Google and Meta go to war with Canada

Yesterday Google confirmed what many had expected: in the near future, it will remove news links from Search, News, and Discover for users in Canada. That follows a similar announcement by Meta earlier this month that they will do the same on Facebook and Instagram in response to a new bill passed by the Canadian federal government.

It’s no secret that the media is in trouble — and has been for a while. Every year it feels like we see more layoffs in the media sector, local news deserts expanding, and the range of opinions shrinking as billionaire-funded rage farms circulate increasingly extreme right-wing propaganda across social media. That’s in part because of a structural change in the business model of media over the past couple decades, as their once robust advertising and classifieds revenue streams were decimated and that cash flowed to digital advertising, dominated by Google and Facebook.

In Canada, overall media revenue has declined by $6 billion between 2008 and 2020, at least a third of journalism jobs were lost between 2010 and 2016, and hundreds of outlets across the country have shut down. The Canadian government recognized that was a problem, and passed the Online News Act, also known as C-18, to force “the largest digital platforms” — that’s Google, Facebook, and Instagram — into a bargaining process with Canadian news businesses to compensate them for the news content shared through the platforms.

Justin Trudeau’s Liberal government modeled the process on the Australian news media bargaining code, which was passed in 2021 and also saw Facebook cut off access to news content for a brief period until the law was tweaked. Google did something similar in France and Spain, and threatened to pull news content across the entire European Union. But the tech companies have taken an even harder line in Canada as the government finalizes the details of the regulatory process and jurisdictions like California plan to follow suit.

A flawed process

Let’s be very clear: the bargaining process pursued by the Canadian government, like the one created in Australia, is fundamentally flawed. Back in 2020, I criticized the news media bargaining code for institutionalizing a relationship between tech and media companies, effectively making news organizations more directly dependent on tech companies to survive and thus reducing the incentive for them to challenge the industry.

We’ve long known that large advertisers have influence — whether direct or indirect — over news organizations and what they cover because they supply so much of their revenue, so it would be no surprise to see the tech industry — which already benefits from far too much boosterism and positive coverage — have a similar experience. That’s the last thing we should incentivize through public policy.

In addition, these bargaining codes are designed and pushed by major media organizations whose shareholders will be the primary beneficiaries — not the public or journalists. In Australia, we know that Rupert Murdoch’s News Corp influenced the code and it was a major beneficiary once deals were signed. Canada would have a similar experience, where the Postmedia chain is a major advocate of C-18, but the proceeds it receives will mainly go to the US hedge fund that’s been cutting its news operations to the bone in recent years.

Yet the criticism shouldn’t be targeted exclusively at the government, as is far too often the case in Canadian discourse about the Online News Act. Yes, the government has pursued a flawed model because they followed what Australia did and listened to major domestic players instead of doing a deeper study into how to address what ails Canadian media. But that doesn’t mean we should ignore the power wielded by major tech companies and how their very effective PR operation is being echoed by commentators who present themselves as independent, but far too often line up on the side of those corporations.

Tech-aligned criticism

When it comes to tech policy, the discourse in Canada is infected by imported US narratives that are too often outdated and don’t fit the domestic context. In the case of the government’s recent legislation on tech and media, the traditional libertarian perspective used to assess the tech industry — one that sees the government as basically an enemy of the public and unable to effectively (or sometimes even legitimately) regulate technology — is also the dominant one shaping public discussions. While that’s presented as being critical of the tech companies too, it often serves their arguments just the same.

Alongside C-18 was C-11, or the Online Streaming Act. It was passed into law in April and was designed to update Canada’s Broadcasting Act for the streaming age. In Canada, broadcasters are expected to show a certain amount of Canadian content and contribute to a fund that helps create more, but streaming services have so far been exempt. The bill ensured streaming services would have to participate in the same system, and tasked the regulator to develop requirements for Canadian content on their platforms. It was far from a perfect bill, but, as usual, the tech companies did not want to abide by new regulations.

They tried to scare Canadians by saying the government was going to regulate what they could watch, which was never true, before landing on a much more effective argument. The public enjoys streaming services, but are unlikely to go to bat for US multinational corporations, so instead the industry started to say it wasn’t just streaming companies, but individual content creators that would get hit by the new framework. Even though the government and the Canadian Radio-television and Telecommunications Commission (which makes the final rules) said that was not true, many commentators followed suit, whipping up a frenzy among select YouTubers, TikTokers, and the like — including some who have long been politically opposed to the Liberal government.

