If Lies Are the Only Way to Sell Bill C-18, Then Bill C-18 is a Bad Bill

More disinformation is being pumped out to sell Bill C-18. This recent round came courtesy of Senator Peter Harder.

Broadly speaking, when a government tables a bill, it’s usually to do something like improve the system, improve people’s lives, fix something that is broken, or a combination of that. While not technically necessary, public support for a bill can be huge to getting a bill into law. The easiest way to do this is to point to a problem, then explain how the legislation fixes it. Sell a bill on its merits.

Up to now, the only thing Bill C-18 has ever been able to accomplish is to identify a problem. That problem is that news organizations are struggling to stay afloat due to decreasing revenue. This problem was exacerbated during the pandemic as well. So far, so good, right? Unfortunately, this is ultimately the extent of the list of successes the bill has achieved in terms of overall credibility. Everything after that has been nothing short of a complete train wreck.

For one, the bill fails to actually help small local journalism outlets in any meaningful way. For another, the bill represents a major threat to Canada’s trade relations with the United States. Also, the bill represents a major threat to online innovators and business owners. With this and other problems, no one wins with this bill. Yet, Big Publishing is continuing to push this bill, falsely saying that this bill will be the holy grail of bills that will somehow miraculously save journalism for reasons that only make sense to them. This as the media pushes a considerable disinformation campaign meant to mislead readers on anything ranging from how the internet works to the benefits of the bill.

With the credibility of the bill currently six feet under, supporters of the legislation have been scrambling to at least tell a convincing story about the bill. The latest person to take a crack at this apparently is Senator Peter Harder, a Senate sponsor of the bill. His attempt, as you can probably tell based on the fact that I’m even writing about this, faceplanted quite hard. Long story short, the effort seems to solely be just repeating the same lies about the bill and hoping that they will eventually be true. His comments about the bill can be found on the Clinton News Record, so if you want a completely unredacted laugh, you can just check out the article yourself. Be warned, though, the page is absolutely packed with ads if you don’t have an ad blocker.

So, where did Senator Harder go wrong? Well, it’s difficult to figure out where to begin. Truth be told, it might be easier to list where his comments didn’t go wrong, but that wouldn’t really be as informative. So, buckle up because we are in for a long one.

The first issue happens right on the second paragraph which reads as follows:

Put simply, the business model of these digital platforms is to capture billions of dollars in advertising in exchange for our attention. But while the news business is doing the heavy lifting in covering the events and reporting on issues that matter to our communities — be they local, national, or international — very little of that value goes back to them.

This is a classic example of a non sequitur. To summarize more directly, the statement is basically saying that platforms make money off of traffic, news outlets produce content, but don’t get money from platforms, therefore, platforms are stealing money from news outlets. It does not follow. Indeed, platforms do make money (to varying degrees and depending on the platform). There is, however, no direct correlation between the success of the platform and the struggles of the entire media landscape.

Are platforms successful because people like connecting with each other? That can also play a role. Are platforms successful because people are posting viral videos? That can also play a role. Are platforms successful because people are learning about local events? That can play a role. Are platforms successful because people are buying and selling their possessions from each other? That too can play a role. To say that the success of platforms are successful solely because news links appear on them is completely disingenuous.

The next paragraph contains quite the doozy, though.

The aim of C-18, the Online News Act, is to return some of that value to the journalists who create the content and promote the creation of high-quality news and opinion in the process.

The first part in this sentence is part of the media’s Big Lie about Bill C-18 which I fully dismantled a while back. The second half is absolutely not true. All evidence we’ve seen so far say that Bill C-18 does nothing to promote the creation of high quality journalism. First of all, the single biggest source of misinformation about Bill C-18 comes from the biggest media outlets. Last year, the Parliamentary Budget Officer (PBO) released modelling saying that 75% of money derived from these link taxes are going to the largest players.

Further, just because you are throwing money at the large media outlets doesn’t mean that you are promoting high quality journalism. We don’t even need hypotheticals to explain this, either. Over the past few years, the Canadian government has been dolling out money in the form of massive bailouts to the large media companies. Some estimates peg the number at $700 million with programs that are known so far (these numbers are often shrouded in secrecy). The end result of throwing all that money at the big media outlets? Massive layoffs in those very same news rooms. Given that the Canadian Heritage modelling pegs the financial benefits of Bill C-18 at somewhere in the ballpark of $150 million, even if you truly believe that this time will be different, the dollar figure coming out of Bill C-18 would be a drop in the bucket by comparison.

We then get to this:

The success of some platforms as gatekeepers of information has allowed them to leverage a position of dominance in online advertising; advertising that they position in close proximity to the content produced by others, whose work attracts the eyeballs in the first place. This dominance creates an imbalance that undermines news businesses’ revenue streams, and the continued creation of quality news.

