There Is No One to Cheer for in the Clash Between Tech Titans and Canada’s News Media

Meta’s blocking of Canadian news is a direct response to Canada’s Online News Act, which mandates major tech firms pay local news organizations for using their media links. But the “link tax” furor underscores a deeper issue: media ownership and control.

Meta is blocking access to domestic news in Canada. (Paco Freire / SOPA Images / LightRocket via Getty Images)

Meta, parent company of Facebook and Instagram, has started blocking access to domestic news in Canada. This move by the tech behemoth is a direct response to the recently passed Online News Act, set to take effect soon. The act mandates that major tech corporations pay Canadian news organizations for the use of their media links. Google has also entered the fray, issuing a similar ultimatum.

If the rationale behind compelling tech giants to pay for the right to link to media outlets seems perplexing, you’re certainly not alone. This concept has been labeled as a “link tax,” a label that the tech sector has embraced to highlight the paradox of taxing a link which ostensibly should bring value to the linked media outlet.

Had the government been able to shape the narrative, a clearer understanding might have emerged regarding the regulators’ aspirations for the legislation. In the minds of its authors, the Online News Act will serve as a mechanism to safeguard Canada’s media landscape while prompting major tech giants to contribute their share to the national tax pool. The legislation is similar to a law passed by Australia in 2021 — which Meta and Google also fought — and to bills in development in California and in the US Congress.

Plutocratic Peter Paying Filthy-Rich Paul

The idea behind these bills is that Meta and Google ought to compensate media for not just benefitting from linking to outlets, but also for stripping away advertising from traditional publishers and crushing what was left of the private journalism market. Moreover, since companies like Meta and Google pay little to no tax in Canada and extract billions of dollars in ad revenue in the country, it’s not unreasonable to require them to contribute a bit more to state revenues. Now, all of that makes more sense, but the solution to this complex issue might extend beyond the scope of Australian, Canadian, and American efforts.

The development of Bill C-18, which became the Online News Act, was a mess. The process was marred by poor conception, inadequate communication, and flawed execution, with successive ministers grappling with the intricacies of the file over recent years. The challenges posed by the bill point to how confusing the issues at hand are and signal the need for a reevaluation of our approach to revitalizing journalism.

There is something perverse about the government collecting tax revenue from one set of billionaires to hand off to another — as was the case in Australia, where Rupert Murdoch’s News Corp and his lot made out like bandits. In Canada, Postmedia, a would-be major beneficiary, and supporter of the law, is majority-owned by an American media conglomerate. The legacy outlets have an advantage in negotiating under the Online News Act system. It’s no wonder they like the law so much. It will keep them entrenched. It may also, incidentally, keep the tech giants entrenched.

Breaking the Big Tech Oligopoly

In 2020, Paris Marx wrote a critique of the link tax approach in these pages. He drew on work by Cory Doctorow to point out that by setting up Meta and Google as significant sources of income for legacy media, the government would be creating a dependence relationship that would entrench the big tech oligopoly. Not that Meta and Google love having to pay more money, but they do love regulations that act as barriers to entry for other firms and maintain them as necessary parts of the marketplace and body politic. This is especially true when these tech giants can dictate the terms and boundaries of such regulatory arrangements.

“The tech giants should be taxed, their monopolies broken up, and their power should be reined in,” Marx wrote. “But we shouldn’t put in place an infrastructure where Google and Facebook are directly paying news publishers. There are much better ways of organizing alternative funding models for media that much better serve the public good and journalists themselves.”

The entrenchment of the big tech monopoly is a point that’s been largely forgotten in the national debate around funding media, but it’s an important one. So is the corollary point, that the market is inherently inhospitable to private media and trying to prop it up with heavy-handed intervention misses the broader need for a public alternative.

In the same year Marx leveled his critique of the Bill C-18 approach, Victor Pickard wrote that “commercial journalism never fulfilled all of society’s democratic needs, but now it’s abundantly clear that the market can’t support the bare minimum levels of news media — especially local, international, and investigative reporting — that democracy requires.”

Journalism is essential to democracy because it safeguards accurate information flows, preventing the rise of misinformation and disinformation that thrive in the absence of robust media. As journalism declines, it becomes harder to hold governments to account and inform population of their rights. Dodgy behavior by state and private actors thrives in the dark. Norms decline. However, a healthy journalism industry that serves the public good presupposes a media that is not bought and paid for by a corporate elite, driven by market imperatives of maximizing profit and underwriting liberal and market orthodoxy.

Wrestling Free Market Media for a Democratic Future

Insofar as journalism is in a state of market failure, and because it’s a critical public good for a democracy, the role of the state in supporting it through public means is central to preserving self-government. The state has long supported journalism through a variety of measures, particularly through large advertising purchases. In Canada, since 2019, the government has also offered a large, and popular, refundable labor tax credit. Outlets also have the option of becoming nonprofit organizations, though few have taken that route.

Pickard wrote of a strategic approach to a healthy public media comprising five elements, including noncommercial, nonprofit, and publicly funded media; the dismantling of concentrated media outlets; establishing publish service obligations for publishers; building up media cooperatives and worker-control or owned enterprises; and establishing better and more diverse newsroom governance and oversight.

As Pickard notes, “Any path toward reinventing journalism must acknowledge that the market is its destructor, not savior. Commercialism lies at the heart of this crisis; removing it could be transformative.”

As Meta and Google threaten to limit Canadian access to domestic news, it’s imperative to heed the insights of Marx, Doctorow, and Pickard. Yet, we must transcend the surface-level clash between government and tech giants over linking payments, delving deeper into the crux of the issue: Who owns and controls media in Canada, and in whose interest do they operate?

A diverse, pluralist, public-spirited media landscape encompassing a blend of public and cooperative or worker-owned outlets offers a transformative vision for journalism. Such an approach has the potential to transcend the pitfalls of a market-failure narrative and the tech-reliant corporate oligopoly that has marred contemporary media. This is the debate we need to be having as we imagine what journalism and democracy ought to look like in the long term.