Link Taxes Backfire: Canadian News Outlets Lose Out, Meta Unscathed
from the what-a-surprise dept
As California (and possibly Congress) are, again, revisiting instituting link taxes in the US, it’s worth highlighting that our prediction about the Canadian link tax has now been shown to be correct. It didn’t harm Meta one bit to remove news.
The entire premise behind these link taxes/bargaining codes is that social media gets “so much free value” from news orgs, that they must pay up. Indeed, a ridiculously bad study that came out last fall, and was widely passed around, that argued that Google and Meta had stripped $14 billion worth of value from news orgs and should offer to pay up that amount.
$14 billion. With a “b.”
No one, who understands anything, believes that’s true. Again, social media is not taking value away from news orgs. It’s giving them free distribution and free circulation, things that, historically, cost media organizations a ton of money.
But, now a study, in Canada is proving that social media companies get basically zero value from news links. Meta, somewhat famously, blocked links to news in Canada in response to that country’s link tax. This sent many observers into a tizzy, claiming that it was somehow both unfair for Meta to link to news orgs AND to not link to news orgs.
Yes, media organizations are struggling. Yes, the problems facing the news industry are incredibly important to solve to help protect democracy. Yes, we should be thinking and talking about creative solutions for funding.
But, taxing links to force internet companies to pay media companies is simply a terrible solution.
Thanks to Meta , not giving in to Canada and blocking links to news, we now have some data on what happens when a link tax approach is put in place. Some new research from McGill University and the University of Toronto has found that Meta didn’t lose very much engagement from a lack of news links. But media orgs lost out big time.
Laura Hazard Owen has a good summary at Nieman Lab.
“We expected the disappearance of news on Meta platforms to have caused a major shock to the Canadian information ecosystem,” the paper’s authors — Sara Parker, Saewon Park, Zeynep Pehlivan, Alexei Abrahams, Mika Desblancs, Taylor Owen, Jennie Phillips, and Aengus Bridgman — write. But the shock appears to have been one-sided. While “the ban has significantly impacted Canadian news outlets,” the authors write, “Meta has deprived users of the affordance of news sharing without suffering any loss in engagement of their user base.”
What the researchers found is that users are still using Meta platforms just as much, and still getting news from those platforms. They’re just no longer following links back to the sources. This has done particular harm to smaller local news organizations:
This remarkable stability in Meta platform users’ continued use of the platforms for politics and current affairs anticipates the findings from the detailed investigation into engagement and posting behaviour of Canadians. We find that the ban has significantly impacted Canadian news outlets but had little impact on Canadian user behaviour. Consistent with the ban’s goal, we find a precipitous decline in engagement with Canadian news and consequently the posting of news content by Canadian news outlets. The effect is particularly acute for local news outlets, while some news outlets with national or international scope have been able to make a partial recovery after a few months. Additionally, posting by and engagement with alternative sources of information about Canadian current affairs appears unmoved by the ban. We further find that Groups focused on Canadian politics enjoy the same frequency of posting and diversity of engagement after the ban as before. While link sharing declines, we document a complementary uptick in the sharing of screenshots of Canadian news in a sample of these political Groups, and confirm by reviewing a number of such posts where users deliberately circumvented the link-sharing ban by posting screenshots. Although the screenshots do not compensate for the total loss of link sharing, the screenshots themselves garner the same total amount of engagement as news links previously had.
I feel like I need to keep pointing this out, but: when you tax something, you get less of it. Canada has decided to tax news links, so they get fewer news links. But users still want to talk about news, so they’re replacing the links with screenshots and discussions. And it’s pretty impressive how quickly users switched over:
Meaning the only one losing out here are the news publishers themselves who claimed to have wanted this law so badly.
The impact on Canadian news orgs appears to be quite dramatic:
But the activity on Meta platform groups dedicated to news doesn’t seem to have changed that much:
If “news links” were so valuable to Meta, then, um, wouldn’t that have declined once Meta blocked links?
One somewhat incredible finding in the paper is that “misinformation” links also declined after Meta banned news links:
Surprisingly, the number of misinformation links in political and local community Groups decreased after the ban.
