Facebook Bill C-18 notice
August 2, 2023
For months, supporters of Bill C-18, the Online News Act, assured the government that Meta and Google were bluffing when they warned that a bill based on mandated payments for links was unworkable and they would comply with it by removing links to news from their platforms. However, what has been readily apparent for months became reality yesterday: Meta is now actively blocking news links and sharing on its Facebook and Instagram platforms. The announcement does not reference Threads, but it would not surprise if news links are ultimately blocked on that platform as well. The company says that the blocking will take several weeks to fully roll out to all users, suggesting that it has learned from the over-blocking mistakes made in Australia and is proceeding more cautiously in Canada. By the end of the month, the world’s largest social media platform will become a news desert in Canada, with links to all news – both Canadian and foreign – blocked on the platform.
It is worth revisiting that it was only a couple of months ago that some industry leaders, lobbyists, and academics were assuring the Senate that the Meta threat was just a bluff. Kevin Desjardins of the Canadian Association of Broadcasters, referenced the Australian experience, and told the Senate committee studying the bill that “when legislated to do so, they will come to the table.” Sylvain Poisson of Hebdos Quebec confidently said “they made those threats in Australia and elsewhere and every time they back down.” Chris Pedigo of the U.S.-based Digital Context Next assured the committee “it’s important to understand what happens when these bills become law. In Australia, they moved quickly to secure deals. They have done similar work in Europe, and I expect it would happen quickly in Canada as well.” And Carleton professor Dwayne Winseck said “I am not worried. The threats they are making, they are doing this all around the world.”
Despite the assurances, the company was true to its word and blocking news links is now here. If this is a negotiation tactic, it’s a pretty strange one given that reports indicate the company is not talking to the government about potential changes to a law that has already received royal assent. Indeed, while the new Heritage Minister Pascale St-Onge urged the company to participate in the regulatory process, there is nothing in the regulations that could alter the fundamental principle in the bill of mandated payments for links. At best, the government could toss aside its commitment to stay out of negotiations by using the regulations to dictate to the supposedly independent CRTC how much needs to be spent in order to avoid Bill C-18’s final offer arbitration provisions. Government negotiating total payment value and eviscerating the CRTC’s independence does not inspire confidence and Meta reasonably wants no part of it, since the time to fix Bill C-18 was before it received royal assent, not after.
It is difficult to overstate the harm that Bill C-18 will create for the media sector in Canada, with enormous losses that will run into the hundreds of millions of dollars. Indeed, just the exit of Meta will lead to the losses that include the cancellation of existing deals, lost links that accounts for as much as 30% of referral traffic, and no new revenues from Bill C-18 from one of the two platforms that were supposed to fall under the law. The move virtually guarantees that Bill C-18 will represent a setback for the sector and a cautionary tale for a government that blithely ignored the warning signs, seemed to welcome a fight with the tech companies, and had no Plan B. In fact, if Google follows suit, there will be even more cancelled deals, lost links, and absolutely no new revenues from the legislation given that those are the only companies subject to the law (former Heritage Minister Pablo Rodriguez’s insistence that there is value in links that deserve compensation while simultaneously excluding Microsoft, Apple, Twitter and other platforms from the law amply demonstrates how the argument stands on shaky grounds).
As disbelief has shifted to acceptance, Canadian media outlets are now rushing to promote direct access to their content via web, email or any other non-social media platform. The government is also seemingly hoping to drum up support for its ad boycott of Meta, yet given that the Liberal party launched new ads on Facebook just this week, that may be a hard sell. Instead, having rejected alternatives that could have avoided this outcome, the government has remarkably created a lose-lose-lose-lose scenario.
Canadian media is a loser, particularly the small and independent media outlets that are more reliant on social media to develop community and build their audience. The loss of Facebook links will take a serious toll and undermine innovative companies in Canada. The Internet platforms are losers as they comply with an unreasonable law by removing links and making their services objectively worse in order to do so. Individual Canadians who use the platforms to find links to news are losers since news links will be blocked from the platform. And the government is a loser, as having dismissed critics and ignored repeated warnings about the risks associated with its bill, it has now left Canada as the global example of digital policy disastrously gone wrong.