The first sentence here is completely false. Most often, when politicians talk about platforms, Facebook and Google are the ones that come to mind. Here is a screenshot of Google News. Feel free to point to the ads that are placed “in close proximity to the content produced by other”:

What? You can’t find them? Maybe because it isn’t there.

Now, let’s look at Facebook. Here is the Facebook feed of CTV. Again, let’s play spot the ads:

Well that’s strange. I could’ve sworn that this politician said that the big platforms are putting ads next to all these news links. Yet, actually going to these platforms, we’re not seeing any ads at all. Fun question: does Senator Harder even use these platforms to look for news?

Without the aforementioned ads that clearly don’t exist where we looked, the rest of the above argument completely falls apart.

Hilariously, the piece continues with this gem:

C-18 aims to level the playing field between dominant online platforms and news businesses by providing a legislative and regulatory framework that is flexible, modern and encourages market fairness.

This is a classic example of a false equivalence. Put the above argument another way, platforms make money from advertising. News publishers make money from advertising. Therefore, both are the same thing.

Google is primarily a search engine. That service allows people to search for content of all kinds across the internet. Facebook is a social media platform. Primarily, they serve as a way for people to connect to each other. News publishers, meanwhile, gather information and publish news articles, video’s and other news related content. They might branch out into some other areas as well, but primarily, they are in the information hunting and gathering game. To say that they are all in the same industry is a complete fabrication. This over top of the demonstrably false statement that there is a market imbalance between publishers and platforms when they are not even close to being in the same market.

In the same paragraph, we get this:

It will set the table for platforms to sit down with media outlets of all sizes, equipped with the ability to negotiate collectively, bringing players to the table on more equal footing. It encourages digital platforms that have a dominant market position to enter into voluntary commercial agreements that fairly compensate Canadian news businesses for the use and sharing of their online news content.

(emphasis mine)

There are multiple problems with the above statement, but the most egregious problem is what I’ve highlighted. As we found in our original analysis of the bill, the text is quite clear that these agreements are not actually voluntary. Section 11 is very clear that news links of all kinds require payment. News outlets have no legal mechanism to waive this requirement. Meanwhile, Section 31 is very clear that platforms have few to no options to get out of such arrangements. The only way to strike a deal without CRTC intervention is to enter into voluntary negotiations ahead of time. Failing this, then Section 33 of Bill C-18 is triggered, forcing “Final Offer Arbitration”. Nothing about this is voluntary. The only thing even remotely voluntary is deciding whether to settle this privately or by force. Put it another way, you are going through with the wedding peacefully or by the end of a shotgun, either way, you are getting married.

The second problem is that it’s false to say that news businesses in general are going to benefit from this. Because my analysis is based off of the first reading, and the section in question has since been amended, here is the updated version of Section 27:

27 (1) At the request of a news business, the Commission must, by order, designate the business as eligible if it

(a) is a qualified Canadian journalism organization as defined in subsection 248(1) of the Income Tax Act, or is licensed by the Commission under paragraph 9(1)‍(b) of the Broadcasting Act as a campus station, community station or native station as those terms are defined in regulations made under that Act or other categories of licensees established by the Commission with a similar community mandate;

(b) produces news content of public interest that is primarily focused on matters of general interest and reports of current events, including coverage of democratic institutions and processes, and

(i) regularly employs two or more journalists in Canada, which journalists may include journalists who own or are a partner in the news business and journalists who do not deal at arm’s length with the business,

(ii) operates in Canada, including having content edited and designed in Canada,

(iii) produces news content that is not primarily focused on a particular topic such as industry-specific news, sports, recreation, arts, lifestyle or entertainment, and

(iv) is either a member of a recognized journalistic association and follows the code of ethics of a recognized journalistic association or has its own code of ethics whose standards of professional conduct require adherence to the recognized processes and principles of the journalism profession, including fairness, independence and rigour in reporting news and handling sources; or

(c) operates an Indigenous news outlet in Canada and produces news content that includes matters of general interest, including coverage of matters relating to the rights of Indigenous peoples, including the right of self-government and treaty rights.

Section 27 (1) (b) (i) alone excludes small operations like Freezenet entirely. Even if Freezenet were to hire multiple journalists, Section 27 (1) (b) (iii) would still exclude the site for the simple reason that we are, vaguely, “focused on a particular topic” because we focus our coverage on technology related issues. Many online news websites operate in a very similar manner and, as such, would get excluded regardless of how they otherwise operate.

We then get to this paragraph:

The House of Commons improved the Bill with an amendment that now specifies that this rule does not require journalists to operate at arm’s length from the business. This allows for a framework that is more inclusive of start-ups and small news outlets, including those serving a diverse readership and more rural communities, whose owners or operators may also be practising journalists themselves. Outlets in small Prairie communities, Canada’s north and other isolated towns and villages as well as ethnic media will benefit from this bill. So will those Canadians who depend on local outlets for information that includes everything from the forecast of tomorrow’s weather to the reasons for a municipal tax hike and the state of the local crops.

