publishing the [print] paper, we noticed a decline in advertising revenue. “Right now it’s getting worse,” he says. “We were able to adjust then, and I’m sure that we’ll be able to adjust in the future.”
