OPINION: The Online News Act is a dismal failure that must be replaced

by Matt Hatfield, campaigns director, OpenMedia It’s increasingly obvious that the Online News Act, Bill C-18, isn’t working for anyone. Passed into law in June, C-18 is supposed to slow the ongoing collapse of Canada’s news industry. To do this, C-18 attempts to force Meta Platforms Inc. and Alphabet Inc.’s Google to pay news organizations in proportion to how often their users link to news stories, under the theory news sharing is benefiting platforms in ways they are not currently fairly compensating for. Unfortunately, neither company seems to buy this theory, and C-18’s early implementation is devastating Canadian news, not subsidizing it. Meta has responded by ending news sharing on their platforms in Canada, first blocking Canadian news, then international news sources too. Meanwhile, the government appears to be locked in increasingly desperate negotiations with Google to prevent them following suit. For now, Canadian news organizations aren’t seeing a single dollar of new funding, and many are facing crippling traffic declines from losing Meta visits to their sites. Platforms and government are playing the blame game, but the situation is a clear lose-lose for the rest of us. While Canadians can still get news through non-platform sources, we’re losing easy access to quality information sharing on some of the places we spend the most time online, like Facebook, Instagram, and Threads (Meta’s version of Twitter). We can and should respond by visiting our news sources directly and using alternative platforms to share news content, but no matter what we do as individuals, there will be a net traffic decline for many newsgroups, and that means more jobs lost in an industry already cut to the bone. Less Canadian news production and distribution isn’t something proponents or critics of Bill C-18 wanted, but barring a wild card development, that’s our immediate future. Polls show that the majority of Canadians want platforms to support news, but would prefer the government back down from their current confrontation with Google and Meta. So how can the government give Canadians what they want, and why did Bill C-18 fail to do so? The Online News Act’s problems start at its foundation: the news crisis is real, but C-18’s sloppy diagnosis of the problem is not. News is important to Canadians, has very little commercial value to online platforms. The simple reality is that most ad revenue has never been driven by news reporting, even at the height of traditional media. In their heyday, news sources attracted revenue through a comprehensive package of news and non-news functions you couldn’t get anywhere else, including classifieds, sports, entertainment, weather. The modern web provides thousands of dedicated services that handle these non-news functions, and that’s taken most advertising revenue for newsgroups elsewhere. It isn’t a reversible process, and not many of us would want to undo the diversity of modern services if we could. It’s not entirely clear who in government understands this fundamental dynamic and is cynically ignoring it, and who has genuinely bought the rhetoric that C-18 is simply correcting a “market imbalance” to ensure news organizations receive their “fair compensation”. The government’s surprise that platforms would choose to stop hosting news links rather than enter into an uncertain number of new financial obligations of undefined scope seems genuine. But while an imbalance in raw power undoubtedly exists between news organizations and major platforms, the largest imbalance is how much each needs the other. News organizations desperately need Canadians to see their content and read their stories, and social media is the best place to reach non-subscribers with that content. But the percentage share of platform content and searches related to news is generally in the single digits, and social networks like Facebook have been intentionally de-emphasizing that content for years, in the belief that their users want to see more personal posts from their friends and family. Do major platforms have a lot of Canadian revenue? Absolutely. Is there an argument that they and other major commercial participants in our information ecosystem should pay something towards making sure there’s high quality, fact-checked information flowing through it? I think so. But doing that right requires a fully developed, fully transparent tax and investment system for news support– something more akin to the Canada Media Fund that exists for creative content. Our government believed they could legislate the benefits of such a system into being without doing the careful work of building it, weathering foreseeable criticisms and amending the system to address them. That’s now been proven wrong. Building a long-term news investment system would not be easy, but unlike C-18, it might lead to news investment where Canadians actually need it. The news crisis for ordinary Canadians is not that we lack access to news. For many of us, the opposite is true– we feel under siege by a constant barrage of news. Yet much of this coverage is shallow, loosely restating press releases, or