Meta, Facebook’s parent company, recently released its stand on the planned implementation of Canada’s Online News Act (“ONA” or the “Act”). The ONA wants Facebook, Google, and other online platforms and tech companies to share revenue with online news publishers.
While the Canadian government has a noble objective behind the proposed law, Facebook thinks otherwise. According to them, it unjustly enriches publishers to their prejudice. They added that the ONA misrepresented the relationship between news organisations and platforms. This is why they have called on the Canadian government to rethink their move and ask the government to help build a more sustainable and fairer news industry.
Canadian news publishers received about two billion clicks in the last year, bringing around CAD 230 million in revenue. According to Meta, the proposal’s framework is skewed, with news articles accounting for only three percent of what people see on Facebook. The said framework suggests that Meta is unfairly benefitting from these publishers.
While Meta is trying their best to stop the Online News Act from being implemented, the Canadian government is bent on implementing it. To understand why there is opposition, it’s time to revisit the Act and see how it will impact Facebook.
What is Canada’s Online News Act?
Also known as Bill C-18, the ONA was first introduced last April. This is Canada’s answer to Australia’s Bargaining Code. Some think that this Act is simply a mere rehash of the Australian legislation. However, many believe that this is an opportunity to learn from the former’s mistakes.
Prime Minister Justin Trudeau tabled this Act, which compels Meta and Google to forge a deal with the country’s broadcasters and publishers. The ONA also tries to exempt publishers from sections 45 and 90.1 of the Competition Act.
Here are some of the expected outcomes if the Act is implemented.
- Flexible regulatory framework facilitating relationships between digital platforms and news outlets
- Sustainability of online market innovations and press independence
- Diversity of the country’s news landscape
The Canadian government believes that the advertising market has become one of the most vulnerable sectors following the COVID-19 pandemic. Without external help, the economic catastrophe will have a serious adverse effect on the sustainability of the news industry, as more media outlets and newsrooms will close and see more layoffs.
Is Canada’s ONA similar to Australia’s News Media Bargaining Code?
Canada’s ONA may be similar to Australia’s Bargaining Code, but these two legislations have notable differences. They’re similar because they both compel social media companies to pay news publishers for content.
However, they differ in the following instances:
- Canada’s ONA demands more transparency in big tech-media deals.
- Under the ONA, a regulator will use objective criteria to determine which companies will be subject to the ONA rules.
- In Canada, the government won’t participate in designating ONA-subjected platforms.
- In Australia, news agencies have collective bargaining rights to negotiate with Meta, Google, and other social media platforms.
- In Canada, Meta and Google must contribute to the existence and sustainability of the free press.
Impact of the Implementation of the Act on Facebook
Just like their stand on Australia’s Bargaining Code, Meta is against Canada’s ONA. This time, they’re citing unjust enrichment as their ground. The text of the legislation leads to the conclusion that the rationale of the law is good. However, the implications for the affected parties are not wholly positive.
Here are the perceived implications based on Facebook’s opposition:
Facebook would pay millions of dollars to news content publishers
Facebook would pay CAD 100-150m, or around £88m, to news publishers on the platform once the Act takes effect. According to Facebook, the news is not a significant revenue stream. Therefore, making them pay for something that doesn’t generate income is unconscionable.
Unjust enrichment of the publishers to the prejudice of Facebook
According to Facebook, the Canadian government’s plan is misguided. They have been helping publishers reach a vast audience for free, which is estimated to cost CAD 230 million. This is the amount that publishers should have paid Facebook for their service. Facebook thinks that they’ve been prejudiced because of the setup mentioned above.
According to Meta, the Act presumes that only they benefit from news content. However, considering that such content represents only a small fraction of what users see in their feeds, that’s definitely not the case. Local news organizations post content to the site to reach their target market, monetizing content and selling more advertisements.
Unprecedented financial liability
Facebook also says that implementing the ONA would force them to pay publishers for the content they post voluntarily. What would happen is that content publishers would post unlimited content, and Facebook would pay for all of them.
This scenario encourages news agencies to ask for payment for the content beyond its fair value. It’s akin to pursuing an arbitration procedure purposely skewed in favour of the news agencies. Furthermore, Facebook argues that this process completely ignores the financial value they bring to the publishers. It also disregards their existing investment in the country’s news industry.
Stifle innovations
Facebook said they don’t have an issue in following grounded regulations. However, they think that the ONA can stifle innovation in the sense that it can make the transition to digital media challenging.
Moreover, the Act doesn’t promote collaboration. Instead, it gives news agencies unprecedented control over how Facebook should operate many of its features and products. Apart from that, it also offers news outlets opportunities to seek commercially fragile information on Facebook’s products and services.
Furthermore, Facebook believes that the Act affords news organizations an unfair advantage on the company’s product changes, notifications, and service updates. No business should have this advantage since it won’t be available to other users and content creators.
Restrictions on Media Digitalization Should Be Just and Humane
Digitalization of media is a process that has been taking place for over a decade. It will continue to change the way people consume information. Consumers should expect to see more options for obtaining information and entertainment.
While restrictions are necessary to stabilize the industry, they shouldn’t be a tool to unjustly enrich another individual or entity.
Whether you’re a private citizen or a business entity, if you need legal references, check out Conventus Law. You can learn more about legal operations and investigations on various areas such as personal injury law, corporate law, family law, and cybersecurity.