Political Groups:
- Prior to the ban: 2.8% of links (5612 out of 198,587 links) were misinformation links
- After the ban: 1.4% of links (5306 out of 379,202 links) were misinformation links
Though the paper admits that this could just be a function of users recognizing they can’t share links.
This is still quite early research, but it is notable, especially given that the US continues to push for this kind of law as well. Maybe, just maybe, we should take a step back and recognize that taxing links is not helpful for news orgs and misunderstands the overall issue.
It’s becoming increasingly clear that the approach taken by Canada and other countries to force platforms like Meta to pay for news links is misguided and counterproductive. These laws are reducing the reach and engagement of news organizations while doing little to address the underlying challenges facing the industry. Instead of helping news organizations, these laws are having the opposite effect. Policymakers need to take a more nuanced and evidence-based approach that recognizes the complex dynamics of the online news ecosystem.
Filed Under: c-18, canada, link tax, link taxes, news links
Companies: meta
Comments on “Link Taxes Backfire: Canadian News Outlets Lose Out, Meta Unscathed”
It seems pretty obvious that local/small news organizations has the more to loose, given that social networks are the more effective tool and the cheapest one to reach local community, by targeting or between users by reposting, they are also not organizations that fill whole user timelines so there is nearly no interest from users to check theses organization website every five minutes.
As for big ones, I’m not worry that they would get some government money to balance the visibility losses, by threatening to sack some journalists if needed.
It is always easier to blame the outside force when you’re just inept.
See also:
Parents
Congress
Reporting
Music
Movies
Moral Panic Mobs
That running line of mine about how humans keep doing the same things over & over pretending that despite it failing this time, this time it will work.
If they spent as much time coming up with new ways to raise revenue for the media outlets as they put into trying to remix the same link tax concept that has failed over, and over, and over, and over, and over they’d have something.
But it is so much easier to scream that they stole all of the money they are no longer making by… sending them more traffic. o_O
Maybe if they hadn’t embraced the pivot to video or the worst of the worst advertising models they could have done better, but instead they sacrificed everything chasing pennies while still trying to sell us the horse drawn buggy of yesteryear.
Re:
And since when are parents not to blame when they parent badly (allowing the Internet to act as a babysitter), Congress not to blame when it passes bad bills, and moral panic mobs not to blame when they incite hate crimes? Hmm?
This is not surprising. The same happened in Spain when they decided on a Google tax. There it crippled local search engines and local news organizations in the same way while only having limited effect on the big international players.
There is a reason that Spain repealed that bit of idiocy.
Given the context, it’s worth pointing out that it was 14 billion American dollars—which would be 19 billion Canadian dollars, were the number anything other than bullshit—and the supposed amount was in relation to U.S. publishers only.
And a lot of these publishers would do their “dialogue” engagement on platforms like FB and The Platform Formerly Known As Twitter if they did that at all. (And didn’t yell at their reporters when they did.)
Second verse, same as the first
Anyone who paid attention to when Spain did the same thing could have called this.
The online company(search that time, social media this time), doesn’t suffer more than a minuscule bump because it turns out they were telling the truth when they said that linking to news just isn’t that important or valuable to them.
Meanwhile publishers get absolutely demolished, with smaller ones suffering the most and even the larger ones seeing a notable hit to their traffic because as it turns out they weren’t telling the truth when they complained that search engines/social media was stealing all their content and providing nothing in return.
Sadly this is still a win-win tactic for the major publishers because no matter what the end result is they still benefit. Either the other side folds and they get free money for nothing, or the other side doesn’t fold and while they see a drop to their traffic the smaller publishers that were competing with them are gutted, forcing more people to go to the larger publishers for their news.
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Was going to point this out but you beat me to it!
The one upside about the Canadian situation is that there’s now someone else other than the media companies producing actual stats, instead of just the media companies whining about Meta taking their ball and going home.
Re: are you saying
That the NEWS does not pay attention to the NEWS??
What happened ELSE WHERE? When things Similar Were tried and DIED?
Or Even look into the past, and see the SAME happen there also, that the only WAY to be HEARD is to Loud and proud, and a Nazi?
Re: Re:
I really think you need help.
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We have a woke prime minister
All according to plan?
I’m going to assume the likes of the Murdoch media empire calculated this all well in advance before pushing it, based on the short-mid term losses being something their multinational is large enough to weather, in exchange for eradicating the smaller independent holdouts against consolidation.
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Only if you’re only looking at the links themselves and assuming they were the issue. It wasn’t, as has been pointed out before. The value is the content related to the links, not the link itself. Canada’s C-18 explicitly says this, as well.
Under the Bill, a digital news intermediary could make news content available by reproducing it or by facilitating access to the news content, including by generating links to news content. Facilitating access to news content could be done through any means, including by way of an index, aggregation or ranking, all of which are methods used by online platforms to organize and distribute news content. However, the Bill does not automatically or necessarily require digital news intermediaries to compensate news publishers when they make news content or portions of it available, including when digital news intermediaries generate links to news content. Instead, the Bill gives parties the flexibility to bargain over compensation based on the nature of the content and how it is made available by the intermediaries link
It’s very clear it’s not targeting just links. Similarly,
The Bill introduces a new bargaining framework intended to support news businesses to secure fair compensation when their news content is made available by dominant digital news intermediaries and generates economic gain.
Or, if you prefer:
Scope of bargaining process
(2) The bargaining process is limited to matters related to the making available, by the digital news intermediary in question, of news content produced by a news outlet link
As well as:
An arbitration panel must take the following factors into account in making its decision:
(a) the value added, monetary and otherwise, to the news content in question by each party, as assessed in terms of their investments, expenditures and other actions in relation to that content;
(b) the benefits, monetary and otherwise, that each party receives from the content being made available by the digital news intermediary in question; and
(c) the bargaining power imbalance between the news business and the operator of the digital news intermediary in question.
It’s the content, and always has been. If you’re still sharing the content (via an alternative method, like a screenshot), you would not expect a decline. On the other hand, the fact that users workaround it shows that there is indeed some desire to consume news content on the platform. And that also shows you the benefit Facebook gets- they’re staying on Facebook to read the content. Which benefits Facebook.
Some of the latter were also targeted by “link taxes”. Canada’s C-18 doesn’t target just links. Things like screenshots can also play into the collective bargaining that C-18 forces.
You keep describing it as a “link tax”, but it’s actually far broader than that.
From the bill text itself:
(2) For the purposes of this Act, news content is made available if
the news content, or any portion of it, is reproduced
Reproduced. Like a screenshot.
Re: Will discussing the news also be banned?
Good writeup.
Still, I do wonder if there’ll ever be a time when news publishers are going to tax me for annoying my friends with the latest news of the day.
Would that ever count as a “reproduction” of the news? Will discussing the news be banned unless we both have a subscription to the same paper? If I summarize the contents of an article using my own words, does that count as a reproduction of the news?
The idea is obviously absurd, yet at the same time I have learned to never underestimate the power of executives looking to increase profits by extracting every last penny of value. Even if the idea will probably never be enforced in the physical realm, I’m not counting out media executives trying the scheme digitally.
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It’s funny you say that, because some have actually tried that, in the past. It was something that used to be brought up, long before the internet, when people would share newspapers after they finished reading it (or grab 2 from the bin). The only reason it didn’t happen is because they couldn’t really work out a feasible way to do it. They would, if they could. They absolutely hated it.
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No. Reproduction would require some form of direct copying, not simply reading and digesting the news, then later discussing what you remember of it. ‘Copying’ from memory doesn’t seem to be an infringement under Canadian laws.
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Stop quoting the dumb fucking law like it actually means something. It’s a bad law, so the content inside the law is bad support. You can’t use that to justify it’s existence. Circular reasoning isn’t support for your position, it undermines your position. You need to find evidence EXTERNAL to the law to support the claim your making.
