Canadian Heritage Minister Pablo Rodriguez appeared last night before the Senate committee studying Bill C-18, facing repeated questions about how his government will respond if Internet platforms such as Facebook block news sharing in response to bill’s system of mandated payments for links. Much like Prime Minister Trudeau earlier in the day, Rodriguez had few answers, relying instead on tough talk about not backing down against the tech companies or warnings that even talking about the risks was playing into their hands. Yet the reality is that the government has boxed itself into a corner with fatally flawed legislation that could leave Canadian news organizations with lost revenues and Canadians with reduced exposure to reliable news.
Not about paying fair share or importance of local news. It’s about Bill C-18’s mandated payments for links, most of which publishers post themselves. Meta stopping news sharing in Canada if forced to pay hundreds of millions for links entirely predictablehttps://t.co/q8RqvdYV9d
— Michael Geist (@mgeist) June 7, 2023
Rodriguez tried to portray Bill C-18 as a market-based approach with limited government interference which only requires media outlets and Internet platforms to negotiate agreements. This just isn’t true. The bill involves unprecedented government intervention in the media sector as it sets the rules that deem hundreds of news organizations as “eligible news businesses”, establishes standards that target Google and Facebook (Rodriguez admitted that no other Internet companies would currently qualify), determine the criteria for the increasingly government captured CRTC to judge the agreements, and legislate that the subject of negotiation is payment for linking. Moreover, when asked about the inconsistency of likening linking to “stealing” and refusal to link as “bullying”, Rodriguez could only offer a word salad.
Great question from Senator Manning to @pablorodriguez on Bill C-18: when platforms don’t pay for links some in government say it is stealing and when they say they won’t link government calls it bullying. How to reconcile? pic.twitter.com/e1j5N1UuId
— Michael Geist (@mgeist) June 8, 2023
The political calculation behind Bill C-18 was pretty simple. The government thought it could use a legislated shakedown of Google and Facebook to force them to pay for links, envisioning that upwards of 30% of the news costs of every news outlet in country would be covered by the two tech companies. Yet the value proposition for news links flow the opposite way as publishers post the majority of the links themselves in hope of increasing traffic on their sites, leading to greater advertising revenues. The notion of requiring Facebook to pay for links posted by their users never made any sense. It made even less sense when Facebook revealed that news comprised only 3% of its users’ feeds and was highly substitutable by other content.
Given that reality, the “business decision” that Rodriguez noted last night isn’t particularly difficult. Facebook will exit the news sharing business in Canada, leaving many Canadian news publishers with less traffic and reduced revenues. Rodriguez suggested that the government has many options in response, but was unable to cite much beyond hints of pulling government advertising from the platform (whether the Liberal party would pull election advertising and cede social media advertising to opposition parties would make for an interesting choice) or plowing more public money into programs that could presumably include a journalism support fund. Ironically, had it opted for a journalism fund model in the bill, the platforms likely would have cooperated. That model may yet prove to be the answer, but funded by taxpayers due to the government’s epic Bill C-18 miscalculation.