blowing up incidents of local importance into national stories because they drive outrage-driven engagement and clicks. The news crisis as it actually exists is in the reporting we aren’t getting, whether that is slow and expensive investigative work that uncovers and documents corruption in government or corporate affairs, or the long-term expertise that comes from steady analysis of local city council motions on issues like housing that deeply affect our daily lives. The news crisis fundamentally revolves around content that is expensive to produce and doesn’t lead to easy social media clicks, but improves the quality of our governance and understanding of the world. Bill C-18 has nothing to say about producing more of that type of news content. Because the bill is based on supposedly lost commercial value, funds derived from it must be calculated based on shares on Google and Meta’s platforms today. But this systematically biases C-18’s financial support towards Canada’s largest existing news organizations, and towards the cheap clickbait content production that does best on social media. It does not provide a dollar for addressing news deserts in communities that have already lost their local outlets, nor does it contain provisions that require large news organizations to invest any new funding in their unprofitable investigative or local news beats. Instead, they’re free to pocket the funding while continuing to lay their reporters off. Google and the government may find some middle ground on C-18 that leads to Google modestly expanding its existing investments in news, with a clear cap on the number and total value of deals it must strike to be in compliance with the Act. That compromise would be a short-term victory for our access to news, and for news organizations that depend on Google search to find an audience for their content. Our government would no doubt tout this compromise as evidence that C-18 is working after all. However, it would also be a concerning expansion of C-18’s troubling web of opaque, discretionary financial relationships between Canadians’ information sources and one of the most powerful companies in the world, Google. It is difficult to imagine how a cap that limits C-18 responsibilities could be applied that doesn’t give Google, the government, or both considerable opportunity to say no to some formally qualified outlets, while saying yes to others. This raises exactly the kind of independence of reporting concerns that were one of the few benefits of avoiding a formal fund model. To avoid this cloud of suspicion, C-18 or a successor bill must provide the Canadian public a clear line of sight into who gets what amount of money from platforms; the terms of the deals; and how they were selected. Failure to provide that transparency could seriously undermine Canadians’ trust in news sources, at a time when we badly need trusted sources to push back against increasing quantities of increasingly believable AI-generated misinformation of all types. A kludgy, shamefaced compromise on C-18 is likely the best outcome Canadians can hope for this year; but this will be mitigating the harm C-18 has already done, not fixing the news industry. From next year, our government must start discussing more long-term solutions to the news crisis. A Digital Services Tax on online platforms in Canada is planned to enter effect in 2024, and could be a logical starting place for sourcing necessary news funding. If an independent fund drawing on government taxed revenue receives more serious consideration, some Canadians will be rightly alarmed by the idea of expanded public spending on the news, fearing it will compromise reporting and make our fourth estate subservient to the government in power. The government must take these concerns seriously and address them not by dismissing them, but by building a thoroughly transparent and independent system for allocating news support that Canadians can understand and trust. It is heartening to see that commentators on both the left and the right are starting to accept the need for some non-commercial news production and are endorsing an independent fund model. If C-18’s failure accomplishes nothing else, it may start to pave the way for a future news subsidy system that could actually work. Matt Hatfield is the Campaigns Director at OpenMedia, a grassroots community of approximately 380,000 people in Canada and the US who collaborate to keep our internet open, accessible, and surveillance free. OpenMedia operates as a civic engagement platform to educate, engage, and empower Internet users to advance digital rights around the world. THE WIRE REPORT ACCEPTS SUBMISSIONS BY OUTSIDE CONTRIBUTORS WHO ARE KNOWLEDGEABLE ON THE SUBJECT MATTER DISCUSSED. SUBMISSIONS CAN BE SENT TO JCOCULLO@THEWIREREPORT.CA.

OPINION: The Online News Act is a dismal failure that must be replaced

News | August 18, 2023

by Matt Hatfield, campaigns director, OpenMedia

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OPINION: The Online News Act is a dismal failure that must be replaced

News | August 18, 2023

by Matt Hatfield, campaigns director, OpenMedia

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