Made-in-Canada Internet Takes Shape with Risks of Blocked Streaming Services and News Sharing as Bill C-18 Receives Royal Assent
There was no room for dissenting views on Bill C-18. And now there will be no room for Canadian news on the world’s leading social media platform.
Bill C-18, the Online News Act, received royal assent yesterday, but any celebrations by the groups who lobbied for unprecedented government intervention into the news sector must surely have been tempered by the reality that quickly emerged. Meta confirmed that it would block news sharing from its Facebook and Instagram platforms in Canada, while Google met with Canadian Heritage Minister Pablo Rodriguez to see whether a compromise could be reach to avoid a similar outcome. The end result – at least for now – is a legislative mess that leaves no clear winners with Meta downgrading its platforms in Canada, Canadians cut off from their ability to share news on popular social media platforms, Canadian news outlets losing their second most important source of referral traffic, and the government looking to have made an epic miscalculation for having ignored the risks it created by establishing a mandating payments for links system with uncapped liability for the Internet companies.
In less than two months, the government has reshaped the Internet in Canada with Bills C-11 and C-18 leading to streaming services that may block Canadian users and platforms that may block news sharing. The result is a cautionary tale for Internet regulation initiatives with Canada emerging as a model for how things can go badly wrong. The initial Bill C-11 consultations at the CRTC have resulted in some streaming services unsurprisingly responding to legislation that applies Canadian law to every service anywhere in the world by raising the prospect of exiting the Canadian market if not granted exemptions. Bill C-18 threatens to create a Canadian news void on Facebook and Instagram, a result that will increase the visibility of low quality sources and lead to millions in lost traffic and revenues for the supposed beneficiaries of the bill.
While I have seen some seemingly celebrate this outcome, this is nothing to celebrate even if you think Facebook is an awful platform for news sharing. News is not a significant part of Facebook feeds (the company says about 3%) and it is highly substitutable (users spend the same amount of time on the platform whether presented with news links or photos of friends). But it is important to many news outlets, who told the Senate studying the bill that it provides between 17 – 30% of their traffic. This is particularly true for small, independent and digital-first outlets that often rely on social media to develop readership and establish community. Losing those free referral links will have a damaging effect on those news outlets and undermine competition, leading to reduced traffic, less ad revenue, and fewer subscribers. Indeed, the publishers know the value of Facebook since they are the ones that post the majority of links to their own articles. Tough talk from Rodriguez will be cold comfort for those who have lost those links and lost revenues due to government policy.
The mistake was not that the government pursued Internet regulation. It was that it pursued the wrong regulation. It is striking that Bill C-27, the government’s long delayed privacy and AI regulation bill, went virtually nowhere during the Parliamentary session. If the government was serious about constraining big tech, tougher privacy and data governance rules would have been job one, not an after-thought that has languished for years. Instead of trying to stop problematic conduct, the government chose to profit from it. Big tech was treated as a policy ATM to fund policy objectives such as film and television production or the news sector. But having ignored the real costs of its proposals (as well as the real future news developments such as generative AI), the government finds itself in the worst of all worlds with a news bill that may actually result in more losses. Meanwhile, its broadcast bill has some streaming services thinking about reducing their content libraries in Canada and conventional broadcasters lining up to reduce their Cancon contributions.
This outcome was both predictable and entirely avoidable. In the case of Bill C-18, Meta never strayed from the position that the bill rendered Canadian news uneconomic on its platforms and that it would stop news sharing in response. This was never about paying for the use of news articles, since Facebook doesn’t actually post full news articles. Its users do the posting and even then only post links that send the traffic back to the original source. Had the government listened to anyone other than media lobbyists, it would have considered alternatives such as a fund model that would have avoided payments for links, concerns about press independence, as well as risks to trade and copyright obligations. But in a process that initially even tried to exclude Meta from appearing before committee, there was no room for dissenting views. And now there will be no room for Canadian news on the world’s leading social media platform as part of the government’s made-in-Canada Internet.
Post originally appeared at https://www.michaelgeist.ca/2023/06/made-in-canada-internet-takes-shape-with-risks-of-blocked-streaming-services-and-news-sharing-as-bill-c-18-receives-royal-assent/
Find me on: