The fight over the future of digital news is in Canada

The law, which supports the intelligence industry, has turned Canada into the latest battleground for global tech giants to push back against governments seeking to limit their dominance.

The fight over the future of digital news is in Canada
The Online Intelligence Act, passed by Prime Minister Justin Trudeau’s government last month, requires companies including Meta Platforms Inc. and Google Alphabet Inc. negotiated commercial agreements with local news organizations to feature news on their platforms. It’s meant to help marketers whose ad revenue has been decimated in the digital age.

But the strong backlash from tech firms — including Meta’s plan to permanently end the availability of Facebook and Instagram news in Canada and Google’s plan to remove links to Canadian news — is more than just a reaction to the law itself. The platforms may see this as a precedent for jurisdictions from California to Indonesia to try to force them to pay for messages.

“It’s a proxy fight for them,” said Jason Kint, executive director of Digital Content Next, a New York-based trade association representing media companies including News Corp., Politico and Bloomberg. “Whatever they’re doing in Canada, they’re probably doing it more for their public policy interests in the US, UK and elsewhere.”

California’s Journalism Preservation Act has advanced to the Senate in Meta’s home state, where the company has also threatened to pull news content. Other countries are also talking about legislation to regulate news and technology platforms, including Indonesia’s Publishers’ Rights Regulation, Brazil’s Fake News Act and the UK’s Digital Competition Act.

Deletion isn’t just a threat. Meta briefly blocked news in Australia in response to that country’s media bargaining code, the model for the Canadian bill. Alphabet shut down Google News in Spain for nearly eight years after passing a law requiring news aggregators to pay publishers; it reinstated the service last year after updating copyright laws.

The Canadian legislation poses a big threat to tech firms because it’s “closer to home,” Kint said.

So far, Trudeau has stood firm. This week he attacked Meta by suspending government advertising on Facebook and Instagram. But the hostile actions between Silicon Valley and Ottawa have also highlighted key criticisms of the law. If power players like Google and Facebook don’t link to news sites in Canada, the biggest losers could be the innovative news startups that rely on them to reach new audiences.

“It’s an existential risk. It feels like a bomb has just been placed at the center of our business models,” said Jeanette Ageson, publisher of The Tyee, a British Columbia-based news website. “Smaller digital players would be disproportionately affected by the news block because we don’t have the brand recognition that larger news brands do.”

Some of the bill’s biggest supporters are veteran newspaper publishers.

A possible news ban on the platforms has already led to a suspension of all new hiring and community launches at Village Media Inc., an Ontario-based digital publisher that has dozens of websites, employs nearly 100 journalists and says its mission is to “save.” local news”. About 18% of Village Media traffic comes from Facebook and about 32% from Google platforms.

“Pulling news would have a devastating impact on the entire sector, especially digital publishers like us who are growing,” said Jeff Elgie, CEO of Village Media. If the platform’s news block becomes permanent, “I would no longer see a viable and investable business.”

Bloomberg News also uses social media and search platforms to distribute content.

Meta and Alphabet have argued that they would be unfairly forced to pay for content that has little or no economic value to them — and that news publishers already benefit by getting web traffic through their platforms that generates advertising and subscription revenue.

Meta experimented with paying publishers directly for journalism, but changed strategy to focus more on short-form video entertainment and less on news. With regulatory pressures around the world, CEO Mark Zuckerberg no longer believes investing in news is worth the trouble, according to a person familiar with the matter. Posts with links to news articles make up less than 3% of what people see in their Facebook feed, according to the company.

While the enforceability of Canadian law is now in question, given the threats from the platforms, one more thing is clear: If a compromise can be reached that allows news companies to accept payments from Meta and Google, it could help stop, or at least slow, the decline of Canada’s media sector. which closed 450 stores between 2008 and 2021.

Australia’s Media Bargaining Code has led to “massive changes”, with more than A$200 million a year being collected from the legislation, according to Rod Sims, an Australian National University professor and former chairman of the Australian Competition and Consumer Commission, the agency that drafted the draft. Sims said newsrooms have expanded, journalism jobs have increased and “anecdotally, many journalists have said there’s never been a better time to be a journalist”.

But Canada has opened up an opportunity for tech giants to set new expectations for other governments hoping for similar results to Australia’s, said Michael Geist, a University of Ottawa law professor who opposes Trudeau’s bill.

“Everybody’s always talking about Australia, and because these trends exist all over the world, they can safely say, ‘We want people to think of the example of Canada’.”

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