Google Caves In Canada: Agrees To Pay $100m News Bribe To Avoid Direct Link Tax
from the the-only-principle-is-money dept
It seems that every other day or so we get another story of big tech companies tossing principles out the window and caving to ridiculous government demands. The latest is Google, yet again, which has cut a deal with the Canadian government to bribe news orgs with $100 million to pay them off to avoid a more specific link tax. It’s the worst kind of corruption.
As we had detailed, almost everything about the Canadian Online News Act (C-18) was a corrupt monstrosity. Link taxes, themselves, are a fundamentally bad idea, that do real harm to both the open internet and the media.
I’ve seen lots of people on both sides “claiming victory” here. The Canadian government is claiming victory because they got the corporate welfare program they wanted, forcing Google to hand cash over to news organizations (the same news organizations that endorse politicians). Google and some of its supporters are claiming victory, because the structure of the deal more or less ignores the actual Online News Act for a side agreement that says “Google gives $100 million in exchange for Canada ignoring the actual law they passed.”
That is, the agreement is that Google forks over this money (close to half of what the government had claimed the company “owed” news orgs) and doesn’t have to negotiate with different news orgs, but with a single party that will distribute the money to news orgs.
Of course, we know how that setup works, because we’ve seen it before in other industries, like the music industry, and it always ends up a corrupt mess. The big news orgs will get some cash via this program, and be forever compromised in their coverage of Google. The smaller news orgs will get shafted. Down in Australia, which has a similar setup, despite the grand promises of everyone involved, smaller news orgs have suffered.
Michael Geist points out that this deal is more or less what Google had offered pre-C-18, but which the government had rejected. Further, he notes that this money will simply replace money that Google had already been giving to Canadian news orgs through other programs like Google Showcase.
Either way, while the deal isn’t a complete victory for the Canadian government, it’s still a loss to the open internet. As with Australia’s News Bargaining Code (and a similar deal by Google and Meta there), it only serves to inspire other countries to pass similar “bribe us too!” laws.
And anyone who thinks this is going to stop at news providers is not paying attention. Others are going to start demanding free cash from successful tech companies via government lobbying. Why wouldn’t you?
I had hoped that Google would actually stand by its principles on this one, but increasingly we’ve seen that Google has no problem compromising on those principles to cut deals with governments. Meta, for now, is still standing strong, but it caved in Australia and it’s probably only a matter of time until it caves here too.
Filed Under: canada, journalism, link tax
Companies: google
Comments on “Google Caves In Canada: Agrees To Pay $100m News Bribe To Avoid Direct Link Tax”
Meta seems pretty committed to blocking news posts in jurisdictions that institute these mandated payments schemes. Besides the fact that they are right that the news companies get more value from massive free distribution on Meta platforms than Meta gets from the news content, maybe Meta leadership sees even “free” news as free like a puppy. It causes bunches of headaches and user angst.
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Australia
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From the article:
Any predictions as to which will be the next industry demanding the geld, as giving in to blackmail only encourages more blackmail?
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“geld” means “castrate” in addition to “money”.
Just sayin’.
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Which the copyright cartels would like to do to Google.
Google:
Don’t Be EvilDon’t Be PrincipledOh noes, not the briar patch...
And this is why publishers keep pushing the likes of link taxes across the globe: Because it works.
They know these days that all they have to do is keep the pressure on long enough and eventually Google will fold and pay out, no matter what they might have said up until that point, and I expect Meta will follow suit in short order now that Google caved and the parasites have that to point to.
Of course why Google keeps folding would certainly explain it, sure they’re paying out a bunch of money but for a company their size it’s barely even pocket-change and in exchange the laws are devastating to any site and/or service that might have competed with them, making it an excellent deal for them no matter how much they might publicly ‘object’.
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Seems the law does not apply to any service outside of Facebook and Google not sure tho.
Re: Re: 'Google and Meta are paying to support the news, now it's your turn'
Seems the law does not apply to any service outside of Facebook and Google
To which I would respond with: ‘Yet’.
Re: I suppose this was inevitable...
Politicians are a lot more dependent on the good will of media/news outlets, than they are on the good will of Google.
"victory" "caved"
The only ones victorious in Canada, or Australia, or any of the other countries that have attempted this (a few in Europe did, and there was a lull before Australia popped up on the scene) has been Google and Facebook!
Like you said, Google now pays less than they did before and via an organization that will most likely take a cut leaving even less for Canadian news – ultimately guaranteeing only the biggest newspaper’s shareholders will see any of this money.
In Australia Google and FB both got exemptions from the law so if anyone there caved it was the government. And with the two biggest players having exemptions there really isn’t anyone else to apply the law to!
