Meta, parent company to Facebook, is beginning the process of blocking news in Canada, the company said in a blog post on Tuesday. Google also aims to block links to Canadian journalism later this year for people in Canada in response to a new law that forces technology companies to compensate publishers for linking articles.
With Australia passing a similar measure in 2021, more countries are looking toward compensatory legislation as news outlets continue to layoff journalists in record numbers while Silicon Valley giants rake in hundreds of billions of dollars in revenue.
As we face a potential standoff between lawmakers and journalists on one side and the gatekeepers of the internet on the other, here's what you need to know about Canada's Online News Act and how it might impact you.
What's up with Google, Facebook and Canada?
The Online News Act, which goes into effect at the end of 2023, compels Google and Meta to compensate publishers when linking to news content. It's part of an effort to inject news publishers with an infusion of cash after the internet revolution upended traditional revenue streams for outlets.
Previously, newspapers relied on subscriptions, advertising and classified sections to keep their newsrooms operational. But with the move to information online, subscription revenue dried up as people began searching news for free, and sites like Craigslist and eBay, rather than newspaper classified sections, were used to sell people's goods.
Between 2008 and 2021, 450 Canadian news outlets have closed, according to Pablo Rodriguez, the minister of Canadian heritage. He says this has led to public mistrust and the rise of disinformation. At the moment, the Canadian Broadcasting Corporation is encouraging Canadians to visit its site directly to catch up on the latest news.
Does this impact people in other countries?
Right now, Google and Facebook's restrictions will only affect Canadians later this year when the law goes into effect. This means that Americans wanting to read up about news in Canada should still find news results from Canadian publications in Search.
Canada isn't the first government to push a publisher compensation law. The first was Australia, where in 2021 it passed the News Media Bargaining Code. It's expected to bring in $130 million annually, with Australia's Treasury already calling the law a success. Both Google and Meta resisted the Australian law before eventually coming to the negotiating table.
The California state legislature has also advanced a similar law last month requiring Big Tech giants to pay for linking to content, with Meta already threatening to pull news content if the law passes. US senators tried passing a similar law titled the Journalism Competition Preservation Act last year, but it ultimately failed to pass it through Congress. Although, lawmakers resurrected the legislation last month and hope to bring it to the floor for a vote.
For Canadians wanting to stay up-to-date on news later this year, here are some ways you can still find news.
The state of journalism is one of many concerns governments around the world have regarding the power of Big Tech. The industry has largely been unregulated, allowing tech giants to expand rapidly around the globe. Regulators are also noticing the closure of newsrooms and continued layoffs. In the US, 2,500 news outlets have closed since 2005.
As the internet's matured, major tech platforms like Google and Facebook took the lion's share of traffic online, being the de facto way people sought out information.
Google, in particular, not only controls the window into the internet for billions of people through Search, Chrome and Android but also the advertising marketplace and associated technology, which is its own US Justice Department-led antitrust lawsuit. This gives Google a huge influence in driving traffic, meaning that for a site to succeed, it needs to optimize its content for Google Search. And as Google has floated more ads to the top of Search, including e-commerce links, that's had an immediate impact on how much money websites can make.
What will the law do for Canadian journalism?
The Canadian law is estimated to bring in $329 million to Canadian newsrooms. By comparison, Google and Meta brought in $285 billion and $117 billion in revenue last year, respectively. Assuming each company had to pay out $329 million, this would only be 0.11% of Google's 2022 revenue and 0.28% for Meta.
"Big tech would rather spend money changing their platforms to block news from Canadians instead of paying a small share of the billions they make in advertising dollars," Rodriguez said in a tweet. "Canadians won't be bullied. Big Tech isn't bigger than Canada."
Google has already shown it's willing to play the long game, however; Google News backed out of Spain for eight years following the passage of a similar publisher compensation law before coming back last year.
Google didn't respond to a request for comment. Meta said it had nothing further to add.