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Holding Up the News

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Meta has silenced news organizations’ social media accounts in response to Canada’s Online News Act, a law not yet in effect. Josh Braun describes the reasoning behind such legislation, its potential flaws, and how Meta, particularly Facebook, has turned the Canadian wildfire crisis into a regulatory pressure campaign.

Editor’s note: To increase public awareness of capture in its various forms, ProMarket is launching an ongoing series in collaboration with the Stigler Center for the Study of the Economy and the State to highlight topical examples, explain what capture is and how it impacts us all.

Here are a few anxieties of a digital age: We worry about whether the people who control our channels of communication might also exert undue influence over the content we see. We worry about whether the folks who produce cultural goods will get remunerated for their work rather than seeing all the value of their labor accrue to intermediaries. We worry whether the for-profit corporations that increasingly own the online spaces we treat as “public squares” will appropriately balance civic responsibility against their bottom lines. We worry whether, amid the sea of content suggested to us, we will get the information we need. We worry about whether the civic institutions on which we have traditionally relied, from public transit to local news, will be bled to death by disruptive business models that don’t ultimately deliver the same public goods. We worry about whether the companies that inspire these anxieties have become so big and powerful that they’re no longer responsive to us as individuals or even to the people we elect as our public representatives.

And, sometimes, in a crisis we worry about all these things at once.

Communities across western Canada have recently found themselves subject to evacuation due to the hundreds of out-of-control wildfires raging there. The fires are unprecedented in scale — “about three times as much land as has burned in the worst American fire seasons of the last 50 years.” And as Canadians turned to social media, as we so often do today, for the latest news reports on the terrifying situation, they couldn’t find them. Starting in August, Meta had begun silencing news organizations’ social media accounts across its social networking platforms, Facebook and Instagram. The feeds still existed, but if you logged in from anywhere in Canada, you simply couldn’t see them. They didn’t exist for you. Nor did links to news stories shared by your friends.

The social media giant, which made over $91 billion in profits last year, was blinkering these accounts in reaction to the passage of Canada’s Online News Act, which requires a platform of Facebook or Google’s unique size to pay news organizations a fee when its services display links to their content. The act is not yet in effect, nor have its final details — which are to be worked out in dialogue with the tech giants — been negotiated. So Meta’s decision to yank news from its platforms in a time of crisis amounts to a hardball negotiating tactic aimed variously at generating public and industry sentiment against the law, forcing regulators to introduce loopholes (as happened with similar legislation in Australia), or both. It’s also worth noting that, ever since the massive criticism Facebook faced for its handling of the United States’ 2016 presidential election, Meta has increasingly wanted to distance itself from the perception (or the reality) that it’s a news provider — the prospect of getting out of the news business altogether no doubt has some appeal for them. Whatever the case, Meta’s reaction to the passage of the Online News Act is lousy for users, who are once again left feeling like the product rather than the consumer at a time when they should be treated like citizens and people in need.

To be sure, the Act has its critics, even ones close to the news business. Journalism scholar and online news pioneer Alfred Hermida has pointed out, for example, that the lion’s share of links to news stories point to major publications — the ones least likely to need the revenue — rather than the sort of startups and experimental projects that may be required to repopulate the decimated ranks of local news outlets.

And platforms, of course, will argue that they provide a free service to news organizations by directing traffic, and hence ad revenue, to them in the first place. This sounds like a fair point until one remembers that most of the ad revenue on which news organizations once depended evaporated as a consequence of these same tech companies’ disruption of the ad market. News outlets that once held near-monopolies on advertising, from professionally produced full-page fare to humble classifieds, within their respective geographic regions now face fierce competition for advertiser dollars. In the digital marketplace, they vie not just with other news outlets for this revenue, but with social networks, gaming apps, recipe sites, blogs, video platforms, streaming services, and virtually any other site or app capable of embedding a simple adtech widget.

This dramatic growth in the supply of ad space, meanwhile, has put enormous downward pressure on the price of advertising, turning “analog dollars into digital pennies,” as the saying goes. These same platforms also encourage advertisers to track and target users based on their behavior irrespective of what they may be viewing, removing the incentive to treat publications as proxies for desirable audiences.

