Backdown or Bailout?: What Comes Next for the Government’s Epic Bill C-18 Miscalculation
Backing down seems very unlikely. That could leave a government bailout to make up for its legislative mistake that will cost the industry hundreds of millions of dollars.
Meta’s announcement this week that it has started to block news links in Canada on both Facebook and Instagram due to Bill C-18’s mandated payments for links approach has sparked a flurry of commentary and coverage. News outlets such as Le Devoir have joined the Globe and Mail in expressing doubt about the government’s approach, news coverage has examined why the Meta ad boycott hasn’t taken off (hint: the government’s own party is still launching new ads) or why the Australian experience hasn’t been replicated in Canada (hint: different law, different time). Meanwhile, the political response has been discouraging with the government pretending to forget the Conservatives’ actual vote against Bill C-18 in the House of Commons, while the Conservatives insist on calling Bill C-18 a censorship bill when it isn’t. But perhaps the most interesting response is the speculation about what comes next. I don’t think anyone really knows, but this post offers a few possibilities.
At one end of the spectrum is the prospect that the government backs down and looks for a way to diffuse what has become a massive policy blunder. Notwithstanding the tough talk, the reality is that the bill is already a failure and seems certain to cost the Canadian media sector hundreds of millions of dollars. While withdrawing the bill would restore the status quo, the political equivalent of admitting total defeat is almost surely not going to happen. The government could alternatively pursue a small amendment that would remove the trigger on the bill taking effect by the end of the year. By restoring the pre-Senate amendment approach of the bill only taking effect once the regulations are finalized, the government would better control the timing and remove the immediate urgency of finding a Bill C-18 compromise.
If that too is politically unpalatable, the next option would be to continue to negotiate with Google on the regulations. Last month, the government made it clear that it was open to some significant changes, notably including identifying a spend requirement by the platforms, which would address cost certainty concerns. The fact that there is no deal suggests that the two sides remain apart on what that number should be, but as the deadline draws closer, a negotiated deal is always possible. Such an approach would not bring Meta back to news, but would at least bring Google on board and limit the Bill C-18 damage.
Without a compromise on either the bill’s timing or its regulations, the government would again be betting that Google is bluffing. Yet it seems far more likely that Google would follow the Meta approach and block news links in Canada. That move would cause enormous harm: hundreds of millions more lost to the sector in cancelled deals, lost links, and a bill that generates absolutely no new revenues. The Canadian public would also experience the effects of the bill more directly with search results directly affected. And Canada would find itself as a global digital outlier with restricted services on some of the world’s most popular Internet platforms.
Should that come to pass, the government would likely consider three courses of action: punishing Google, exploring additional ways to address the media challenges, and considering direct support for the media sector to alleviate the harm caused by its own bill. Punishing Google would presumably include expanding the ad boycott and encouraging Canadians to consider using alternate search engines, neither of which would move the needle in any meaningful way. It might also involve considering Competition Act action, but the government’s case is not a strong one. Google and Meta are simply abiding by the standard set in Bill C-18: if you link, you must negotiate payment, but if you do not link, there are no such legal obligations. The government could consider a sort-of “must carry” for the Internet – a “must link” requirement for news – but that heads down a dangerous path of government determining what content must be carried (or potentially blocked) online. Moreover, the government might be free to require a platform to link to certain content or to ensure that it does not discriminate against it. But it is something else entirely to require a platform to both link to content and to pay for those links.
As for additional measures that could be implemented, supporters of the bill are proposing various alternatives, including removing the CBC from the law and creating time-limits on its applicability. Of course, the time to suggest reforms was when the law was still a bill. For example, I suggested multiple reforms when I appeared before the Senate, including making contributions to a fund to support journalism an alternative to the multiple deals that require CRTC approval. While others now back the fund model, a voluntary fund (as some have suggested) does not address the concerns with the legislation.
The third and most worrisome course of action would be for the government to bail itself out of the Bill C-18 mess by using public money to compensate for the losses that it triggered. But a bail out for its miscalculation should be a non-starter as it would mark a huge government intervention into the media sector and result in the public directly funding media at an unprecedented level that call into question its very independence. As I’ve been saying for months, there are no winners with Bill C-18. The government – egged on by the media lobby – ignored the risks of mandated payments for links and it should not fall to the public to bail them out. Indeed, if anyone is going to pay for this miscalculation, it should be the government by fixing its mistake, not wishing it away on the public’s dime.
Post originally appeared at https://www.michaelgeist.ca/2023/08/backdown-or-bailout-what-comes-next-for-the-governments-epic-bill-c-18-miscalculation/
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