I still don’t understand why these companies can’t just pay their taxes in each country where they operate and the local citizens can decide how it’s spent – whether that’s journalism, healthcare, education, social services, etc.
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But what this and the statement that they’re doing it “To Avoid Direct Link Tax” are missing is that this deal is specific to Google. It’s optimistic to say they’re doing it to save money or avoid dealing with hundreds of news companies. A more cynical person might say they’re doing it to forstall competition. Google’s competitors, after all, don’t get this deal; they have to follow the actual law (which basically says nothing except “you have to negotiate with every news site whose content you ‘make available’, whatever that means”).
In other words, Google are not “caving”; they’re “pulling up the ladder behind them”, being anti-competitive in a way that no court could ever convict them for.
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That’s… not true. The Online News Act is very explicit in saying that a platform has to have a particular bargaining imbalance with news organizations (I know, it’s nonsense, but that’s how it’s worded). The government was very clear that the law only applies to Google and Facebook. This under the reasoning that the other players are far too small to be scoped into the law. DuckDuckGo? Mastodon? Heck, even Apple News? The Online News Act doesn’t apply as of right now.
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Hmm. Alright, that’s not quite as bad, but would still seem to impede growth. Were I starting a news aggregator or investing in one, I’d make sure to avoid any Canadian legal “nexus”. No employees in Canada, no servers, etc.
So, Canada would seem to be killing the market for domestic news aggregators, at least. Yeah, the multinationals that are already in Canada can’t avoid the law so easily, but any future competitors will be based elsewhere. Maybe not the E.U., ’cause they’re always talking about that sort of thing too. Probably the USA, which is exactly what Canadian governments are always worried about (with “Canadian Content” requirements, for example).
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It does limit how much one can grow a business in either social media (minus possibly a decentralized platform of course), news aggregators, and search engines. I guess the rule is this: don’t build a search engine or aggregator that ends up being as big as Google or don’t build a social media platform that could grow to be as big as Facebook. Admittedly, this leaves things pretty wide open still. You are correct, though, it does limit how successful you can be before you get roped into this really stupid law.
In terms of where the platforms in question are located, it doesn’t really appear to matter. Both Google and Facebook is American based and that didn’t really help their cause (in fact, it only added motivation by Canadian lawmakers to target them). The thing is, both platforms could’ve theoretically blocked all of Canada and dusted their hands of this backwards law once and for all. In theory, a new entrant would have that option on the table as well.
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“As big as Google or Facebook” isn’t the actual legal standard, is it? Is there even a specific number? You wrote “bargaining imbalance” earlier, and with news companies dying I think any aggregator will aspire to be bigger than most of them.
They’re multi-national. They’ve both got Canadian employees, offices, sales…; they’re advertising in Canada, and accepting Canadian dollars for products and advertising. If not for all that stuff, Google could just say they’re not gonna deal with Canada, and what could a court do? Probably all the then-unusable Gmail accounts would make Canadians push to repeal the law.
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I still don’t understand why these companies can’t just pay their taxes in each country where they operate and the local citizens can decide how it’s spent – whether that’s journalism, healthcare, education, social services, etc.
They do(though like all major companies I’m sure not as much as they should be), link taxes however are an entirely different thing in that they’re the government simultaneously telling them ‘If you do X you have to pay’ and ‘You’re not allowed to not do X’.
Imagine if you will a situation where you benefit from the local park in your town and as such you take it upon yourself to clean it up in your free time, making it a better experience for you and everyone else. Now imagine the city government approached you and claimed that because you’re benefiting from the improved park you have to pay them money for cleaning it, and when you object and respond by saying that you’ll just stop cleaning it they label you a thief and publicly accuse you of wanting to ruin things for everyone, threatening if not actually passing a law that says you have to keep cleaning the park and pay for the privilege of doing so or else face steep penalties.
That is basically link taxes in a nutshell. ‘You were doing something for free that benefited both sides, but the other side wants to be paid on top of the benefit they already got from your actions so give them money and keep providing them the same benefit or else’.
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a really helpful analogy, except where does the face that Google and Facebook make so much money from advertising fit in?
does the guy who cleans the park for free also get to use the park benches for free to advertise his main cleaning/landscape business??
Re: Re: Re: Shop smart. Shop S-Mart
Yeah I realized after the fact that it would have been better phrased.
A perhaps better analogy would be someone runs a store(Let’s call it ‘S-Mart’) selling their own stuff and in the course of doing business they become knows as the place you go to get directions.
Want to know where the best burger place is? Go to S-Mart and ask.
Want to know where the local auto-shop is? Go to S-Mart and they’ll tell you.
And of course since people are already at S-Mart asking for directions they’re more likely to buy something while they’re there, making them money even as they increase the number of customers the other stores are making by sending people their way.
