Meta has announced that will test blocking news sharing in Canada on its platforms Facebook and Instagram in response to Bill C-18’s system of mandated payments for links. Even as some have suggested the position is bluff, the company has not wavered for months as this emerged as the most likely end game. Back in October, it said it was considering blocking news and in March it confirmed it. The government now says it won’t give in to “threats” but the reality is that Canadian Heritage Minister Pablo Rodriguez more accurately described it last year as a “business decision” when he appeared before the Heritage committee. Given that Facebook says news is responsible for only three percent of content on user feeds and that it is highly substitutable (ie. users spend the same amount of time on the platform whether scrolling through news or other content), the business choice seems like an obvious one.
The Meta test plan will run for about a month, affect as much as five percent of the user base, and target randomly selected news organizations. After Google was heavily criticized for running similar tests without initial disclosure, Meta is proactively disclosing its plans. The angry response from the government is unsurprising, but the testing is consistent with what the company has told Parliamentarians, namely that it will not block government or emergency sites that were scoped into news blocking in Australia several years ago. In order to live up to those assurances, the company presumably wants to test its blocking system.
While some argue that Canadians should welcome Facebook exiting the news sharing business, recent Senate hearings have left little doubt that there will be a significant negative impact on Canadian news organizations. The Globe and Mail told the Senate this week it could result in millions in lost revenues, while others advised that somewhere between 17-30% of their traffic comes from social media such as Facebook. That alone should highlight the value that the free links provide, yet the government – egged on by the media lobby – want hundreds of millions of dollars for those links with the prospect of 35% of their news expenditures covered by Facebook and Google. Further, Facebook has entered into deals with many Canadian news organizations and those agreements would be placed at risk by Bill C-18 and a decision to stop news sharing.
Given ongoing concerns with privacy and other issues, there are unsurprisingly few fans of Facebook right now. But there should be even fewer supporters of legislation premised on mandated payments for links with the majority of money going to broadcasters such as Bell, Rogers, and the CBC. Indeed, if Facebook copied full text articles and ran ads against them, one could understand the claim for compensation. But when the vast majority of news links are posted by the publishers themselves and the free referral traffic represents an important source of publisher revenue, the legislation is better viewed as a shakedown rather than a system of fair compensation. When coupled with fears expressed by the Globe and Mail and others that it is a “threat to the independence of media”, Bill C-18 is desperate need of an overhaul.
There were better alternatives for the government that would have opened the door to greater compensation without payment for links. The government and Rodriguez’s decision to bully ahead with Bill C-18 despite the prospect of blocked links and lost millions for Canadian publishers is a massive miscalculation. Using words that would apply equally to Stellantis, Rodriguez now says “they come here and they tell us, ‘If you don’t do this or that, then I’m pulling the plug,’ – that’s a threat and that is unacceptable.” In the case of Stellantis, the government appears prepared to provide billions in additional subsidies. But for Bill C-18, it inexplicably seems ready to jeopardize years of support for the news sector and undermine its standing as a supporter of the free flow of information online.