Weekend Reads: The collapse of the Canadian media, part four

A Q&A with University of Ottawa law professor Michael Geist, on how Canada has become 'the preeminent example of what not to do from a digital policy perspective'

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This week, in the wake of controversial new legislation, Bill C-18, Meta has announced that it will be ending news sharing on its platforms in Canada. So, we reached out to a Canadian academic who’s been following this story closely, to get his reaction to the development — and to hear his analysis on what it might mean for our news sector going forward. (This conversation is part of Lean Out’s summer media series. Please also check out our interviews with Jen Gerson, Peter Menzies, Marc Edge, and Holly Doan.)

Michael Geist a professor and the Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa. He’s also the host of the Law Bytes podcast.

This is an edited transcript for paid subscribers. You can listen to the interview for free here.

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TH: It’s been a year since we last spoke, and since that time the Canadian media has spiralled into crisis. I did a Q&A with Blacklock's Holly Doan last weekend. She said, “We have just about hit bottom.” You've been covering the legislation around the media for many months now, on your podcast and your website, hearing from a range of guests. Including Marc Edge, Monica Auer, and Chris Waddell, who did such a fantastic job of laying out how complex this issue is. To start today — before we get to C-18 — how would you characterize the moment that the Canadian media currently finds itself in?

MG: First off, thanks for having me. And that's a good way to start. I think that “crisis” is the word that's often used, but I think there's different kinds of crises, depending on which media we're talking about. If we're talking about some of the legacy providers, they're clearly struggling. They've struggled to adapt. They've put, essentially, a big bet on this legislation, even though most — even within the sector —will acknowledge that this isn't good. Even if the Big Tech companies decided to cooperate and continue to link and pay, it still wouldn't be a fulsome solution. But nevertheless, they seem to have made a big bet on government intervention through this legislation.

I think the crisis for many of the smaller independent players is of a different sort. It is the legislation that is the source of the crisis. Because I think many have found audiences, found business models. When the government often talks about the number of closures and lost jobs, they rarely reference that the same studies highlight hundreds of new entities that have started over that same period of time, creating new jobs. Nowhere near replacement level, to be sure. But it's early days. For many of those entities, this legislation is viewed, in many respects, I think, almost as an existential threat — that the likely outcome from the legislation will make it very difficult to continue to do business.

So, I think we've got any number of entities in the sector facing crises, but they're not all of the same variety.

TH: This is an interesting week to be talking about Bill C-18. You warned back in February on your site that “everyone loses when the government mandates payments for links.” Meta has announced this week that it is officially ending news availability in Canada on Instagram and Facebook. The new Heritage Minister, Pascale St-Onge, has said in a statement that the government will stand its ground. But as you pointed out on Twitter, the Liberal Party just launched a series of new ads on Facebook this week. You wrote today on your site, "It is difficult to overstate the harm that Bill C-18 will create for the media sector in Canada." We've just been talking about that a little bit. Can you drill down on what that might look like?

MG: Sure. I think that the harm that is going to come out of this legislation continues to be really underestimated. At first blush, some will say, "Well, so what? So, Facebook won't link to news articles. Big deal, life goes on. People can still access the information in other ways." While that is certainly true, I think it fails to recognize a number of harms that arise out of this legislation.

The first is those free referrals. During the Senate hearings, there were a number of entities that appeared before the Senate that said that upwards of 30% of their traffic might come from social media, led by Facebook. Take away that traffic, for many sites, it's tough to go on. Continue if Google follows down the same path. And we had some say that up to 40% of their traffic was coming out of search. You just don't have a business anymore if you lose 70% of your referral traffic. All of which was coming, for free, from these various platforms — and seemed to be of reasonably equitable approach, in terms of free flow of traffic to those sites. Yet, the interference of the legislation has obviously caused a huge amount of upheaval in that regard.

But it's not just the lost links. There were deals. For all the talk [that] these companies weren't prepared to pay, the reality was that they did have any number of deals, worth millions of dollars. It may well be that some of it was a function of seeing the legislation on the horizon and looking to strike some of those deals. But regardless of the reason, media companies were benefiting from this. Those will be gone as well. Because you can't on the one hand say that you're stopping to link and at the same, time continue with these deals. So, that's lost.

Then you have the legislation itself, which the government had touted as potentially raising hundreds of millions of dollars. The Parliamentary Budget Officer talked about $330 million, and, in a committee appearance at the Senate, just before the end of the bill, said that might even have to be revised upward, given that the legislation encapsulated even more entities along the way through some of the amendments that took place. We're talking about a lot of money. As it stands now, certainly with Meta out, there is no revenue coming from that company. If Google follows suit, there's no money coming, period. The legislation literally will not apply to any Internet platform. There will be no money coming out of the legislation.

It's hard to fathom a worse scenario, whereby you lose the value of the links — which some have estimated into the hundreds of millions of dollars — and you lose the existing deals, and you have legislation that just doesn't generate anything at all.

TH: In terms the independence of our press, this is something that you have been warning about. And also about the free exchange of ideas. During your recent Senate testimony, Senator Wallin raised this point — that free expression and the free exchange of ideas is not just about what you can say, but also what you can hear. What are your concerns for the exchange of information in this country going forward?

