Front Burner - Will Canada make web giants pay for news?

Episode Date: January 5, 2023

Bill C-18 would require big digital platforms like Facebook and Google to pay Canadian media outlets for posting or linking to their news content. According to Heritage Minister Pablo Rodriguez, the measures would fairly compensate Canadian media, keeping journalism healthy and strengthening democracy. According to critics, the bill would line the pockets of big broadcasters and threaten freedom of expression online. And as for platforms like Facebook – its parent company Meta has threatened to remove news content in Canada altogether. Today on Front Burner, a conversation with University of Ottawa law professor Michael Geist about why he believes this bill could harm both the internet and the media for Canadians.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Jamie Poisson. So when I started out in journalism, oh gosh, like well over a decade now, I had a few sites that I would go to directly and religiously. The New York Times, the BBC, here in Canada, The Globe, the Toronto Star, the CBC. The New York Times, the BBC, here in Canada, the Globe, the Toronto Star, the CBC.

At the time, even that was considered a big shift and a big problem for newspapers and news outlets. I mean, I only had one subscription to a physical paper. And since then, my habits have changed tons more. I find a lot of my news these days through social media, say an interesting link on Twitter, or by Googling a topic like COVID and China, or through specific people I follow and trust online. I have no physical subscriptions, but a bunch of online ones. Of course, while all our habits have changed, the tech companies behind these platforms have been pulling in billions, while some news outlets have been closing up for good, or have been struggling in a very big way. Well, the Liberal government brought in their response to this imbalance last year, in the

form of Bill C-18. The dominant platforms have a responsibility to support local news and journalism in our democracies. Well, the tech giants, they have a choice to make, and I want to work with them. This is Heritage Minister Pablo Rodriguez speaking last month when MPs passed the bill in the House of Commons. The bill is still in the Senate, but it's supposed to make some large online platforms pay news companies when they host or link to news content. According to the Liberals, this could keep our news media and democracy healthy.

But today, I'm talking to one of the bill's most vocal critics, who thinks it could help out the biggest broadcasters and do a lot of damage elsewhere. Michael Geist is a law professor at the University of Ottawa and the Canada Research Chair in Internet and E-Commerce Law. Hi, Michael. It's a pleasure to have you on FrontBurner. Thank you for coming on. Oh, it's my pleasure. Thanks so much for having me. So before we get into how effective Bill C-18 might be, I wonder if we could start by establishing why it exists in the first place. What's the problem with Canadian media that it is trying to solve here?

Yeah, well, I think your intro did a good job of highlighting what the challenge is for many conventional media companies in Canada, and that is people's habits have changed. And the economic challenges faced by news organizations are significant. I don't think anybody would understate that. Most Canadians will be aware that there have been layoffs or closures in recent years, although I don't think it's quite as one-sided as the government suggests. There have been hundreds of closures, but there's also been hundreds of new organizations, new news organizations, as it were, that have started up at the same time.

But certainly those that have been most deeply affected have been vocal with their lobbying. They're looking for support. Several years ago, they got hundreds of millions in taxpayer support through a number of different tax systems. And now they're back hoping that the big internet companies will kick in as well. And take me through how this bill would make the big internet companies kick in as well. Like how does it, how would it work? Well, it simply forces them to pay. It treats, especially the two large players here, Google and Facebook are meta, almost like an ATM expecting them to ensure that there's some withdrawals of funds coming out of those companies.

Now, those companies already have deals with many Canadian media outlets, but not all. But the idea here is that this system would effectively force these companies to make a choice, either paying or if they're unwilling to pay to simply stop sharing or making available or in the words of the bill, facilitating access to news content, which means either they're going to sign effectively deals with a wide range of media outlets, or if they don't, it can be pushed into an arbitration system where an arbitrator would decide between two offers, what the media companies say they'd like to be paid, and what the tech companies, the internet companies say they're willing to pay. The arbitrator would have to pick one or the other. And if the tech companies say that they're not

comfortable with either of those, then they would simply be unable to allow for the sharing of news or for facilitating access to news on their platforms. Eligible news businesses will also be able to negotiate collectively, giving smaller news outlets in particular more bargaining power. So this is extremely important for us so the small ones have a fair chance also. And just to be completely clear here, like when we talk about the facilitating of news, we're talking about links, right? So I put up a link to a news article, the CBC, on my Facebook page. And the idea is that the CBC should be compensated in some way by Facebook because it helps people stay engaged on the site, right? You're right, but it's an important issue for a number of reasons. For one thing, at least when the bill was initially introduced,

there was a tendency to push away from the notion that this was about links, talking about somehow you're using our content or copying our content. And I think actually that's how a lot of Canadians will think of it. That if Facebook, for example, were to post full copies of text of news articles, they'd say, well, that's something they ought to compensate for. But you're right. What we're talking about here, by and large, are just links. The content itself is still hosted at the original media source.

