Yesterday’s speech by Heritage Minister, Pascale St-Onge to US media suggests that a global link is the emerging strategy for Canada.
Yesterday, I reported on Heritage Minister, Pascale St-Onge making up tall tales to the US media. Since the report, I have been basically scouring the internet trying to find the original source of this (as I had to rely on Michael Geist to get some notes on what was said). Happily, I was able to find it and you can watch the complete and utter insanity below:
I won’t go through an exhaustive list of everything that is wrong with what was said as I have already covered parts of that in the previous report. The gist of it is that Canada’s link tax (the Online News Act) is failing with Google to essentially deliver the final knockout punch sometime later this year. Yet, there was the minister completely re-writing history, upselling the link tax and pretending that it was a roaring success. The facts simply do not match her wild claims.
The broader picture question in all of this can easily be this, however: why is this Canadian minister seemingly actively lobbying for a link tax law in the US? Is this possibly narcissism acting out? For the latter question, maybe, but there is an underlying strategy at play here – and it relates to the supporters of the new law getting high on their own talking point supply.
Rewind back to June when the Bill C-18 hearings were under way. Towards the latter portion of the hearings, we saw Australian lobbyists encouraging the Canadian government to pass the link tax law. Rod Sims had made an appearance before the House of Commons committee as well, so this was not a one off incident. Simply put, it was naked foreign interference being done by Australian lobbyists.
Now we are seeing Canadian officials basically doing the same thing in the United States. Like the Australian lobbyists, they are taking what happened in Canada, re-writing history from the ground up, and selling a foolish fantasy to the American’s about how “successful” the Online News Act was even though all evidence points to it teetering on the edge of a total legislative failure.
The answer to why they are doing this is actually pretty simple (and really stupid). A theory that seems to originate in Australia is that if every country passes their own link tax law, then “Big Tech” would have no choice but to bend at the knee and doll out free money to the large media companies around the world. To put it another way, lobbyists pushing these foolish link tax laws have not given up on freeloading off of the platforms. What’s worse is that they are not letting the failure of Canada’s Online News Act get in their way even as it causes immeasurable harm to the Canadian news sector.
Ultimately, the feeling seems to be one of the paths of least resistance is through the United States. Yes, there are multiple link tax bills floating around in the United States. The federal version pushed by Amy Klobuchar has been delayed partly because Republican’s have attempted to warp it into an anti-moderation bill as well. The idea is that the big mean tech platforms won’t just allow right wingers to spew vile and hateful things without consequence. Therefore, the platforms should be banned from moderating content because the hate must flow. This isn’t exactly something Democrats are keen on pushing and it ultimately contributed to the shelving of the US link tax at least until next year. Trust me, this assessment is putting it mildly.
Yet, the existence of the JCPA (federal link tax legislation in the US) as well as the CJPA (California’s own link tax legislation) may have only been motivating factors to target the United States by international lobbyists. The idea that the American’s can eventually be brought on board also greatly helps what international lobbyists believes is their cause. When the US pressures other countries to pass similar link tax laws, that is a much more powerful lobbying force than a Canadian international lobbyist similarly pushing insane link tax laws.
So, you can very easily see the strategy employed by lobbyists here. The problem here is that it is based on a very false premise. That premise is that platforms depend on news content to keep their businesses going. The hard reality is that there is nothing true about this. Ironically, Canada is actually a microcosm of this.
Google conducted tests of blocking news content in Canada in February. This was before their senate appearance. In a nutshell, they randomly selected Canadians and blocked news content with that tiny sample portion. When Google did appear before the Canadian senate, Google was asked what they found with their tests. Google responded to that question by saying that the results didn’t surprise them. Less than 2% of all search queries were news related. Since Google News doesn’t make Google any money, Google made even less money off of it in the first place.
Meta was similarly asked in a separate hearing about the value of news is for their company. Meta responded by saying that news content is highly replaceable. If news content was replaced by other content, user interactivity would remain the same.