MG: My concern with this legislation, from day one, was not whether or not the tech companies might be required to contribute to the sector. I think, frankly, if the view is that these companies aren't paying their fair share, then we ought to make sure that they do pay their fair share — and the obvious way is to tax them. We think that even those tax mechanisms aren't the best way to do it, and we want special funding programs similar to what we have in film and television production, and we can explore that. It seemed to me the companies were reasonably open to that possibility. They might argue about the amount. But nevertheless, the structure itself was fine.

Where I took issue with this legislation, really from its inception, was in the notion of mandated payments for links. I see linking to information as being central to the free flow of information online. The government essentially saying that certain links contained enough value that they required compensation, I think, really puts that basic principle at risk.

And we should be clear … Sometimes people don't believe me when I talk about this, but the government, on the one hand says that links have value and need to be compensated, but it's clearly not all links. It's, in this case, just certain news links, and it's only news links on certain platforms. Links that occur through Microsoft's products, or through Apple News, or through Twitter, or X — those links somehow either aren't valuable, or aren't required to be paid for.

That notion of value just doesn't make any sense. Where you say certain links have value; the same link, but on a different platform, doesn't have any value. Once you ascribe the notion that there is value to links that needs to be paid for, well, what makes media so special? People turn to the Internet for health information, for education information. Those sectors could use money too. And so, are we going to head down a path where any linking requires compensation? And suddenly, the system that we've relied upon now for decades for access to information in large measure falls apart, at least in Canada? Because we create a framework in which linking to that information — directing people where to find something of importance to them — somehow requires payment by the person providing that information? It just doesn't make any sense.

TH: I wanted to ask you, too, about the legislative process for C-18. My understanding is the clause-by-clause review saw very little debate and was wrapped up quite quickly. What are your thoughts on the process side of this?

MG: Oh, that's a great question. This was an awful process. Of course, there are two processes; there's what took place in the House and then there's what took place in the Senate. The House process was disastrous. Quite literally, there were just a handful of hearings and government MPs — the Liberal Party in particular — indicated they were ready to move on. Facebook or Meta hadn't even appeared yet, and they said, "We're ready now for clause-by-clause."

Imagine that you've established legislation in which one of the two companies most directly affected by this isn't even given an opportunity to appear before Committee. Now, they ultimately were, after there was a bit of reaction to the fact that when you looked at the long list of either independent experts or other stakeholders that hadn't been given an opportunity to speak out — they expanded the number of hearings and opened it up a little bit. Although, there still were many that were excluded.

Yet, the reality was that it was just largely theater. The government MPs, for example, any time there were any sort of proposed amendments that might seek to address some of the concerns, [they] basically characterized whoever raised that amendment — typically a conservative MP — as being a shill for Big Tech and would deny it. Despite the fact that now we have the government engaged in negotiations, with at least Google, around some of the same kinds of amendments that were being proposed back then. So, the House was just an abject disaster, where it was simply politics. There was very little interest in genuinely improving the bill and addressing the policy side.

When we got to the Senate, it was a bit better, to be sure. It was the same experience, I think, as under Bill C-11, where you did have senators more open to actual engagement. They did hear from a broader range of witnesses and put a bit more on the table. But the clause-by-clause was, I have to say, a pretty big disappointment. They got through the bill in a single day.

It felt as if some of the senators, who I think knew better — who throughout the process had raised real concerns about the legislation — it almost felt as if they'd given up. That they'd seen what had taken place in C-11, where the government had rejected even reasonable amendments dealing with the concerns back then around regulating user content. The writing was on the wall here; just about everything was being rejected. The warning signals they were getting were being ignored. And it felt like they were like, "Okay, we have got to move on. Nothing I do at this stage is going to change anything."

But I have to say that my biggest takeaway from all of this came, actually — to come back to your very first question — from the comments from several of the independent media companies, who told the senators directly that if the bill passed in that form, that it could cause them to shut down. They said, "Listen, we've stopped hiring, given the uncertainty this has caused."

TH: This is Village Media?

MG: This was Village Media, as an example. They're not the only one, The Line raised concerns as well. We had a number of players, but Village Media certainly was one of the most successful of the independent players, and was most obvious in that regard, Jeff Elgie.

It was met with basically a collective shrug. It was like, “Well, whatever.” The idea that the government, and unelected senators, can play with the viability and future of these businesses strikes me as fundamentally wrong. No plan B, no acknowledgment that their legislative choices were creating real risks. Simply a political calculus that they'd been heavily lobbied by News Media Canada, that this might be playing well in Quebec — and so it was full steam ahead. If this meant that they got to play battle with these tech companies, then so much the better.

Here we are a couple of months later, in a world in which that the largest social media company in the world is creating a news desert in Canada over the next several weeks, and Google may well end up in the same space.

Suddenly, Canada becomes the preeminent example of what not to do from a digital policy perspective. All in an environment that was predictable — and predicted — and for which the government, I have to say, they really just gave this collective shrug of, “Who cares?”

TH: I want to spend just a moment on the CBC, my former employer. You have argued that the CBC should not be included in this legislation. Walk me through your thinking on that.