The law can say whatever the fuck it want’s about value, but that doesn’t make it true. Further, the fact that a new law was created out of whole cloth to solve this very specific failure of the news media to transition to a new model, shows that it’s protectionism not justice or equity.
When Meta was allowing users to link to sites, they were driving traffic and therefore revenue to the publishers. And you always seem to forget: the ability to do this and content that was posted on Facebook was entirely controlled by the publisher.
But the news media got greedy and wanted to charge a value producing entity for the ‘privilege’ of Facebook handing them customers. They still fail to realize that they can’t treat their customers like shit with things like the abusive ads on virtually every ‘news site’ that exist today, and keep them. And when that approach failed to keep up their bottom line, they decided to fuck their customers again by going after an intermediary for their money. Companies don’t own their customers, and the world of old school media is still hasn’t learned their lesson.
A single screenshot, and possibly two, of a larger story works functionally as a quote. Something that is fair use, and something you continue to ignore because it fundamentally breaks your argument. Fair use is how society shares knowledge. If researchers were forced to license every quote and even citation (without quote) in in a paper (on top of the usurious prices of the journals themselves) we’d stop getting papers published. If reviewers had to do the same for quotes in a movie, or even the title itself (the functional equivalent of a link), reviews would disappear. The list goes on.
The ONLY way to make this law work is to step further down the path of totalitarianism and require Facebook to not only return the links to service, but to pay whatever price the news agencies want. There would be no effective negotiation when one party is a hostage. Further, Facebook would have no control over their flow of cash, it would be easy to manipulate for profit (link farms).
There’s no workable path forward. There’s WAY to many redundant, poor quality, ‘news’ sites to support with this bill or not. A lot, and I mean a lot, would need to go away.
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Re: Re:
Quoting the law means something when you’re making claims about what it actually does. The fact that it’s a dumb law doesn’t mean we should pretend it does something different from what it does.
I’m not trying to justify it. I’m saying you should accurately describe what it does. That doesn’t mean it’s justified, or that it’s a good law. It can be a bad law, and you should still be accurate about it. That is not mutually exlusive.
What’s circular about it?
Sure, look at the fact that Facebook is removing things besides links. link.
For Canadian news outlets this means:
News links and content posted by news publishers and broadcasters in Canada will no longer be viewable by people in Canada.
Absolutely. But when it says it’s not just taxing links, that does mean it’s not just taxing links. You can argue about the why, but it’s objectively true that the law does not just target links.
I’m not forgetting about that. I’m saying there are also parts that weren’t controlled (like say, screen shots). Publishers can control things like links. They can’t control things like screenshots, or quotes. Those things like screenshots matter, and those screenshots were directly talked about and targeted by people pushing this law. They intentionally worded the law to include those sorts of things.
You can argue that’s a bad and stupid thing, but you should at least acknowledge that it’s happening, instead of pretending it’s all about links.
Depends on how much is in the screenshot. And I’m not ignoring fair use. If you quote/screenshot an entire article, that’s not fair use, for instance. (Never minding that fair use is what’s defined in the law to begin with. If CA law says it’s not fair use, it’s legally no longer fair use. Which is dumb, but what counts as fair use is set by law, the law is able to set dumb definitions of fair use)
Absolutely agree, and I’m not arguing otherwise.
That’s part of why I’m making this point. Yes, in order to actually make the law work, means they’re going to have to go after other things besides links (and they already have). It’s worth recognizing that, instead of pretending like they’re only going to go after links and call it a day. They’re not.
If it were just about links, there’d be no reason to escalate. But it isn’t, and it was very clear from the get go.
That wouldn’t be a step further down the path, but only because they already took that step. The CA law already forces collective bargaining. They already have to pay whatever the news agencies want, (subject to binding arbitration).
The thing you’re worried they might do, they’re already doing. And that’s precisely why it’s important to be accurate about it. Because if Mike’s article mentioned it, you’d know they’re already doing those sorts of things.
Re:
I suggest to be a bit less gullible and actually think for yourself.
