Canada forces Facebook and Google to pay news outlets for linking to articles

By Mike Ives

The Canadian Parliament has passed a law that will require technology companies to pay domestic news outlets for linking to their articles, prompting the owner of Facebook and Instagram to say that it would pull news articles from both platforms in the country.

The law, passed yesterday, is the latest salvo in a push by governments around the world to force big companies like Google and Facebook to pay for news that they share on their platforms — a campaign that the companies have resisted at virtually every turn.

With some caveats, the new Canadian law would force search engines and social media companies to engage in a bargaining process — and binding arbitration, if necessary — for licensing news content for their use.

The law, the Online News Act, was modelled after a similar one that passed in Australia two years ago. It was designed to “enhance fairness in the Canadian digital news marketplace and contribute to its sustainability,” according to an official summary. Exactly when the law would take effect was not immediately clear as of this morning.

Supporters of the legislation see it as a victory for the news media, as it fights to make up for plummeting advertising revenue that it attributes to Silicon Valley companies cornering the market for online advertising.

Garnett: The country’s largest newspaper chain filed a lawsuit against Google, accusing the tech giant of illegally abusing its monopoly over the technology used by publishers to buy and sell online ads.

Reddit: Thousands of volunteer-run message boards remained restricted or private, as part of a protest by users and moderators against planned changes to the platform’s business model.

Seeking Revenge: Some public officials are revoking their hometown newspapers’ lucrative contracts to print public notices in response to aggressive coverage of local politics that upsets them.

New Hampshire Public Radio: Federal prosecutors in Boston unveiled criminal charges  against three men accused of vandalising the homes of journalists in retaliation for an investigation aired by the radio station.

“A strong, independent and free press is fundamental to our democracy,” Pablo Rodriguez, the minister of Canadian heritage in Prime Minister Justin Trudeau’s government, wrote on Twitter late yesterday. “The Online News Act will help make sure tech giants negotiate fair and equitable deals with news organisations.”

Tech companies feel differently.

Meta, which owns Facebook and Instagram, had previously warned lawmakers that it would stop making news available on both platforms for Canadian users if the legislation passed. The company said that it now planned to do just that.

“We have repeatedly shared that in order to comply with Bill C-18, passed today in Parliament, content from news outlets, including news publishers and broadcasters, will no longer be available to people accessing our platforms in Canada,” Meta said in a statement.

It added that the changes affecting news content would not have an impact on other products and services that are used for fact-checking, social connections and business growth.

In a separate statement, a spokeswoman for Google criticised the legislation as “unworkable” and said the company had proposed “thoughtful and pragmatic solutions” to improve it.

Google told Canadian lawmakers in May that debate over the legislation had created unrealistic expectations among politicians and news publishers of “an unlimited subsidy for Canadian media.” Among other changes, Google suggested requiring tech firms to pay for “displaying” news content, not linking to it.

“So far, none of our concerns have been addressed,” the Google spokeswoman, Jenn Crider, said in the statement  yesterday. She did not say what the company planned to do about the law and declined to comment further on the record.

Similar battles have been playing out for years in other countries.

In the European Union, countries have been trying to enforce a copyright directive that the bloc adopted in 2019 to force Google, Facebook and other platforms to compensate news organisations for their content.

In Australia, Parliament passed a law in 2021 that forces Google and Facebook to pay for news content that appears on their platforms. At the time, Google appeared to effectively capitulate by announcing a three-year global agreement with News Corp to pay for the publisher’s news content. Facebook took the opposite tack, saying that it would immediately restrict people and publishers from sharing or viewing news links in Australia.

And in the United States, the Justice Department and a group of eight states sued Google in January, accusing the company of illegally abusing its monopoly over the technology that powers online advertising. The lawsuit was the department’s first antitrust lawsuit against a tech giant under President Biden.

California is also threatening to put legal pressure on tech companies. This month, the State Assembly voted to advance a bill to the State Senate that would tax tech companies for distributing news articles. Meta said in response that it would be “forced” to remove news from Facebook and Instagram if the bill became law.

This month,  Trudeau, the Canadian prime minister, suggested that he was not open to striking a compromise with tech companies over the Online News Act.

“The fact that these internet giants would rather cut off Canadians’ access to local news than pay their fair share is a real problem, and now they’re resorting to bullying tactics to try and get their way,” he told reporters. “It’s not going to work.”

Michael Geist, a law professor at the University of Ottawa who specialises in regulations that govern the internet and e-commerce, has said the efforts could backfire.

“It will disproportionately hurt smaller and independent media outlets and leave the field to poorer quality sources,” Professor Geist said. “Worst of all: It was totally predictable and avoidable.”

[Reuters]