And if you find a link that's interesting that someone has posted, let's say on Facebook, you click on it and you go to the media site, which benefits from advertising, benefits from potential new subscribers. They are actually, in many instances, those media companies even pay for ads to try to drive people to their site to read those articles. They get all of those links for free in social media, but the government is saying there's a value there that ought to be paid for. More and more Canadians are turning to digital platforms like search engines

and social media networks as gateways to find news. And at the same time, the number of Canadians who read their news in print, who watch it on TV, is rapidly declining. It flips a little bit the conventional approach that we have with e-commerce and the internet, where typically people pay to be linked to. Here, the government says that, well, no, Google and Facebook in particular should be paying where they host links that drive traffic to these Canadian media sites. But, I mean, what about the argument that they're hosting these links and these links help people stay on their platforms so that Facebook and Google can sell me ads, right? Like, you know, what about that argument that they are making money off these links?

Well, they do make, of course, certainly they make money, although far less, I think, than is often suggested or appreciated. Facebook, for example, says that news constitutes about 3% of its content. And so I think it's pretty fair to say that Facebook is far more important to the news companies than the news companies are to Facebook, which is one of the reasons why they've suggested they might get out of this news linking business altogether. But I think the notion that we are making this, I think, pretty dramatic shift in saying that linking is something that should be compensated is something that we ought to have a deep discussion about because I think it's really troubling. You know, links are the lifeblood of the internet.

It's how we find information. I think it's expression. It's someone saying, this was a good podcast. You ought to listen to it. Here's where you can find it. I think it's also critical for dealing with things like misinformation. This basically says that on certain platforms, not all, the Twitter link, for example, somehow isn't compensated, but the Facebook link would require compensation. I think that moves us to a world where the kind of the way we've depended on the free flow of information on the internet really, I think, takes a hit if we start saying that, no, there ought to be compensation for links when they appear on these platforms,

and no, often posted by the media companies themselves. I want to come back to what else you think might be a better solution in a little bit, because I think it's a really interesting discussion. But first, what do we know about who stands to gain the most from these changes? has been driven by concern around, say, your local newspaper. And yet, when the Parliamentary Budget Office took a look at the bill and came out with its own estimates, first, they envision hundreds of millions of dollars potentially coming out of this. But they say that more than three-quarters of that, 75%, will go to broadcasters, to Bell, to Rogers, to the CBC. And in fact, during the hearings,

the government even expanded the scope of broadcasters who will be eligible, adding in hundreds of campus and community broadcasters who are licensed by the CRTC and aren't even required to produce news. And so suddenly now you find the major beneficiaries are broadcasters, the very big ones to be sure, but even a whole bunch of small ones that may not even produce news. And suddenly this feels like a bill that's far less about compensating to ensure that we can continue to produce news and more about basically a subsidy system for broadcasters. Hmm.

Just homing in on the CBC for a moment, you've written that you think what's happening with this bill, quote, undermines the public interest mandate of the public broadcaster, of the CBC. And so why? Why? You know, I'm a fan of the CBC and I'm happy the public tax dollars help fund it. I think it's an important part of the media ecosystem in Canada. But I think once the public has funded it, the goal is not to find ways to monetize it, in my view. It's to ensure that it is as broadly disseminated and available to the public as possible. And so what we see taking place from these platforms by essentially providing broader distribution of the content the public has already paid for, that really is, that's the goal in my view. I'm not here to defend the CBC, but I think what the CBC would say to that is that it doesn't get

enough public funds to do all the things that it does. That it doesn't get enough public money, and so it needs to find other streams of revenue. And so how would you respond to that? Well, I think that if the public broadcaster isn't sufficiently well funded by the public, then it falls to the public to provide more of that funding. I think, in fact, we've seen the private sector already concerned that the CBC is essentially competing for, let's say, digital ad dollars. So at a time when it is tough to compete, you've got the CBC competing for those same dollars.

