As Meta Lays Off 13% of Workforce, Doubts Rise They Will Comply With C-18 Link Tax

Canada’s Bill C-18 supporters continue to insist Facebook won’t block news links. A recent wave of layoffs, however, adds doubt to that.

Critics of Canada’s war on the open internet are continuing to get an endless supply of ammunition for their cause. The Canadian Liberal governments second prong, link taxes, has received a fresh helping of head winds. This came in the form of Meta’s massive layoffs recently.

For context, Bill C-18 supporters have had a long list of conspiracy theories to justify link taxes. One conspiracy theory is that platforms are stealing content from journalism outlets and profiting off of that content afterwards. This, of course, never held true as a mere cursory look at how links are generally displayed dispels this myth. What is actually being posted are, at most, thumbnails, a link, a title, and a short snippet. This is not even close to whole articles that supporters lead people to believe.

Another insistence by C-18 supporters is that such activity needs to be compensated and that it would be in compliance with all international obligations. Such activity falls well into the category of fair dealing in Canada and activities that fall within the boundaries of fair dealing does not legally necessitate payments. Further, such legislation, as noted by Michael Geist, violates the Berne Convention surrounding quotation. Additionally, as pointed out by the CCIA, Bill C-18, as currently drafted, violated several provisions in the USMCA as well. So, nothing could be further from the truth that Bill C-18 is in compliance with all of Canada’s international trade obligations.

What’s more is that Bill C-18 supporters believe in the conspiracy theory that when Australia passed similar laws, Facebook and Google somehow came to their senses and realized that the country was serious about implementing this law. As a result, both companies simply complied with the law because it was just common sense. The truth in the matter is that Microsoft was pushing hard to pass these laws in an effort to increase the cost of doing business of its search competitors. The gambit failed as publishers also demanded payment from Microsoft and both platforms manipulated the media’s greed, to great effect, to ensure that their dominance in their respective markets will never be challenged again. All this as the media continues to seemingly remain clueless what is actually happening.

A knock-on conspiracy theory is that large tech companies are flush with cash after hoovering up all of the ad revenue in the industry. Obviously, the business model between media outlets and platforms is mutually beneficial and portraying them as competitors has always been, at best, an apples and oranges comparison. While the portrayal never really made any sense, a key idea that large tech companies are flush with cash took a massive hit. Recently, news surfaced that Meta, Facebook’s parent company, laid off 11,000 employees, or about 13% of its global work force. From CBC:

Facebook parent Meta is laying off 11,000 people, about 13 per cent of its global workforce, as it tries to rein in runaway costs in the face of slowing demand for its core product, CEO Mark Zuckerberg said in a letter to employees on Wednesday.

Zuckerberg has hired aggressively in recent years, doubling the size of the company’s workforce from what it was before the COVID-19 pandemic.

Most of that hiring has gone into building the metaverse — an online augmented reality universe that Zuckerberg says is the future of the company and of society.

The company has spent tens of billions of dollars trying to build up its metaverse unit, known as Reality Labs, on the assumption that revenues would follow. But that hasn’t happened, and worse still, the company’s core business has started to slow at the same time.

“They’re hemorrhaging money because of their big bet on the metaverse,” said Daniel Tsai, a lecturer on technology and business at Toronto Metropolitan University.

Meta and its advertisers are bracing for a potential recession. There’s also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms such as Facebook, Instagram and Snap to track people without their consent and target ads to them.

This combined with news last month that Facebook threatened to block news in Canada rather than pay an estimated $100 million really challenges the narrative that Facebook would never carry through with such a threat. The news followed word back in August that it told US publishers that Facebook won’t be paying for link taxes in the US. That alone was a follow-up to word that out of 1,000 posts on Facebook, only 4 linked to a news organization. So, Facebook has already been reassessing the importance of news links and realizing that it’s not even close to being a major contributing factor to their success.

So, spending frivolously is certainly not something Meta plans on pushing aggressively for. Coincidentally, link taxes would be one of those frivolous expenses given how little importance news has in the larger Facebook ecosystem.

Indeed, as we’ve been saying from the very beginning, a massive problem with link taxes all over the world is that every publisher on the planet will be demanding their pound of flesh from Facebook and Google. For one country, spending some $100 million for the privilege of linking to news stories might be a drop in the bucket for platforms that large. However, when you multiply that expense by every individual country that is pushing for a similar tax, sooner or later, it’s going to add up. Combine that with a company that is already shedding jobs to try and save money and you have the picture that paying for linking is high on the chopping block for saving money.

Bill C-18 supporters will probably continue to insist that everything they make up is king and the facts don’t matter. Unfortunately for them, sooner or later, those darned pesky facts that keep getting in the way will catch up to them. If Facebook blocks link sharing in Canada, reality is going to crash hard for the mainstream publishers who seem to think that the world revolves around them.

Drew Wilson on Twitter: @icecube85 and Facebook.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.