More Evidence Bill C-18 Would Hand Majority of Money to Biggest Players

The Australian history could repeat as new evidence emerges that the biggest players in Canada would receive most of C-18 benefits.

In 2020, Australia pushed for a link tax in the country. The conspiracy theory pushed forward was that platforms like Facebook and Google were stealing money from publishers because they were, uh, making profits. There was also the existence of links on their platform, so even though the Berne Convention would say that this is perfectly acceptable activity, the government was more interested in upending copyright law and saying that links citing sources on social media platforms is activity that requires compensation.

Experts, however, were not convinced and they brought lawmakers evidence and submissions pointing out what a terrible idea this whole thing was. Of course, the Australian government ignored all the evidence and moved forward with the legislation. The message was clear at the time, this legislation was not being advanced based on logic, reasoning, or evidence. It was pushed by something else entirely. A number suspected that this was a massive lobbying push by the biggest players in the media sector to get a massive payday for, well, no real reason.

Those suspicions turned out to be correct. It eventually became known that Rupert Murdoch, owner of a large portion of the biggest media sources in Australia, received a lions share of the revenue. While he was getting a massive new gravy train of cash, smaller players only got minor amounts of compensation under the new scheme by comparison. In response, supporters of this scheme tried to rewrite history and say that all players benefited greatly and it has sparked a new renaissance of print journalism in the country.

While Australia seems to be a world away, it seems that history is repeating itself here in Canada. After a massive lobbying campaign by big publishing, the Canadian government introduced their own link tax legislation. During hearings, experts were brought in to discuss the flaws of the legislation, but they were only met with political attacks and accusations they are spreading misinformation. One thing is clear, this legislation is not bring brought forward based on evidence, logic, or reasoning, but rather, something else entirely (gee, I wonder what that could possibly be?).

Now, and see if this sounds familiar, evidence is emerging that the ones benefiting from this legislation might be those at the very top of the publisher food chain. From Globe and Mail (probably paywalled):

A report has revealed the publicly funded CBC and other broadcasters would get the majority of the $329-million a year Bill C-18 would inject into the news industry if it becomes law.

Broadcasters, including the publicly funded CBC, would get most of the $329-million a year the federal online news bill would inject into the news industry if it becomes law, according to a report by the Parliamentary Budget Officer (PBO).

Papers and the online news media would get less than a quarter of the funding pumped into journalism by tech giants Facebook and Google, the report says.

The analysis by the PBO, an independent body that provides economic and financial analysis to MPs and senators, concluded that newspapers and online media would get $81,550,000 a year, while broadcasters such as the CBC, Bell, Shaw and Rogers stand to get $247,677,000 if the bill becomes law.

Michael Geist, the University of Ottawa’s Canada Research Chair in Internet Law, said the analysis undermines the government’s claim that bill C-18 would breathe life into struggling local papers.

“The fact that three-quarters of the money will be going to broadcasters, some of which are the richest companies in Canada, plus the public broadcasters which are heavily subsidized already, undermines the government’s whole premise of the bill,” he said. “Papers will be left fighting over the scraps.”

The report confirms what critics of the legislation has been saying all along about this bill. Bill C-18 has nothing to do with “saving” local journalism. Rather, this is about enriching the biggest players in the industry and further tilting the industry’s power into a small handful of players at the very top, making it almost impossible to compete against them in the process.

The word that the legislation would largely only benefit the biggest players is having some in the sector thinking twice about supporting the legislation whole-sale. In a followup, Phillip Crawley, the publisher and CEO of The Globe and Mail, wrote a second piece saying that the bill needs to be re-worked:

This week I sent a letter, via e-mail, to a government minister. It might be the first time that has happened in my 24 years at the helm of The Globe and Mail.

Why now? Because there are risks to independent journalism in Canada if legislation making its way through Parliament is not defined more clearly.

Bill C-18 is the problem, in its present form. It contains language that could allow the newspaper industry to be subject to arbitrary regulation by a quasi-government body. Politicians of all parties should be wary of going there.

We hear many noble words about the role of the media in upholding democracy, and the value to society of holding our institutions to account.

But if government, or its agencies, are the gatekeepers for commercial agreements between newspapers (and their websites) and digital giants such as Google and Facebook, editorial freedom can be a casualty.

The provisions of Bill C-18 – to enable publishers and broadcasters, large and small, to negotiate with the big tech platforms under the watch of the Canadian Radio-television and Telecommunications Commission – may be full of good intentions, but they are alarmingly imprecise as they stand. The government has stated it intends for CRTC’s role to be administrative. We would like the language to reflect this.

Supporters have been quick to dismiss any and all criticisms of the link tax legislation as mere “misinformation”. Amusingly enough, though, this is one of the criticisms we and many critics have raised in the past. By making news dependent on government controlled funding, that erodes editorial independence and holding government to account. If your paycheck is dependent on a government controlled revenue stream instead of through third party sources, that is a huge motivating factor to simply move towards favourable news coverage of the government. This, in turn, leads to the erosion of journalistic independence.

To be clear, although Freezenet does some incredible work in the realm of journalism, we wouldn’t see a single nickel out of all of this. The scheme, as it currently stands, forces news organizations to “negotiate” in a cartel in order to receive funding of any kind. Smaller players like us have no chance that this will happen and, as such, will be forced to charge for linking, but at the same time, would not qualify as an “eligible” outlet to receive that funding either. Ultimately, paying for linking should never even be a thing in the first place, but the scheme envisioned by the government and their lobbyist friends ensures that this field is as anti-competitive to smaller players as possible.

Of course, a huge cloud hanging over top of all of this is the possibility that platforms like Facebook will not play ball with this scheme. Back in October, Facebook, in a moment of honest transparency, said that there is a very real possibility that they will just block news links in Canada altogether. Indeed, Canada is only a small country with a mere some 30 million people and, in the grand scheme of things, is only a small portion of their overall traffic. This as analysis confirms that news links accounts for 4 in every 1000 posts in their main news feed. The message is clear, news is only a tiny fraction of Facebook’s overall business.

To make matters even worse for the prospects of Bill C-18, Meta laid off 13% of its global workforce as the tech sector faces a major downturn in revenue. If the company is going through a major downsizing, and the return on investment is virtually non-existent for paying into the link tax scheme, what are the odds that they will just play ball and pay out for seemingly no reason at all? Lower than when this bill was first proposed.

Of course, for die hard supporters of the legislation, non of these facts really matter. For them, it’s all a big bluff and if they pass a law that alters the reality and the very nature of how copyright law works, then it is up to the rest of the world to bend to that reality no matter how ludicrous it is. All those layoffs and downturning? Who cares? Those platforms have lots of money and will have no problem frivolously spending it on their completely made up scheme. Facebook announcing that it will stop paying US publishers for links? Uh, let’s just ignore that and say that this development doesn’t exist. The fact that the legislation violates the USMCA? Uh, we can pretend that’s not a thing. The Berne Convention? What Berne Convention?

For supporters of this legislation, they better hope those darned pesky facts eventually stop getting in the way of their alternate reality of how things work. After all, they are depending on this miracle that, somehow, things will just magically work out on their own.

Drew Wilson on Twitter: @icecube85 and Facebook.

2 Trackbacks and Pingbacks

Leave a Reply

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

%d bloggers like this: