Online News Act | The digital giants’ response could hurt

The confrontation has intensified between the digital giants and Ottawa since the adoption of the Online News Act. If Google walks the talk by blocking Canadian news from its search engine, there could be consequences for the media industry, which has been shaken many times since the beginning of the year.

For the Trudeau government, it is also a new tile. After Meta announced last week its intention to stop relaying Canadian news for good in protest against the passage of Bill C-18, now the Alphabet subsidiary is following suit.

If they walk the talk, the two American giants will inevitably have a noticeable negative impact on the traffic of Canadian publishers’ websites. The consequences of Google’s decision may even be more serious, fears Colette Brin, director of the Center for Media Studies at Laval University.

“For me, it’s worse than Facebook,” she said in a telephone interview. In general, when we look for a news, we go through Google. Applications and websites, few people go around. The media rely on this traffic. »

Adopted last week, Bill C-18 aims to force web giants to enter into compensation agreements with the media whose content they publish. Like the owner of Facebook, Google would rather stop relaying Canadian news than pay to do so.

“The government has given us no reason to believe that the regulatory process will be able to solve the structural problems of the legislation,” Kent Walker, Google’s president of global affairs, said in a blog post.

According to him, the Online News Actwhich is due to come into force in six months, will prevent the multinational “from offering Canada [son] Google News Showcase product” – the news licensing mechanism of over 150 local publishers. This outcome may seem surprising, since leaders of the company had met, last week, the Minister of Canadian Heritage, Pablo Rodriguez. The latter had even praised their collaboration as well as their proposals “based on common sense”, depicting them as more constructive actors than Meta.

Far ahead

The reputation of Google’s search engine is second to none. In Canada, the tech giant has about 92% of the online search market share, far ahead of rivals like Bing and Yahoo. However, it is more difficult to get an idea of ​​the impact of the search engine on traffic to news sites. However, it seems more important than that of Facebook. Worldwide, Google estimates that it generates 24 billion clicks to news sites every month.

According to research by Jean-Hugues Roy, a professor at UQAM’s School of Media, Quebec media posts generated an average of 44% fewer interactions on Facebook last May compared to January 2021. that the sum of the disadvantages of Bill C-18 is greater than the sum of the advantages? The professor believes that it was Ottawa’s orientations that notably prompted Facebook to enter into individual royalty agreements with Canadian publishers.

“There was a threat looming and we wanted to appease the government,” underlines Mr. Roy. They said, “Look how generous we are.” »

These agreements were mainly announced in 2021 with a group of around 20 publishers, including the National Cooperative for Independent Information (CN2i) and its six regional dailies, The dutyTHE Toronto Star and the Globe and Mail. Most of these agreements should end on July 31, according to our information.

Other consequences

Facebook also continued to crack down on Thursday, ending its partnership with The Canadian Press to support the hiring of journalists within the news agency. This partnership aimed to fund nearly 10 journalist positions across the country. It will end when the terms of the current scholarship recipients are completed.

Quebecor, CN2i, Postmedia, Bell… There have been hundreds of job cuts since the start of the year across Canada. After the lull during the height of the COVID-19 pandemic, when government ad spending helped limit the damage, the media crisis has flared up again.

If they materialize, the threats from Google and Facebook could hurt, especially for online media, whose fate is intimately linked to social networks. This is notably the case of Narcity Media, behind the Narcity and MTL Blog brands.

The company is among those that had entered into royalty agreements with Facebook. The co-founder and CEO of the company, Chuck Lapointe, did not want to comment on this file. What particularly worries the businessman is losing the influence offered by platforms like Facebook and Instagram.

“We have invested millions [de dollars] in there, he said, in a telephone interview with The Press. We position ourselves in the market by distributing content on social networks, this will have a massive impact on our business and our relationships with advertisers. These are big question marks. »

Like Mr. Roy, the leader of Narcity believes that Google and Facebook will make Canada an example in order to send a clear signal to American elected officials. In California, the state assembly has adopted a text that could force large social networks to pay the media.

Ottawa takes on Silicon Valley

Will Canada hold its own against Meta and Google? The war that has been brewing for months between the government and the web giants is officially open, and in Ottawa as in Silicon Valley, we are sticking to our guns. Both sides admit they don’t know who will come out on top – but according to one expert, it’s clear that multinationals aren’t bluffing.

The pilot of the Online News Act, the Minister of Canadian Heritage, Pablo Rodriguez, stays the course. The status quo “doesn’t work”, and the retaliation of the web giants demonstrates “how irresponsible and out of touch they are”, as they make “billions of dollars thanks to Canadian users”, he said. he decided on Thursday.

In their crusade, the Liberals can count on the support of the Bloc Québécois and the New Democratic Party (NDP). “We just feel like standing up and defending the law. I believe in its relevance and its urgency, ”insisted Bloc member Martin Champoux. He still wonders why the federal government continues to buy advertising on these platforms.

Same story at the NPD, where Deputy Leader Alexandre Boulerice has given a string of criticisms to describe the behavior of the two multinationals: “predators”, “raptors”, “bullies”, he hammered.

Conservative leader Pierre Poilievre did not blame Meta or Google on Thursday, instead attacking “the internet law of [Justin] Trudeau” and claiming on Twitter that if elected prime minister he would “fix what Trudeau broke and restore freedom of speech.” His team later clarified that this meant he would repeal the Online News Act.

“It’s not a bluff »

The threats will not be carried out until the law comes into force. This must go through a regulatory process which should be completed in six months at the latest. The problem is that both Meta and Google seem to have little hope that the approach will bear fruit, judging that the regulations will not change the fundamental provisions of the law.

And according to Nellie Brière, the two companies will not hesitate to turn off the tap if the government does not flinch. Because the Canadian market, “they can deprive themselves of it exclaims the specialist in digital communications, very critical of the law.

The specialist also argues that it is wrong to say that the model has been a success in Australia. One, “Meta is exempt” from the law – which had been reviewed after its revolt –, and two, “the agreements concluded by Google just favor big players like [le magnat de la presse] Rupert Murdoch and harm small players”.

In any case, other countries, particularly in Europe, are monitoring the standoff that is being played out in Canada, recalls Sylvain Lafrance, director of the media division at HEC Montreal. “Many countries are considering charging [les géants du web]. In the short term, there is an impact, but the big players are going to have to find a solution eventually,” he said.

Media woes in 2023

The ax has fallen everywhere in the media industry since the beginning of the year. Overview of the situation

January 25

The country’s largest newspaper chain, Postmedia is cutting 11% of its newsroom staff – about 70 positions. English daily Montreal Gazetteabout ten positions have been eliminated.

February 16

Quebecor’s media sector suffers. 240 positions are being cut, including 140 at Groupe TVA.

March 2

Layoffs occur at Global News, owned by Corus. However, their extent is not specified.

March 29

The end of the paper at Coops de l’information leads to the elimination of a hundred positions. A voluntary departure program is in place.

April 24

Métro Média, which employs 40 journalists, fears laying off half of them. In the dock: the Montreal regulations requiring citizens wishing to receive the Publisac, which contains local weeklies, to request it.

June 14

The ax falls at Bell: nine radio stations close in the country and 1300 employees lose their livelihood. Quebec is not immune to the cuts, but the Noovo television channel is spared.

June 27

Postmedia and Nordstar, owner of the Toronto Star, are negotiating to merge. Both organizations are facing financial difficulties. Unifor, the union that represents employees of the two companies, fears the consequences of a merger.