French Link Tax Decision Sparks Media Interest In Canada

Reverberations from the French decision to compel Google to provide snippets on their news service and pay for it is generating media interest in Canada.

Imagine a world where there is a word of mouth tax. Did you like that restaurant you visited last week? What about that movie you saw in the theatre? It’s pretty normal human behaviour to tell friends and family about it. No one really thinks twice about this kind of activity. In fact, the people that run the restaurant and movie theatre would more than likely actively encourage such activity in a normal world. Now, imagine the restaurant or theatre owner telling all patrons that if you want to tell anyone about their service, they have to pay a license fee. Imagine the logic behind that is that customers used the service and by telling other people about them, they are using their services for unauthorized activity.

That kind of concept by most standards would be so backwards, it would be cast away as one of the most insane concept anyone has ever come up with. Yet, here we see the situation in France where, earlier this week, French regulators ruled that Google not only must use snippets in their news aggregator service, but also pay for it through the link tax as well. French regulators also told Google that they must negotiate with big publishers in good faith as well.

Google, for its part, provides a free service for everyone involved. They allow users to use their services to search for news. After that, when relevant results pop up, users get directed to the news services in question. The news services, for their part, actively have to submit their service to Google to tell Google to index their articles. After that, users find their articles and browse the news services in the process. Users can then be told about subscriptions on offer or see the ads which brings in more revenue to help fund the services they offer.

When the link tax became law, Google told publishers that if they want to continue being indexed, they can forgo paying Google to index their results. Otherwise, they’ll simply not be indexed because Google doesn’t pay money for the privilege of linking in the first place. The French regulator ruling, for its part, overruled that and demanded Google pay retroactive fees on top of it all.

Of course, one normal reaction is to say that this is happening a world away. It’s in another jurisdiction. It doesn’t affect me because I’m not even European let along French. Of course, as we see time and time again is that when rulings happen in other countries, the industries start seeing how much more they can get away with. What other country can we compel to implement these laws? It happened with the so-called “three strikes law” for file-sharing as well as Internet censorship, so such activity is by no means unprecedented.

Now, we are learning that the French move didn’t go unnoticed by the Canadian media. When word came down, it seems that some reporters went running to Canadian regulators to ask them if they saw the ruling and if similar laws could be implemented here. Here’s part of an article in the Toronto Star:

The ruling stems from a November 2019 complaint from two unions representing press publishers and a French-headquartered news agency, that claimed Google displayed their content unfairly in snippets on its service, costing them important revenue.

“The Competition Bureau is aware of this decision … (but) regarding the conduct in question, it would be inappropriate for the bureau to speculate as to whether it may represent a contravention of (Canadian law),” Marcus Callaghan, a spokesperson for the Canadian regulator, said in a statement Monday.

“The bureau must conduct a thorough and complete examination of the facts before deciding whether to challenge any type of alleged conduct.”

Winseck said he doesn’t expect Canadian regulators to come to a similar conclusion in the short term. But he said they’re at least aware of the problem, pointing to the findings of a government-commissioned independent review into Canada’s media and communications environment released in January.

This last paragraph seems to stem from a report that sparked major controversy for those who advocate for free speech. That controversy spilled over into February when calls came up to put in place stiff regulation on any news website. Among the regulations is that websites operating in Canada must put in place CanCon (Canadian Content) requirements just like traditional broadcasters. In essence, a certain percentage of content produced must be Canadian. If websites fail to adhere to that, then they could face penalties or, even worse, be forced to shut down.

While some pushed the idea that its only fair because broadcasters are forced to do the same thing, free speech advocates point out that there is a huge difference between a TV broadcast and an Internet website. One of the arguments is that the CanCon requirements were put in place because there were only so many channels on the dial way back in the day. With so much American media, Canadian broadcasters risked being squeezed out because Canadians could also get American signals. With the Internet, such a tight offering of a few channels on the dial simply doesn’t exist. After the Canadian Heritage Minister asked “what’s the big deal?”, he was forced to backtrack those comments after a firestorm of controversy erupted.

Of course, lost in all of this is Google’s threat to pull out of France. In the leadup to the Link Tax passage, Google did openly suggest that if things get far enough out of hand in France, they would simply pull out altogether. Many advocates saw what happened in Spain when that happened. Traffic and subsequent revenue plummeted for the publishers. When the pain got too severe, the big Spanish publishers had to beg Google to please come back. With such a history, it’s not a surprise that many are thinking that Google will simply do the same thing in France.

If anything, Canadian media outlets are eyeing this decision and think that maybe they can get in on the action. It would be little surprise if lobbyists working on their behalf are already working the halls of government to push for similar regulations in Canada. It is certainly proof that just because these issues are happening a whole ocean away doesn’t mean it won’t have the potential to impact you directly. Little surprise why so many outside of France are watching this story unfold with great interest.

Drew Wilson on Twitter: @icecube85 and Facebook.

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