Ottawa has made it clear to big tech — fall in line with Bill C-18, the Online News Act, or get lost.
If the controversial legislation passes the Senate, Parliament would compel Google and Meta to pay for Canadian journalism that helps the companies generate revenue.
As an apparent protest move, Meta announced on June 1 it would block up to 5% of Canadian users from temporarily accessing and sharing select news content.
In February, Google blocked 3.3% of Canadian users from viewing news links for five weeks. It impacted more than 1.1 million IP addresses.
Meta said it is prepared to permanently end access to news content in Canada if Parliament passes Bill C-18, which would require tech giants to pay media a portion of their ad revenues from linked stories. Google otherwise seeks a compromise with Ottawa.
However, Trudeau has made it clear a compromise is not in the cards.
"The fact that these internet giants would rather cut off Canadians' access to local news than pay their fair share is a real problem, and now they're resorting to bullying tactics to try and get their way,” he told reporters on June 7. “It's not going to work,"
Each company proposed amendments in the Senate, including tweaks on which publishers they would enter into revenue-sharing agreements with. Google expressed concerns with publishers having no obligation to adhere to a code of ethics.
"We're very concerned about the path we're on and we're doing everything we can to engage constructively and avoid a negative outcome for Canadians," said Google spokesperson Shay Purdy, clarifying the company wants to increase its investment in Canadian news.
But Heritage Minister Pablo Rodriguez claimed the legislation is already balanced.
The prime minister also said his government would not allow big tech to ‘bully’ the domestic media industry and weaken Canada's democracy.
"We will continue to make sure that these incredibly profitable corporations contribute to strengthening our democracy, not weakening it."
Paul Deegan, CEO of News Media Canada, said Meta's move to limit 5% of Canadian users from viewing and sharing news a "kick in the shins."
On May 30, Deegan testified to the Senate Transport and Communications committee on Bill C-18, calling Meta's decision to 'unfriend' Canada by denying access to ‘trusted news sources’ is “irresponsible and tone deaf."
He warned that if Facebook permanently blocked news sharing, it would restrict public access to reliable information.
"What would be left on their platform? They're the plumbing of social media, and you have clean drinking water, which is news. But then you have all sorts of sewage: the misinformation and disinformation," he said. "What this bill is about is ensuring that local news survives."
Big publishers have told a Senate committee currently studying the bill that they could lose millions of dollars should their content be blocked by Google and Meta.
Rachel Curran, the head of public policy for Meta Canada, told senators in a committee last month that the company objects to compensating media for sharing news content. She claims the company gave media over 1.9 million clicks in Canada in the past year, or "free marketing worth more than $230 million."
"We will be forced to compensate news publishers for material that they post to drive traffic and drive clicks back to their page and websites," said Curran. "We are being asked to compensate them for an activity that actually benefits them from a monetary perspective."
She suggested media outlets could implement paywalls or place ads on written copy to monetize traffic to their websites.
Meta and Google argued news content doesn't generate much revenue for their companies, with news sharing constituting 3% of Facebook content and less than 2% of Google searches.
Should Bill C-18 pass, both companies have considered ending access to local news on their platforms altogether.
"We need them," said Deegan, on account of the "market failure" caused by dwindling readership and revenues.
"We need a solution, and that's why we've come to the government even though we would like to stay as far away from the government and the CRTC as possible. But we do need them," he told senators.
The CRTC would determine which outlets would qualify for revenue-sharing agreements, according to Blacklock's Reporter.
Since 2019, Parliament has subsidized outlets deemed "qualified" by the Canada Revenue Agency, worth up to 25% of the annual payroll or $13,750 per newsroom employee. The $595 million bailout program expires on March 31, 2024.