While this paragraph sounds good, the ability to include a few more news rooms wasn’t the only problem smaller operations faced with this bill. It’s one thing to be permitted to have a seat at the table, but it is quite another to actually get something meaningful out of such negotiations in the first place. As we earlier mentioned, the Department of Canadian Heritage released their modelling, saying that the money derived from Bill C-18 is estimated to be $150 million. Assuming the same idea as the PBO where there is a 75% – 25% split between the large and small players, and dividing the number of regions where outlets and radio stations (those were hastily included too), optimistically, news rooms would receive, on average, $21,222.41 per year. You are not hiring a full time journalist for that much money to put it bluntly.

In other words, what this amounts to is, congratulations, some of you might get a seat at the table. After negotiations, you are getting peanut shells and you are going to like it.

We then encounter this next paragraph:

Just as government shouldn’t pick winners and losers, nor should Big-Tech monopolies. Yet, that is precisely what has happened leading up to the introduction of this bill. To thwart it, the web giants negotiated content licensing agreements with some of the largest names in the Canadian news business: the Globe and Mail, the Toronto Star, and Le Devoir to name just three. What Bill C-18 does is allow many smaller outlets to come together — as one — to negotiate similar commercial agreements. Without legislation, those smaller outlets will wither on the vine and the lucky few larger players to whom the platforms have offered short-term deals can kiss them goodbye when their term is up.

This paragraph demonstrates a great example of revisionist history on these matters. The reality is that the Canadian government was threatening to table link tax legislation should the likes of Google and Facebook not enter into agreements of their own. Faced with the prospect of the link tax being tabled in Canada, platforms inked deals with the large publishers in an effort to lower the temperature. A couple of the large outlets decided to hold out and wait for legislation to be tabled to score a better deal anyway. The government obliged and tabled Bill C-18 anyway, undermining the original deals that were struck in the first place.

With added pressure, Facebook has already signalled that the cost of doing business over a “nice to have” feature (allowing news links) is not worth it and is actively considering blocking news links in Canada altogether. Combine the constantly rising cost that platforms receive over features that is only a small part of their business model is becoming financially not worth it. Already, with a mere 4 in every 1,000 links in the Facebook main feed going to a news article, it’s no wonder Facebook is already shifting away from news. Combine that with the financial problems Facebook is facing, and you have a perfect storm of motivation for Facebook to block news links altogether. This isn’t even getting into the fact that publishers are already complaining that they aren’t getting enough money with the deals already struck.

Further, the idea that small outlets can combine and be on equal footing to Canada’s largest players, as already previously highlighted in this article, is pure fantasy. They have no hope in getting financial compensation anywhere near to what the big players are going to get.

The article then concludes with this paragraph:

It goes without saying that this bill requires appropriate and robust consideration, but its passage must be expeditious because many of the outlets it would serve are in a perilous state. Equally important, a strong, free, and fiercely independent press is one of the foundations of a safe and prosperous society.

In addition to the counterarguments already laid out above, there is another aspect that makes this statement in particular controversial. If you are an independent for-profit company, but a large portion of your revenue stream comes from a single source, then being independent from that source of revenue becomes more difficult. In the case of being a media company, it drives a stake through the heart of journalistic independence because the last thing you want to do is hold the very people writing your paychecks accountable. It’s one thing to, say, criticize Google over something, but it’s quite another when Google is also responsible for 30% of your overall income.

Not only that, but you are also beholden to the government as well. After all, the government has the option to revoke that deal. This as per Section 59 which reads as follows:

Contravention — eligible news business

59 (1) If an eligible news business contravenes a provision of this Act, a provision of the regulations or an order made under this Act, the Commission may, by order,

(a) impose any conditions on the business that are designed to further its compliance with this Act, including conditions respecting its participation in the bargaining process set out in sections 18 to 44;

(b) suspend, for the period the Commission specifies, the order designating the business as eligible; or

(c) revoke the order designating the business as eligible.

This is a powerful hammer for any news organization even thinking about getting out of line in the eyes of the government. You don’t even need to imagine the idea of the government being able to cut off some 30% of a news organization revenue. It’s right there in black and white. How are you supposed to write a news article about the government that portrays the government in an unflattering light when the government can turn around and say, “Nice deal you worked out with Google and Facebook. Would be a shame if something were to happen to it.”

If the whole goal by Senator Harder was to sell the legislation based on its merit, Senator Harder failed quite spectacularly at that. The talking points are very easily debunked and nothing was said that even came close to offering an honest case for why Bill C-18 in particular is needed to solve the problems it’s supposedly trying to solve. If there is a case for Bill C-18, we have yet to see it. Senator Harder didn’t even come close to changing this.

Drew Wilson on Twitter: @icecube85 and Facebook.

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