The Online News Act has also been subject to a bunch of disingenuous arguments aimed at confusing Canadians. Commentators have called C-18 an attempt to implement a “link tax” that would break the internet, even though similar language was used against the Australian and European plans, and after which the internet continued working just fine. As Google and Meta’s threats to ban news content in Canada have escalated, there have been ongoing warnings that such an act will utterly destroy what’s left of struggling Canadian media — with the blame being placed on the government, not the platforms.

I don’t want to understate the precarious state of Canadian media, where Bell Media recently slashed its news operations and Postmedia and Nordstar are reportedly exploring a merger that will bring even more cuts. But the doomsday predictions are overstated. When Facebook briefly pulled Australian news, publishers saw a 13% decline in Australian traffic and a 30% decline from overseas, but neither news organizations nor readers had much time to readjust before the decision was reversed, which would’ve given us a better picture of the long-term impact. The experience in Spain after Google pulled news content wasn’t nearly as bad. An analysis found the decrease in traffic to be “relatively small,” while publishers “made up for any loss in referral traffic from Google with organic traffic growth.” Small publishers experienced a bit more of a hit, but larger publishers were fine — and benefited from getting readers off of news aggregators and back onto their websites.

Challenging US power

While media reporting on the Online News Act has either been firmly in favor or using many of these disingenuous arguments, there’s one serious problem that rarely gets much space at all: how much power large US companies have over everything Canadians do online. It’s put on full display when monopolistic companies like Google and Meta hold the Canadian public and media to ransom unless the government weakens its regulatory frameworks to better align with foreign companies’ ideas of how domestic laws should function.

When the internet was privatized and expanded through the 1990s, the United States framed it as a tool of freedom and democracy, but it was also a tool of US economic power. As the footprint of the internet grew, so too did the market for US companies that became the hubs of online communication, information, and commerce. It became very difficult for foreign companies to compete without their governments taking protectionist measures that were frowned upon — if not effectively banned under international trade rules — to give them space to grow.

As I mentioned before with the Broadcasting Act, Canada has a long history of cultural protectionism aimed at countering the strong influence of US news and culture, which is why it has a lot of public arts funding and the Canadian Broadcasting Corporation (CBC). In the 1970s, before neoliberalism gutted the ambition of the public sector, Canada even experimented with building its own internet called the Trans-Canada Computer Communications Network (TCCN). Technological sovereignty was a key driver of the TCCN proposal because Canada didn’t want to be beholden to the United States. As media scholar Daniel Joseph put it, “Canada was concerned that unchecked American capitalism would eat Canada’s lunch if the US controlled the internet.” Talk about prescience.

A better future is possible

The challenge Google and Meta are levying against the Online News Act leaves us with several possibilities. The Liberal government can respond by weakening the bill, as Australia did, to better align with the demands of the tech giants and allow the bargaining process to continue, with the outcome of making Canada’s struggling news publishers reliant on revenue from US tech companies. But there’s also the opportunity to take a step back and craft a much different process that not only takes on the Googles and Metas of the world, but also sets Canadian media on a more sustainable path.

I’m not going to claim to have all the answers for what that future should look like, but I can certainly give some thoughts. Instead of directly linking media funding to tech companies, we could instead create a separate fund to publicly finance media that could be partly funded by a tax on online advertising or other aspects of the platform business model. We could even consider allowing the public to allocate some of that funding to diminish any perception the government is simply buying favorable coverage, and whether it should be focused on non-profit media instead of ailing for-profit legacy chains.

A core part of any plan for Canadian media should be to create a more robust CBC with additional funding to better serve its mandate. The public broadcaster is by no means a perfect institution, but Canada is much better off with a strong CBC than without one. Advertising should be removed from the public broadcaster, and funding directed at expanding its local and investigative news coverage. If we challenge the notion that all this needs to be done by the private sector, we could learn from the TCCN and other examples from Canadian history to go even further by making telecommunications a public good, using it to expand access to arts and culture, and even consider building public platform alternatives so it would be harder for Google, Meta, or any other US multinational tech company to hold Canada hostage in future.

Such a bold vision for the future of Canadian media may seem politically challenging, but if we can’t first imagine it and lay it out as a distinct possibility, it has no chance at all — and Canadians deserve better than that.