This story originally appeared in The Breach on July 6, 2023. It is shared here with permission.

The Liberal plan to force Facebook and Google to pay news creators appears to be collapsing. 

The scheme—Bill C-18 or the Online News Act—would force Google and Meta (Facebook and Instagram’s parent company) to sign bilateral agreements with some news creators and pay them for the use of their content. It was inspired by a similar law that came into effect in Australia in 2021.

Instead, Google and Meta have said they’ll shut down all news sharing on their platforms. 

A shutdown of news sharing by these two tech giants would damage Canadian media and devastate smaller publications. News outlets, including The Breach, rely on these platforms to reach readers. 

Meta and Google’s reckless game of chicken is almost certain to kill journalism jobs, as traffic to news sites dwindles, and further erode public discourse already toxified by social media: YouTube and Facebook in particular. 

A solution is in plain sight. Instead of the Liberals’ convoluted scheme based on posting links, the government could tax Google and Facebook directly.

Bill C-18 makes Meta and Google’s payment contingent on how much news is posted on their platforms. The implicit assumption is that the platforms benefit from news. 

That may be the case, but they benefit far more from siphoning advertising revenue from the news industry. In the last decade, online giants have taken billions in ad revenue out of local news without being obliged to create any content. 

Since 2020, Meta and Google’s news-based advertising revenue has outpaced that of other news media. Credit: The Breach

As a direct result, hundreds of local newspapers have been shuttered and decent, stable reporting jobs have been shed.

Now, Google and Meta want to kill journalism a second time. They’re throwing a tantrum about the requirements imposed by the Online News Act, and the weakness of the act is letting them do it.

It’s an own-goal by the government, with an assist from legacy media.

When it comes to the internet’s restructuring of the news, the toothpaste will not go back in the tube. Due to the nature of online news, ad revenues will probably never be linked to journalism the way they were in the era of newspapers and TV again. 

But another function of the internet is that it has created an advertising duopoly: Meta and Google control over 80 per cent of the online ad market. That means that those revenues are relatively easy to tax. 

France raised $1 billion with Big Tech tax

France has done just that. In 2019, they levied a modest three-per-cent tax on Big Tech companies. Estimates show the windfall from France’s digital tax in 2023 will be nearly CAD$1 billion. 

Three per cent, it should be said, is very low. For the Google-Meta duopoly, why not take 25 per cent? Would Meta and Google flee Canada and leave billions in revenues for someone else? Unlikely. 

Calling the bullies’ bluff has its benefits. The money collected from even a modest Big Tech tax could fund the salary of every journalist in Canada—and give them a hefty raise.

Those companies are printing money on the strength of their effective control over the platforms where millions of people start their visits to the internet. Governments can simply take some of it and use it to fund journalism.

Liberal plan lets tech giants choose winners

So why are the Liberals giving Meta and Google the chance to back out of funding news?

The most charitable possibility as to why the Liberals went the route of the “Australian model” is that they didn’t want the government to get involved in the news business. But when we account for the tens of millions the government has handed to the hedge funds feasting on the remains of Canadian journalism, this argument doesn’t make a lot of sense. 

It’s probably more accurate to say that the Liberals would like to avoid the perception that they are—as the Conservative refrain goes—“picking winners and losers” instead of letting the market decide which outlets survive. But their solution was to let Google and Facebook pick them instead.

Canadian Heritage Minister, Pablo Rodriguez, first brought Bill C-18 to the House of Commons in April 2022. Credit: Pablo Rodriguez/Twitter

Picking winners and losers—less pejoratively known as economic planning—can actually be a good thing. “The market”—a nice way of saying the decisions the ultra-rich and their financial advisors make—is sacrosanct in neoliberal ideology.

More legitimately, Liberals could be worried that setting up a neutral funding formula for media would tee up a scenario where tax dollars flow to a high-profile right-wing outlet.

Here’s one possibility: use the Big Tech tax to only fund local, democratically governed, non-profit media outlets, and do it in proportion to population (with provisions to boost small communities).

That would prevent Postmedia’s hedge fund owners from siphoning the cash into their New Jersey coffers, which they would likely do under the Online News Act. It would eliminate the impacts of Rebel-style outlets getting a cut, and would channel resources to those hardest-hit by the slow-motion ad revenue apocalypse that killed off a slice of Canadian journalism.

There are other safeguards to ensure government stay at arm’s length from journalists, and they should be thoughtfully designed, debated and assessed.

Beyond taxes: regulate and decentralize

Taxes are a crucial first step, but this conflict has highlighted the long-term perils of consigning enormous concentrated power over public discourse to a few billionaires. The discussion needs to move quickly toward regulating social media giants as public utilities and forcing decentralization so that monopolies—present or future—don’t have the power to pull the plug on entire media ecosystems.

For now, the alternatives currently on the table—a bill that would either funnel millions of dollars to a New Jersey hedge fund, or Google and Facebook cutting news off at the knees again—are unacceptable.

Out with the Australian model, in with the French.

It’s time to tax Big Tech.

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Dru Oja Jay is a writer and organizer based in Montreal. He is a co-founder of the Media Co-op, and co-author of Paved with Good Intentions: Canada's development NGOs from idealism to imperialism, and he is a coordinator of the Unite Against Austerity campaign.