Canadian Gov’t Latest To Decide US Tech Companies Should Be Punished For Sending Web Traffic To Canadian Websites

from the demanding-food-while-biting-the-hand-that-feeds-it dept

Here we go again. It’s a plan that almost never works but one that legislators and the special interest groups pushing for it continue to believe will shower them with untold riches from billion dollar tech companies that they blame for the destruction of local content creation.

I mean, they’re not entirely wrong… at least in terms of some uncomfortable facts. Local journalism is dying. Some platforms have pushed for adoption of their protocols (looking at you, Facebook) that ultimately result in little more than the platform’s consolidation of power.

But large tech companies aren’t killing local journalism. Lots of entities assumed printing news on paper once a day would be all people needed to stay abreast of current news. Once it became apparent people were moving on to other platforms and services, news agencies reacted. By that time, it was too late. Thousands of sources for news replaced “the only news game in town” as well as the assumption that news only needed to be delivered once a day.

Cable news networks broadcasting 24 hours a day started this landslide. The arrival of Google, Facebook, Twitter, and others only cemented the demise of news agencies that believed people would be satisfied with a product that contained an outsized percentage of ads and copy-pasted articles from national news services.

Local news agencies could have opted for a more focused product that engaged directly with readers. Instead, agencies outsourced reader engagement to Facebook and increased uptake of ads and third party content generated by national news sources.

In response, many governments and the vocal special interests they’ve opted to speak for have decided it’s not their fault for responding poorly to this massive shift to internet news sources. Rather than accept the fact they responded poorly, they’ve decided the road to financial solvency runs through the pockets of tech companies that were never in the news business to begin with.

Canadian legislators are the latest to engage in counterproductive lawmaking. It’s only a proposal at this point but, if passed, will subject Canadian concerns to an all-American brush off.

The Canadian government this week introduced a law bill that would force the likes of Google and Facebook to pay Canadian news publishers for using their articles online.

The Online News Act was created to address what Canadian Heritage Minister Pablo Rodriguez described as a crisis in the country’s media sector that has resulted in 451 outlets disappearing between 2008 and 2015. “We want to make sure that news outlets and journalists receive fair compensation for their work. We want to make sure that local independent news thrives in our country,” Rodriguez said in a press statement

Specifically, the proposed law seeks to ensure journalists and publishers get a fair cut of the revenues Big Tech banks from aggregating, distributing, sharing, or summarizing stories; the exact arrangements have yet to be hammered out.

Let me just “hammer this out” for you. Do you really want to know how this will work, Canadian legislators and news agencies? Let me demonstrate using this imaginary conversation that it also a fairly recognizable meme:

Canadian gov’t/news agencies: If you want to link to Canadian content, you’ll need to pay us.

US tech companies: Fine, we won’t link to Canadian content.

Gov’t and news agencies: no not like that

This chain of events has occurred repeatedly. And yet, entities like these think it will somehow be different this time.

Tech companies aren’t going to pay for indexing content. Even if you firmly believe companies are morally obligated to pay news sources for sending traffic their way, there’s nothing that actually justifies companies paying to send traffic to others. Even if you firmly believe Google, et al deliberately killed local journalism and desecrated its corpse, simple math shows soaking tech companies won’t return flailing news agencies to solvency, much less to historical levels of profitability predicated on being the only game in town.

The only thing preventing Google, Facebook, etc. from performing a cut-and-run is optics. If these companies determine it’s ultimately more profitable to leak revenue to appease regulators, they will do so. But that determination is largely dependent on how much governments enacting laws like this will demand.

A similar law passed in Australia (one said to directly inspire this Canadian effort) hasn’t resulted in a mass exodus… yet.

When Facebook heard of Australia’s plans, it blocked the ability of users to share any Australian news articles on its social network before agreeing to un-ban the content and enter a peace pact with the government.

Google, meanwhile, said it would pull its search engine out of Australia if forced to pay for news, though has since invested nearly $1 billion dollars to expand staffing and grow its cloud operations in the country.

Australia’s bill passed and went into effect on March 2, 2021, and neither Facebook nor Google have left Down Under.

This sounds like a battle regulators might win. But look closer at the details. Google remains active in Australia and has actually invested more money (in questionable news purveyors), possibly indicating nothing more that it believes adhering to these regulations will keep less well-funded companies from cutting into its market share. And Facebook deployed the nuclear option before regulators were forced to address Facebook’s concerns.

If Canada wants to roll the dice on obligated engagement, it can. But it should probably take a closer look at those demanding to be paid for failing to make the most of increased engagement before deciding the only way forward is to punish other companies for their success.

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Companies: facebook, google

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Comments on “Canadian Gov’t Latest To Decide US Tech Companies Should Be Punished For Sending Web Traffic To Canadian Websites”

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This comment has been deemed insightful by the community.
Anonymous Coward says:

Isn’t this like handing US big tech your weaknesses on a silver platter, with a note that says “extort me!”?

