Heritage Minister Continues to Push for Link Tax Law in Canada

Canada’s Heritage Minister, Steven Guilbeault, is seemingly touring media outlets arguing that Canada needs a link tax law (it doesn’t).

The Canadian media, known for their anti-tech and anti-innovation bias, is being treated with the presence of Canadian Heritage, Steven Guilbeault. He is currently trying to sell the disastrous link tax law to a media who is also attempting to push that same law.

Guilbeault’s recent push follows up last month’s misinformation campaign in which newspapers colluded to push conspiracy theories onto citizens in an effort to sell the link tax law. That push hurt the papers credibility in the process on this topic, but it seems that the Canadian media is moving ahead with this latest effort.

The CBC happily shoved a microphone into Guilbeault’s face who was all too eager to try and sell the link tax law. The Minister has, to this point, been unable to actually offer real justification for this disastrous proposed law. So, we are curious to see if he actually managed to manufacture any this time around. From the CBC:

Guilbeault told CBC’s The House that Facebook took a hit to its public image when it tried to head off a similar law approved this week in Australia by blocking all news from that country.

Google also threatened to prevent Australian users from accessing its search engine before reaching licensing deals with publishers in that country for stories that appear on its news showcase site.

“I think there’s a couple of lessons that need to be learned from what just happened in Australia. The first one is that if we ever needed a reason why these companies need to be regulated, Facebook just handed it to us on a silver platter,” Guilbeault said in an interview airing Saturday.

“(It) just proves the point that they’ve been unregulated for too long. And this needs to change. And I think the second lesson I draw from all of this is that we need to act internationally. We need to find international allies and engage on this issue together, because these are very big, powerful companies.”

So, in other words, there is still no actual justification for pushing the law to be had. Rather than provide any technical of financial justification, the Minister simply relies on the fact that Google and Facebook didn’t like the law. That is terrible reasoning. It would be the equivalent of saying that your significant other didn’t want to pay all the bills and saying that because your significant other doesn’t want to pay all the bills, then that is the reason to make him or her pay all of the bills. Not only is that not even touching any reasoning behind such a decision, but that could actually be the first step towards a breakup.

The article, however, did offer a glimpse into where the minister intends on going with this:

He said he’s aware, however, that Facebook and others should not be free to negotiate solely with Canada’s largest media chains.

“It’s certainly something that’s at the top of mind for us,” he told The House. “We need to ensure … a made-in-Canada approach to this, because we can’t just cut and paste a model and import it here.

“One thing we want to make sure is that our model will serve the bigger, the medium-sized and the smaller media organizations in Canada,” Guilbeault said.

Guilbeault said he has spoken to his counterparts in several other countries about the best approach. Heritage Canada also continues to talk with smaller organizations to ensure that the proposed legislation will lead to proper compensation for their content and encourage new companies to emerge.

So, in other words, the link tax is going to be much broader and bigger than the Australian model if the Minister gets his way. The wording here makes it sound like every outlet will simply benefit from a link tax law. However, this actually sets the stage for the government picking and choosing who it deems is “media” and who is not. Those outlets who are not considered “media” will have a financial disadvantage over those who are anointed to the label of “media”.

Not only does this represent a massive (and unnecessary) government intervention into the market place, but it could also present the possibility of weaponizing this against outlets the government doesn’t like. A scenario could go something like this: A media outlet publishes an article that embarrasses the government (rightfully or wrongfully, it doesn’t matter here). The government responds by revoking that outlets “media” status. That, in turn, becomes headline news and is a lever to try and name and shame the outlet as well.

At the end of the day, we still haven’t seen one solid justification for a link tax law. The arguments for the link tax law amounts to “regulate the tech giants”. When some pushers of the link tax law go into detail, they tend to lump completely unrelated controversies. This includes the fact that they are controlling larger shares of the advertising market, issues surrounding privacy, and their overall dominance in their respective industries. None of this even bares a semblance to justifying the link tax law.

If you want to target the tech giants for their control over the ad market, then find ways of fostering competition in the area. Find ways of incentivizing small companies to create their own ad networks in Canada. If you are worried about privacy issues of the larger tech players, then put in place regulations (i.e. something similar to Europe’s GDPR law) that actually have teeth and enforces privacy laws. If you’re worried about how there isn’t competition in the search or social media platform, find ways to incentivize networks and engines made in Canada.

If those are your three biggest concerns, ask yourself this: what would a link tax law actually solve from those perspectives? Nothing. If you put in place a link tax law, that will do exactly nothing in the ad network industry. What about competition? If anything, the link tax law would discourage competition in search and social media because it represents a new barrier for entry for new would-be entrants in the market. What about privacy issues? If you put in place a link tax law, we still have the problem of regulators sending strongly worded letters and companies replying to the effect of “bite me” and nothing changes.

This is likely why big publishing never goes into detail about “regulating the tech giants” while discussing the link tax law. It is a losing argument because they know that, if anything, a link tax law will make things worse on those fronts, not better.

At this stage, though, the likely outcome of this development is that the pushers of the link tax law will call all that convincing justification for the link tax law. They’ll congratulate themselves and convince themselves that they have “momentum” where there isn’t any. The only momentum they’ll score is with the choir they preach to (the very media outlets that have been heavily lobbying for this legislation in the first place).

Drew Wilson on Twitter: @icecube85 and Facebook.



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