Peter Menzies: The government's retreat from C-18 is too late, and may prove too little, anyway

It took the Liberals a weekend to go from comparing this fight to World War II to asking for terms of our surrender.

By: Peter Menzies

A week ago, Pablo Rodriguez was sounding like a pretty tough guy getting ready to kick some Big Tech ass.

Flanked by the NDP’s Peter Julian and Martin Champoux of the Bloc at a news conference, the Heritage Minister’s jaw was firmly set. As centrepiece in a three-party show of solidarity over Meta and Google’s decisions to pick up their balls and go home rather than participate in his Online News Act, Rodriguez was lookin’ nasty.

Referencing Meta’s decision to no longer — once Bill C-18 comes into force — permit links to news stories, Rodriguez definitely wasn’t blinking. Calling the decision by the company that owns Facebook and Instagram “unreasonable and irresponsible,” Rodriguez was ready to fight.

“If the government does not stand up to that kind of bullying and intimidation, then who will?” he asked.

As proof, he announced the federal government would no longer spend its usual $11 million for Facebook ads. The government of Quebec did the same, as did the City of Montreal, Cogeco and Pierre-Karl Peladeau’s Quebecor. Spotting a chance to save some cash, even Postmedia joined in. Oh, and the CBC. Of course they did. None seemed aware that Meta is avoiding potential costs in the billions and is going to save at least $18 million just on what it’s currently spending annually on journalism projects in Canada, including the salaries of a number of Canadian Press reporters. 

Rodriguez vowed that Canada would be consulting with its international partners on action and by the next day, the prime minister was invoking wartime.

“We think that Canadians must have access to quality news — quality information,” Justin Trudeau breathlessly told Canadian Press. “They have to be paid for that. Facebook decided that Canada was small enough in that they could reject our asks. They made the wrong choice by deciding to attack Canada.

“We want to defend democracy. This is what we are doing across the world such as supporting Ukraine. This is what we’ve done during the Second World War. This is what we are doing every single day in the United Nations and I know that Canadians will not be bullied by billionaires in the U.S.”

But later that same afternoon the Liberal Party of Canada confirmed it would continue to advertise on Facebook. Over the weekend, the PM’s staff were still posting dreamy images of their boss from the Calgary Stampede on Facebook. Rodriguez, looking snappy in a Canada Soccer jersey, was posting Reels (short videos) on his Facebook account.

By Monday morning, it became clear the PM’s reference to the Second World War was less about D-Day than Dieppe — a disaster. Rodriquez’s staff published proposed regulations designed to meet Google’s demands and it was clear the government had not only blinked, it was opening negotiations on the terms of its surrender.

Bill C-18 — the Online News Act — is designed to force Meta and Google, which own 80 per cent of the nation’s digital advertising market, to pay news organizations for using their services. This is based on the unproven  premise that they “steal” news content — a point of serious contention on the part of the web giants. They insist that the distribution and search value they offer, at no cost, is worth roughly $480 million to our news industry and that they already financially support journalism. To date, Meta and Google have complained the legislation is impossible for them to manage because there is no cap on their financial exposure — they can’t control the number of “links” posted that they would have to pay for. As well, they have said that if they accepted C-18 as written, and it is replicated — as it would be — in other countries, they’d be looking at bills in the tens of billions. As a result, Meta made its play and Google indicated it, similarly, would no longer connect through its search engine to Canadian news sites. 

It remains unlikely that anything short of amendments to the legislation itself will satisfy Meta. As Adam Mosseri, head of Instagram, posted on Twitter a few days ago, “From a platform’s perspective, any incremental engagement or revenue they (news organizations) might drive is not at all worth the scrutiny, negativity (let’s be honest) or integrity risks that come along with them,” he wrote. “There are more than enough amazing communities — sports, music, fashion, beauty, entertainment, etc — to make a vibrant platform without needing to get into politics or hard news.”

As for Google, which has indicated a solution could be found through the regulations that would allow it to sprinkle some extra cash around the news ecosystem and therefore win an exemption from the Act, it’s far from clear that the suggestions suggested by Rodriguez will be enough.

The proposed changes certainly show the government is ready to put a lid on how much Google would have to pay and how many companies it would need to pay. And, critically, Rodriguez has abandoned the idea that links have a price point. 

But they still provide little reassurance regarding what Big Tech is being asked to cough up. One hundred million dollars? A billion dollars? Who knows? Nor is it clear there is any guarantee of exemption or “future-proofing” against changes in the regs.

As a result, despite Rodriguez’s tail now being firmly between his legs, it remains possible that even if he is able to satisfy Google’s demands, there could be less Big Tech money for Canadian news organizations next year than there is today.

Meta appears content just to get out of carrying news. Its platforms aren’t in the news distribution business, they’re in the content business, and Mosseri’s point was clear: they’ve got lots of other kinds of content they can offer that are cheaper and way less hassle than news. That means that while Bell, Postmedia, CBC and the Star might get a little extra Google loot, there will be no 11th hour pardon via Bill C-18 regs for companies facing extinction if and when Facebook and Instagram tweak their algorithms to shut out news. Without Meta, those companies, along with all the startups, innovators and entrepreneurs, will lose millions in existing direct support, and access to millions of readers — readers they did not need to pay to reach.

Monday’s retreat may have lowered the body count, but as it stands the Online News Act is still likely to kill more journalism jobs than it will save. Let’s see which historical comparison the PM reaches for next.

Peter Menzies is a senior fellow with the Macdonald-Laurier Institute, past vice-chair of the CRTC and a former newspaper publisher.

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