Unsurprisingly, lobbyists didn’t believe them and continued to honestly believe that it’s their news content that is front and centre and the reason why platforms are successful. In no way the honest answers from the platforms were actually truthful in their minds. Well, news links got blocked on Facebook at the beginning of August and the results won’t surprise you. Independent research concluded that traffic on Facebook remained unchanged while engagement on news website pages plummeted. In fact, ordinary users, by and large, don’t really miss the presence of news content on Facebook for the most part. All of this proved the axiom that publishers need platforms far more than platforms need publishers. What Canada is witnessing is the large media sector getting kicked out of large parts of the digital revolution for being complete imbecile’s.
It is at this point that link tax apologists typically argue that the platforms are just taking losses in Canada because they are global companies. Whatever losses they take in Canada is very minor and they can just wait out the storm this way. The problem is that other countries are already seeing news content gradually get disconnected from the platforms already. Earlier this month, Facebook ended Facebook News in the UK, France, and Germany. In the US, referral traffic to US news publishers have been plummeting. The data has said over and over again that users use platforms like Facebook primarily to communicate with each other and share funny pictures. The idea that platforms rely on news content was never a thing.
Even if you subscribe to the notion that platforms depend on news content, ignoring all of the evidence which points to the contrary, the next problem becomes one of time. Already, Canadian media outlets have been kicked out of Meta and are staring down the extremely likely scenario of a repeat from Google. The Canadian media is bleeding out money already and Google dropping news links means that a financial artery is going to be punctured for the media companies in the process. Time, for a lot of these outlets, are not on their side. Metroland provided the latest example of this.
It was bad enough that the Canadian regulator, the CRTC, set a timeline which said that mandatory bargaining would only begin in 2025 at the earliest. This will result in a lot more bankruptcies since many outlets are already teetering on the edge with their online presence on the verge of being cut off. There are outlets out there that can’t wait until 2025 to get a financial life line.
All of that is bad enough, but it gets even worse when you start relying on international cooperation on a massive scale. Hoping that the US would pass a similar law is asking for a lifeline that will similarly take years. You not only have at least a year (if you are lucky) of the legislation working its way through the lawmaking process, but also the inevitable court challenges. As Mike Masnick of Techdirt pointed out last year, elements such as so-called “must carry” provisions are very likely unconstitutional.
Ask anyone who has reasonable experience in caselaw and they will tell you that court cases, more often then not, take time – a lot of time. You are probably looking at years of legal fights as a potential case against this legislation (if it passes in the first place) works its way through the court system. Optimistically, you are looking at a link tax law passing by the end of 2024 with court cases dragging this out for multiple years after. Suddenly, that absurd CRTC timeline (and it is absurd from the perspective of outlets already teetering on the verge of bankruptcy today) of starting a bargaining process in 2025 seems like not such a bad proposition by comparison.
Moreover, the US is actually one of the paths of least resistance. All these projections are optimistic. There are jurisdictions out there that haven’t even started the process of passing a link tax law in their respective countries. We’re talking about additional years tacked on over top of everything else. All of this in the (false) hopes that if every nation around the world banded together that platforms would have no choice but to finally give in. If you are a news business that is already teetering on the financial edge, staring down another major financial hit when Google drops news links, there is no scenario that I see that says that the same business can hold out for another decade with this wild and fantastical copyright theory to play out.
The sad reality is that countries pushing these link taxes are condemning their own news sector. The news sector already has mountains of problems as it is. Tack on getting disconnected from large portions of the audience and business models are just going to finally go over that financial edge sooner or later. Jurisdictions that are crazy enough to push a link tax law are just giving the media companies that final push over the edge, sending media companies crashing down into the rocks of bankruptcy below. It’s exasperating seeing the large media companies actively cheering on their own demise.
No one wins with any of this. If you thought the media sector was facing monumental problems before, just wait until the full effects of link taxes take effect. It’ll make modern times today seem like a happy utopia for the media by comparison. The more link taxes are pushed, the more destruction and carnage will befall news outlets all over the world – all for a legal theory that is entirely bunk in the first place.
Drew Wilson on Twitter: @icecube85 and Facebook.