Now you layer in a second layer and you say, okay, now the CBC is also going to compete for this additional bucket of money that may come through this legislation. And I think it makes it harder for new innovative companies in the private sector to compete. And so, yes, if we want to ensure that CBC does everything we want it to do, let's fund it properly, but let's not create an environment that will make it harder for some of the new startups and others to compete because there's lost revenues that are going to a publicly funded entity. We've talked about the big guys here, but what about those startups you were talking about, the little guys? What are they saying about this bill and whether or not it will help them survive and even thrive?

Yeah, that's a really interesting question. And I think there are two types of these smaller players. There's the small digital players, and we've seen a lot of them. They may be part of the way that you access news today. Many of those were opposed to this legislation when it was being discussed and raised.

Their reality was that they looked at the platforms as a critical part of their business model, almost more like a partner in terms of the ability for them to find audiences. And so they were deeply concerned about what this legislation might mean

if, for example, if Facebook were to exit the news sharing market, that would hurt their ability to grow and frankly be an advantage to some of the legacy established players who may be less reliant on those players. Then there are a whole series of very small entities in local communities that are maybe owner-operated, have a single journalist are a whole series of very small entities in local communities that

are maybe owner operated, have a single journalist and have a series of others that work on freelance to try to produce the news on a regular basis. And the government established thresholds, I think understandably saying that this wasn't going to apply to absolutely anybody that says that they produce news, but those thresholds have the likelihood of excluding some of those entities from being eligible for the system altogether. And so even amongst the news sector, we see quite about a diversity of opinion, let's say, about whether or not this will be a net benefit at the end of the day. And I wonder if it's worth noting here, this is something that certainly I've thought about as a journalist, and I know that journalism outlets set up firewalls, right, to ensure editorial independence.

But getting money from these tech platforms, I do worry that it could affect the coverage of these very important platforms or the perception of the coverage of these very important platforms, which I think is maybe important to note here. I think it's absolutely important. And I think your concerns are well taken. We know of a number of cases. I had it in my own situation, but I know others as well who have had opinion pieces spiked, refusal to run them even after they were approved in some of the large legacy media companies because they were critical of the minister, critical of the legislation. We've seen some of the media companies, newspapers in particular, devote their entire front page to essentially lobbying for this legislation.

And so I don't think there's any doubt that there has been on this issue, especially on the editorial side, a blurring of editorial and business. And that, I think, does undermine public confidence in the media and the notion that we're going to have even more reliance here, both on government and reliance on the platforms themselves. I think it's pretty troubling. Let's say even if Facebook does cooperate and down the road says, you know what, for whatever reason, this isn't working out for us, we're going to now block news. We're creating a system that increases dependence on the Mark Zuckerbergs of the world. I don't think that's the way that you solve these solutions in the long term.

Do you think Facebook would actually follow through with that bluff to just completely block news off of its site? Yeah, I must admit, I'm not sure that it's a bluff. This did occur in one other place in Australia where they did block news for about a week and then resumed the sharing of news. that research that was conducted around what Facebook looked like during that period when they blocked news sharing found that there was really no change in engagement at all. And in other words, Australian users continue to use the platform basically in the same way they always had, just news wasn't a part of it. And that's consistent with what Facebook says, as I mentioned a moment earlier, that news only constitutes about 3% of the activity on the platform. And so if you're Facebook, who's seen their share price plummet over the last year

or so, and the government comes along with a proposal that says you're going to have to spend $100 million a year for links to Canadian news services. And I think it's entirely possible that this isn't a bluff, that Facebook takes a look at that and says a hundred million for links just is for one country, isn't viable for that country. And the prospect that this sets a precedent where you start seeing many more countries saying, well, we want our a hundred million and someone else wants their a hundred million or 200 million. And suddenly it's billions of dollars all for links, I think it's entirely possible Facebook says no,

and Google has, in other countries, removed the Google News service in response to similar kind of legislation, and they kept it offline in some cases for years. In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization. Empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix.

I've been talking about money for 20 years. I've talked to millions of people and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo, 50%. That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Couples. vision together. To listen to this podcast, just search for Money for Cops. I know we're going through the criticisms of this bill, but the idea that someone looking at the huge revenues these platforms take in, then looking at their local newspaper that is struggling, they might be thinking to themselves, why shouldn't social media giants pay more? And

it also feels like this bill, whether you think it's wrongheaded or not, is tapping into a larger sentiment here, right? That Facebook, for example, has done quite a bit to undermine democracy and democratic discourse by spreading misinformation in recent years. So maybe it needs to pay for that and bolster news organizations that arguably play this very important role in democracies and in delivering fact-based information. And so what about that sentiment, this idea that this is kind of like a penance, right? we regulate these companies. So to be clear, there are a lot of problems with Facebook. One of the most frustrating things, at least for me personally with this bill, has been that I find myself defending a company on this issue that on so many issues I think has been enormously problematic. I think the government needs to prioritize its privacy legislation that's currently before the

House. We've seen just over the last few weeks concerns around the state of our competition laws with respect to telecom. I think we've got real competition concerns around the platforms as well. So I don't think it's about whether we regulate or not. But the idea that somehow they need to be paying for this sort of content in a construct that says links are something that ought to be compensated is, I guess, where I take issue. I think that we could set up a system. Indeed, I think you could make a good case to say that these companies should be making contributions. They've been doing some of it voluntarily, but creating something that better establishes or mandates some sort of payments, I think

I'd be open to it. I think a lot of people would be. The way to do that, in my mind, would be to require them to contribute into a fund. We do that right now with Canadian content, which has some of its own sets of issues, but that basic premise of if you're a direct beneficiary, that there's a need to provide some sort of compensation along the way to help support that ecosystem, I think is something we do see in other areas in Canada. And if the government had said, well, we want to do that in the news space as well. And so what we want to do is not fund large broadcasters or certain legacy companies, but we want to fund journalism. We want to ensure that people do have access to reliable news. And so we're going to mandate that you pay

a certain percentage, let's say of your ad revenue into a fund that then funds journalism, I think that would get us away from the eligibility questions and challenges we've talked about. It would get away from the government interference and the confidence in the media space that we've talked about and would get us away from paying for links. And so it would ensure that they do contribute into the ecosystem, but do so in a way that doesn't create some of the harms that I think this particular approach does. Worth mentioning here, a fund also has its issues as well, right? Who gets the money and how the money gets dispersed? So, I mean, these are not simple solutions, no matter which way you slice it.

Fair? Of course. There's no perfect system, and there are always going to have to be some choices. But I do think that a fund has the benefit of, first of all, ensuring that what you're funding is the journalism itself as opposed to companies. You look, for example, at certain media companies who are now largely controlled, let's say, by foreign bondholders and people are saying, well, who's actually even going to get any of this revenue to begin with? And so if what you're actually

funding is journalism and you create mechanisms that are arm's length from the government, that I'm not saying it's perfect. It certainly isn't. And there may be some who still object even to that. But from my perspective, that at least addresses some of the concerns both around a desire to have large platforms contribute and a desire to ensure that we have a sustainable journalism in our communities. And it does so in a way that just sort of tries to set aside some of what I think are the real harms that come out of Bill C-18. Okay. Michael, thank you so much for this conversation. It's a treat for me to be able to talk about journalism and the future of journalism on this show, so thank you.

Oh, it was my pleasure. Thanks so much for having me. All right, so before we go today, just a note to say we reached out to a CBC Radio Canada spokesperson, and he told us the CBC doesn't currently have arrangements with Google or Facebook's parent company to be paid for using its news content. But he says CBC thinks Bill C-18 is important to make sure all Canadian news can be fairly compensated for their content. He says CBC uses both public money and commercial revenue to fund its services and quote, more resources mean more services. That's our mandate.

We don't believe that Google, Meta and other digital platforms should be able to use our content simply for their own profit and market share. Finally, the spokesperson added that payments to one media company won't influence the money given to other companies because the agreements would be negotiated separately. That's all for today. I'm Jamie Poisson. Thanks so much for listening to FrontBurner, and we'll talk to you tomorrow. For more CBC Podcasts, go to cbc.ca slash podcasts.