Meta has apparently begun cancelling media contracts. The US has also said it has no plans on intervening in this mess.
The fallout of the passage of Bill C-18, now called the Online News Act, is continuing to grow. Over the weekend, we reported on the government holding last-ditch effort talks with the platforms. This in an effort to salvage the situation.
It’s safe to say at this point that those talks failed.
Meta denied that they are in talks with the government. They further said that the law is unworkable and intend to pull Canadian news links from their services – as well as anything else that is scoped into the bill. Yesterday, we reported on Google announcing that it will drop Canadian news links as well. All of this, of course, is highly predictable. This was the expected outcome of the legislation in the first place. Lobbyists and the government were the only ones really believing that this was all a great big fancy bluff and that the platforms would come crawling back to lick their boots and give them money for nothing. In fact, hilariously, some still honestly believe this is all just a negotiating tactic and they’ll be back any time now.
Meanwhile, back in the real world, it seems that Meta has already begun cancelling its agreements it made with publishers. From Michael Geist:
The damage caused by the government’s Bill C-18 continues to grow as Meta has started to cancel its existing agreements with Canadian publishers. The move should not come as a surprise since any deals that involve facilitating access to news content would bring the company into the legislative framework and mandate payments for links. Indeed, Meta said earlier this week that its 18 existing deals “did not have much of a future.” When this is coupled with a reported “impasse” between the government and Google over its approach to Bill C-18, the risks to the Canadian media sector look increasingly dire.
There are obviously costs that extend far beyond the economics that include reduced access to news, increased prominence of low quality news sources, harm to the Canadian Internet, and the reputational damage to a government that handled this about as incompetently as possible. But from a pure economic perspective, the risks were always understated as they extended beyond just the value of increased traffic to publishers from the links they were themselves posting. Both Google and Meta have deals with Canadian publishers reportedly worth millions of dollars. As Meta’s step to begin cancelling deals suggests, those agreements are unlikely to survive the decision to exit news in Canada.
The damage caused by this legislation and the government’s decision to ignore the potential consequences therefore run into the hundreds of millions of dollars for Canadian news outlets, effectively undoing years of public support for the sector. The government heard directly from some publishers who warned that losing the links could force them to shut down their businesses given lost links and cancelled deals. Yet it somehow decided it was comfortable putting those businesses at risk as if tough talk would somehow pay the bills.
Some out there might be asking what it will take to stop the impending chaos and destruction in the news room. The unsatisfactory answer is a full repeal of the Online News Act. The chances of that happening are about on par with the Canadian Action Party winning a majority government in the next federal election. So, it’s safe to say that nothing is stopping this impending disaster from proceeding.
In response to Google’s announcement that it will be pulling Canadian news links, Heritage Minister, Pablo Rodriguez, said that he was “surprised” they would do such a thing (insert audience laughter here). From CTV:
Canadian Heritage Minister Pablo Rodriguez says he was surprised by Google’s announcement that it will cease hosting links to Canadian news outlets.
“Well, Meta, I always said it was complicated; Google we still have conversations as recent as this morning,” Rodriguez told CTV’s Power Play Thursday afternoon. “I’m a bit surprised by Google’s reaction.”
The minister continues to prove my point that, on a good day, he is barely aware of his own surroundings. The minister had some two and a half years notice that this would notice. This with repeated warnings and messages. As the days grew near that this bill became law, he was repeatedly asked by others in the media about the threats to pull Canadian news links from the service, but the minister repeatedly dodged the questions and, instead, reverted to the talking point that this was all just bullying tactics or negotiating tactics. Now that the move has happened, he is “surprised” by the development. If the consequences of what weren’t so serious, this would be hysterical.
Apparently, a US ambassador was asked if the US plans on intervening and bailing Canada out of this situation as well:
Although the Biden administration hasn’t weighed in on the legislation, some U.S. lawmakers have expressed concerns that it unfairly targets American companies.
“It wasn’t accidental that the United States didn’t take a position on C-18,” United States Ambassador to Canada David L. Cohen told CTV Power Play on Thursday. “It’s not that the letter got lost in the mail. I mean, there was plenty of discussion and there was just a decision that this was not something that we chose to intervene in.”
Of course the US isn’t going to intervene in this case. Back in January, US senators were calling on the USTR to issue trade sanctions on Canada should they pass Bill C-11 and Bill C-18. This along with at least three warnings from US trade representatives that the US is not happy about both Bill C-11 and Bill C-18. Now, there are those asking the US to help Canada implement these bills without the obvious consequences. Are you serious? Of course they are going to say “no”. The US is basically a backup to if the platforms moves somehow result in something unexpected happening.
At any rate, this is further proof that the Canadian government has now run out of options. There’s no law that can compel the platforms to carry news links, international law won’t come to the rescue, the US government has concluded that this is Canada’s mess to sort out (rightfully so, I might add), and there’s no other fallback plans that can correct the situation. Little wonder why news media bailouts are on the table at this point. What else is the government going to do at that point?
Drew Wilson on Twitter: @icecube85 and Facebook.