This works great for a while right up until the other stores see how well S-Mart is doing and demand that since people are asking about their stores that means they should not just keep getting people pointed their way but also get a cut of S-Mart’s profits as well, even going to so far as to convince the local government that S-Mart must keep giving directions and pay for doing so.
Now everyone will want to visit the Google Caves.
They could block Canadian ip addresses but that is easily bypassed with with proxies, Tor or VPN
There is no law in Canada, Mexico, or the United States making it illegal to bypass ip filtering.
When I take road trips to Mexico and use VPN to access my iheart of YouTube playlists when I am driving down there I am not breaking any laws in Mexico or the United States doing that.
Also. America. Law does not apply in
Mexico.so so I could not be prosecuted on the USA for what I do in Mexico even if it were illegal for n America
American law has no jurisdiction in Mexico
http-referer
And people wonder why I obfuscate links.
The link-tax collector can not charge anyone if they do not know where the reader found the link.
hXXps://www.theglobeandmail.com/podcasts/the-decibel/article-what-googles-deal-with-canada-means-for-the-rest-of-the-world/
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None of this works the way you apparently think it does.
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No? So how do you think it really works besides threat of lawsuit?
I am thinking ahead.
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While often called a “link tax”, the law doesn’t mention linking at all. Even talking about the story could be found to be “making available”, if the courts accept that view and consider it compatible with free speech. That’s one of the reasons why it’s a bad law.
Anyway, the news people trying to collect under this law could just get aggregator accounts themselves and see if their story shows up. As links, excerpts, references, screenshots, or anything else. It doesn’t matter whether anyone else found them that way.
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Well, by mentioning link, you helped make my point.
Do you really think a news organization is going to spend the money on human staff going out on the internet looking for references to an article they published?
Government Caved to Google
You have to take an extremely purist standpoint to describe this as Google caving to the government on this matter. All signs point to the exact opposite.
Google was always open with the idea of offering financial benefits to news publishers in the first place and had originally asked for a simple fund model. That’s… not a bad thing since it’s all voluntary. In this deal, Google got… exactly what they wanted in the first place: a fund model where they pay into a fixed fund, indexed for inflation, and the media sector figures out after who gets what after.
Yes, a fund model isn’t perfect. The largest news players hoovers up a lions share of the money while smaller players get either crumbs or nothing. The CBC is set to get $33 million out of the $100 million, so I’m not thrilled that they are getting further propped up over top of all the government subsidies they get. Still, money is only a band-aid solution to the sector that is failing in the first place. It’s nowhere near the $1 billion price tag they need to find financial stability.
The only way you can say “Google Caved” is that any deal was ever reached at all is just them caving. Since smaller search engines and social media platforms are exempt from the Online News Act (unless the Canadian government suddenly goes rogue and randomly decides that all platforms are suddenly scoped into the Online News Act), any market distortion introduced is going to be, at worst, extremely limited.
Sorry Mike, but I’ve read through your arguments, but in the context of the Online News Act, they’re not really convincing me at this point.
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Then we pray that the Canadian Courts do NOT rule as such.
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I’m curious about this. If the CBC is now getting $33 million from Google, can anyone say that they are unbiased about Google going forward? Won’t it be in the CBC’s interest not to do any serious investigations into Google, seeing as that will cut into their bottom line?
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This is a perfectly valid point to make. It might not quite apply as much to the CBC that already gets over a billion dollars in government subsidies already, but other large news organizations are hoping that their full time employees are going to have 35% of their salaries/expenses paid for by Google.
This opens up a huge question over whether or not those news organizations could ever truly be independent. Of course, the large news organizations throwing journalistic integrity straight out the window for the sole purpose of shilling for the Online News Act really didn’t help their cause on this front. Journalistic independence from the larger Canadian entities is, as far as I’m concerned, under serious doubt. It compels readers to ask if the coverage they are reading/watching/listening to is the result of their financial interest or actually independent journalism. When it comes to matters surrounding Google, I’m not sure I would trust the coverage once those paychecks start rolling in.
Corruption
Leading multi-national companies like Google are meant to set an example, and they have. Such a disgrace.
Google should take the x route, you want access to our platform then pay 10k a month
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As much as I cringe at the idea of anyone taking business tips from Twitter these days in this particular case that would have been a fitting response. If any benefit derived from another must be paid for and both sides benefited from the act of providing links then the publishers should have been paying to appear on Google/Meta just as much if not more than Google/Meta should be paying to link to them.
Mike, please do a podcast update on this!
Really hoping Mike will do an update episode of his podcast about this development, and bring on Michael Geist as well as Jesse Brown from Canadaland – no one has thier finger on the pulse of how this issue is affecting smaller Canadian media companies better than Jesse!!
You are A CLOWN