Just the initial claims should have resulted in your rolling on the floor laughing that they dare to claim that this isn’t a link tax when citing actions that on the internet effectively always involve linking and can only be effectively taxed thanks to the linking.
That is obviously something the lobbyists that wrote the bill put in there to be able to make the claim you made to people who don’t know better.
Then the claim that this is voluntary. Well yeah that is technically not a lie since the publishers can voluntarily decide to demand money from people linking to them. Whoever links cannot then voluntarily decide not to pay.
Arbitration, well there is a reason that a lot of corporations in the US put that in as mandatory since the entity that gets to setup the panel is generally speaking the one that wins the arbitration.
This isn’t helped by the fact that the reasoning for the arbitration is explicitly stated as determining how much entities linking have to pay the publishers.
And then the absolute denial of what was written in the article you are responding to.
Not linking has basically had no effect on how long people stay on Facebook. The article also shows that the publishers massively benefited from having their articles on Facebook.
Funnily enough the law in question only allows transfer of money from linkers to publishers since the real world data shows the publishers should be paying the linkers.
And then again an attempt at wordplay to deny something that even most backers of this law admit, that it is a link tax.
You know why it is a link tax? That doesn’t cost any effort since getting referred to someone else on the internet most of the time comes with data on that it is a referral. Makes it cheap to tally compared to the fractions of a cent that the publishers can get from getting the linker to pay. Anything that doesn’t link requires an expensive setup that would generate no income. Why? Well in the case of Facebook the link tax can be extorted from Facebook even if it is not Facebook that put up the link but a user did, else said one target with deep pockets. That screenshot? Well they first have to track it down, which fails if it is in a private group or sent privately between people (oh no money lost that a link would have tracked). So you get it in a public group, now you need to track down the poster, now you need to guesstimate the number of unique views, and then send the poster a check demanding 0.2 cents since the screenshot got viewed 2000 times. Oh and you need to keep doing that from time to time since it might have gotten more views where that is automatic if you can just track referrals.
As to why you need to go to the poster. It is not put there by Facebook so you cannot sustain a claim that Facebook would need to pay for it.
So yes this is a link tax since then the publishers don’t have to put in a lot of effort while they can pretend it is the linkers that are doing the access instead of the people putting up the links on for example a Facebook page and aggregate those fractions of a cent to something that actually make them money.
Re: Re:
The link to Canada’s law is not working right now, but my recollection is that it’s not a link tax despite everyone calling it such. Organizations who post a URL without linking it would also be affected, as would those who quote a story without providing an address at all (link or otherwise). And unlike real taxes, there’s also no set rate, but just some vague thing like “if you’re big enough and ‘provide access’ [or some such that’s never really defined], you have to negotiate with every registered news provider”.
Calling it a link tax really under-states how much of a shit show this is.
Re: Re: Re:
I think the point is that there is no money in determining those types of situations. Organizations would have to spend more time and resources tracking down those non-links, analyzing them, and determining the value. The resources expended would be greater than the payout.
So instead, they will just do the easy thing, which is to track referrers from link traffic sent to them because that is cheap and easy. Yes, technically not a link tax, but functionally and technologically a link tax.
Re: Re: Re:2
Why not do the MAFIAA thing and hire companies to start making automated claims for everything remotely referencing “their” stuff? Forget about accuracy and manual verification, and much of the cost goes away; just fire off legal threats all day long till Facebook et al. cave and agree to give the publishers special backdoor access to “monetize” news references.
Re: Re: Re:3
Interesting thought, but I was thinking…
Perhaps not really feasible because those legal actions aren’t actually cheap and would still reduce/devalue the return on investment.
Plus who actually has the power here? I’m not sure the media is who I would equate to having a MAFIAA-like power. If anything, that could be Meta. They could just counter with a way for those orgs to ‘report’ the posts and then just take them down with little or no oversight.
Meta still ends up on the better end of that deal, and the media loses even more engagement. I don’t think they really want that.
Re: Re: Re:2
Yeah, things that aren’t links are much harder for them to track.