This is basically saying: “you are an important resource, and we want to extract more from you”.

Google or Facebook could turn around and say “Ok, lets pay a -3% tax (that is Canadian companies have to pay us for the privileged of having links)”.

Of course I don’t they’d bother. Too much bridge burning, and bad PR.
But it also certainly doesn’t seem like a non-stupid legislation to propose

Anonymous Coward says:

The money would never make it to those who were impacted, but it would make big corporations wealthier. Nothing is going to bring back local journalism except people who are fed up with the cow manure spouted by Fox Not-One-Iota-of-News. Most of the adults in this country have been too dumbed-down to understand the news if it were available to them.

This comment has been deemed insightful by the community.
Darkness Of Course (profile) says:

Re: Re: Others

Germany a time or two, France as well. Google x’d the German snippets, they whined.
Google x’d Germany all together, wait! Not like that!
Murdock et al gave Google a royalty free license to use their stuff, magically the complaints about not getting traffic went away.

Spain is the most significant, because the law was crafted such that news organizations could not give google a royalty free license to their feed. Google left Spain. It, as I heard it, trashed many of the smaller local news agencies. Those that had depended on Google for traffic.

PaulT (profile) says:

Re: Re: Re:

“Google left Spain. It, as I heard it, trashed many of the smaller local news agencies. Those that had depended on Google for traffic.”

True, but it’s worth clarifying that this was only the Google News service. Other Google services are in Spain. Smaller news services suffered from lower traffic, but thankfully despite the claims of the major corporate sources, Google are not the sole provider.

nasch (profile) says:

Re: Re: Re:2

The question you were answering was “what other governments have decided US tech companies should be punished for sending web traffic to Canadian websites?” and you answered “Spain” (and someone else said Germany and France). The question was intended to point out that the headline isn’t quite right since no other governments besides Canada’s have tried to punish US tech companies for sending web traffic to Canadian websites. Instead of “Canadian” it should be something like “domestic” or “their country’s”.

Darkness Of Course (profile) says:

Re: News twice a day

Ah, no. That has nothing to do with our current dearth of news providers, local in particular.

First, we will be loath to forget Craig’s List. There were others, nickle ads and such. But Craig gutted the local paper’s cash cow of very high priced personal ads.

The the web showed up. Since at least 2015 the ad business has been blocking ‘bad news’ to ‘protect the brand’ of various companies.

No LBGTQ+, no murder, nothing controversial in nature, no insurrection, no police brutality, and the list goes on. So, anyone covering that got their ads blocked, and their funding cut. There is also a corp that is buying up local newspapers, gutting them, and converting them to copy GQP talking points. Much like Sinclair Broadcasting does in local TV News space.

PaulT (profile) says:

Re: Re:

“First, we will be loath to forget Craig’s List. There were others, nickle ads and such. But Craig gutted the local paper’s cash cow of very high priced personal ads.”

While important, Craigslist were an example of the problem, not the sole problem. Newspapers used to depend on ads, classified, personals and other things to drive down the cover price, which they used to factor in the fact that people other than the person who paid for it would read it to set their prices. Many different services started to drive attention away from them, eBay and online dating sites probably caused as much damager before Craigslist came along, and arguably that site did nothing to detract readership from people don’t live in major cities, and even now free newspapers still exist and make a living.

I’m not sure of the situation in the US, but from my vantage point there’s still plenty of opportunity for business, it’s just not viable on the old terms. It’s like the music business model – it’s still a vibrant business, but the old model of forcing people to buy a $20 album to access a couple of tracks is long gone.

Anonymous Coward says:

The problem is google may make a deal with big Canadian publishers while ignoring small local news websites in Canada , I think it’s a bad idea to be asking Google or Facebook to pay to display a link , it would be sad if bloggers or forum users could no longer post a link to a news website without asking for permission. If people search for news they expert their local or national newspapers to be displayed eg news relevant to where they live

That One Guy (profile) says:


Might want to reread the article, that’s what they used to do but when Australia pulled that stunt while both of them blustered about pulling service both of them are still operating and one would assume paying out in the country.

Whether it’s due to short-sighted execs not realizing that paying out once means everyone is going to be demanding their pound of flesh or a realization that while they can afford the prices smaller competitors will likely be bankrupted it seems the tactics have shifted from ‘refusal to pay, no negotiations’ to ‘throw a fit and then pay anyway’.

That One Guy (profile) says:

'Teach that bridge to support my car as I drive on it...'

News agencies struggling for traffic, getting a good chunk of it from other companies and the first thought is to charge those companies for providing that free traffic…

They’d better hope Google and other companies don’t go back to their previous ‘No, we’re not paying you’ tactic because otherwise they are screwed if this goes into effect and likely to see their traffic plummet and already struggling financial positions take a dive as a result.

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