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.