However, Canada’s “link tax” doesn’t actually track links (or other things) directly. Basically, what it does is put news companies and social media companies into forced arbitration. The news company makes an offer, social media makes an offer, and then a government commission reconciles those 2 offers. Not having direct evidence makes their argument to the commission weaker, since they can’t easily cite stats to the commission about how often xyz thing is used. But they can still go the commission, and make a more handwave-y argument about how their content is still being shown on social media.
But part of the reason I bring this up, is because with research like this, they can go to the arbitration commission and say “look, see , this shows social media is still using our content just as much as before, so we should still be paid in full even with no links posted”. And the law is specifically designed to allow that. Whether it’ll convince a commission remains to be seen, but it’s definitely something to worry about.
Re: Re: Re:
Your recollection is correct. And that is exactly why I made my original post.
Re: Re: Re:2
So it’s a link tax on steroids, ya frickin’ clown.
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That’s not true, though. Things that don’t have links can (and are) still taxed under this law. Links are convenient, because it makes it much easier to track. But other things can and will be taxed under this law (and if you want proof, you can look to the fact that Facebook is removing things without links, as well).
I’m not denying that fact. I agree with that fact. What I’m saying is that we shouldn’t expect not linking to have any effect, if they’re still able to post about and consume news content.
I also didn’t disagree with that.
No, they don’t. It does not involve having to track links/screenshots individually. It’s just forced arbitration. Being able to track things definitely helps (because it gives them a better argument to the commission), but they can still force arbitration.
Part of the reason I bring this up, is because with research like this, they can go to the arbitration commission and say “look, see , this shows social media is still using our content just as much as before, so we should still be paid in full even with no links posted”. And the law is specifically designed to allow that. Whether it’ll convince a commission remains to be seen, but it’s definitely something to worry about.
The law does not apply only to things that were put there by Facebook. It includes user posted content.
The misunderstandings of the law that you’re making here are exactly why I made my original post. You’re misinformed. You think they’re tallying up how many times things were linked in order to get paid. That’s not how the law actually works, at all.
No taxation
No taxation without representation!!! ***
*** unless the taxing authority pays you money of course….
The Canadian government will latch onto this and claim it as a win for C-18.
Decline in misinformation links...
The decline in % of misinformation links would seem to imply that a significant portion of misinformation links are simply clickbait to drive traffic based on SEO algorithms. The linkless misinformation posts are more likely to be from true believers — there’s no profit in linkless misinformation for SEO.
For decades the cash cow that made newspapers profitable was the classified ads. They could count on being able to print page after page that was paid for by the word.
That’s gone away because of online competition, but it’s not the obvious targets of Meta and Google that are taking all those advertising dollars, it’s sites like Ebay and Kijiji.
News organizations can either adapt, or die. So far, I see very little evidence of them being willing to adapt.
Dealt with behind the scenes
Links are back on FB thanks to some backroom out of the spotlight negotiations that basically amount to the Australian solution: the politicians get to brag about bringing the big evil tech companies to their knees and protecting our values and the tech companies get an exemption from the law because of their pre-existing contributions.
Newpapers : get ready for the bill
The social media companies have to pay the electrical bills for all those servers, and network hardware. They also have to pay people making sure all those are working : engineers, developers, and so on.
Those LINKS cost money to social companies : in network costs, in electrical costs, in hardware cost, in employee’s wages.
Thus, they should calculate HOW MUCH it costs to them to have all of this running. And ask for newspapers to PAY FOR EACH LINK going from social media to their newspapers, because those servers, those network costs, all of that is costing money so the links can be published, and used.
Those links are like commercials on radio or TV. If you want your ad to be shown or heard, you have TO PAY. For the same reason, for EVERY SINGLE LINK to a newspaper, the COST of running those servers and everything has TO BE PAID.
To be paid by those asking for links towards then : the newspapers.
They don’t seriously think the social media companies servers and people are working for free right ?
That hardware is bought. People are paid to plug those, run those, take care of those. Without those, no links are published not available.
The time has now come for newspapers to PAY for what has been offered FOR FREE until now.
Have a good day.
Hereby signed : Zuck the Zuck.