It’s against this backdrop that Canada’s regulators have passed the Online News Act, attempting to claw back from the biggest winners in the digital economy some form of subsidy for journalism.

Of course, this is not the first time that new and distant entrants have altered or disrupted a regional media market. Since the player piano began putting local musicians out of work in the early 20th century in favor of music rolls produced far away, more efficient and wider-reaching distribution has often meant economic challenges for local artists and media.

Local news, though, is widely considered a public good and when the market threatens it, regulators should be able to answer back. In the U.S. we’ve seen a long period of deregulation that sometimes allows us to forget this, but as scholars like Victor Pickard are fond of highlighting, the U.S. has been better about considering such matters in the past, even if their record was imperfect. As early as the 18th Century, the U.S. Congress fretted over whether subsidizing postal rates for newspapers would allow publications in major cities to drum regional papers out of the market.

Similarly, in criticizing Meta’s news blockade, Canadian Prime Minister Justin Trudeau argues that “that in a democracy, quality local journalism matters.” That said, Canada’s news market suffers from substantial ownership concentration — hence Hermida’s worry about policies that hand more money over to corporate behemoths than smaller outlets. Fenwick McKelvey, a professor at Concordia, similarly notes that many arguing in favor of the law on the grounds that it will improve local news are either overlooking or directly benefiting from this fact. One such opinion piece, for instance, was written by Jamie Irving, who McKelvey notes is “part of the family that privately owns all major newspapers in the province of New Brunswick with a checkered history of editorial interference and anti-competitive behavior.”

So, it’s safe to say that the Online News Act is flawed legislation, at least if you think the goal should be to reinvigorate local, independent journalism that compensates for the gaps and flaws of concentrated corporate media. At the same time, it’s worth highlighting that Canadian lawmakers have historically done an admirable job of supporting public alternatives, especially the Canadian Broadcasting Corporation.

And, as the CBC wrote in late August, in a letter to Meta, the broadcaster maintains a range of “specific [social media] accounts designed to serve communities in the North and Indigenous Peoples. These accounts are now blocked and the followers cut off from CBC/Radio-Canada postings, including emergency information.”

Though one can argue that the CBC — as with many news outlets — has become overly reliant on Facebook, in general the public service broadcaster makes for a sympathetic player in all this. They’re obviously not looking for a profit windfall and their main complaint is that their emergency messages aren’t getting through to communities in imminent danger.

Meta’s response has been rather tone deaf, noting that people can use its Safety Check feature to access emergency information from government agencies and tell loved ones they are out of danger. This doesn’t answer the CBC’s concern as to how people will find out about the danger in the first place — the closest Meta comes is to mention that they are boosting information from Red Cross Canada, which is not a news agency. Meta’s letter also highlights the platform’s efforts at media literacy education, which the company argues might encourage people to visit news websites directly. It closes by curtly arguing that Canadians have brought this on themselves: “We have been clear for many months that the broad scope of the Online News Act would impact the sharing of news content on our platform.”

What makes all of this read as especially petty on Meta’s part is that the Online News Act doesn’t even take effect until the end of the year at the earliest and it’s quite likely that fees won’t be assessed until 2025. While the company might argue that it’s simply moving into compliance earlier than necessary, its decision to begin blocking news accounts months ahead of the law taking effect feels far more like a (well rehearsed) pressure campaign aimed at forcing regulators to fully or partially reverse course.

As Vox journalist Sara Morrison explains, what Meta really wants to avoid is a situation in which Canadian regulators win this game of chicken and other nations, buoyed by this success, begin piling on, passing their own versions of the law across the globe.

But while the CBC, like most news organizations, might prefer that Meta get on board with a link tax, its request to the tech giant is far more humble than that. They’re asking for a limited exception in which the platform would let local news through to audiences in crisis situations.

Rebuffing even this seems like sour grapes on Meta’s part. Putting aside the question of whether Meta could afford to pay link taxes on news in hundreds of nations, it can certainly field the expense of displaying news items during public emergencies. If one of the world’s 20 most profitable companies can’t live up to such a low bar for public service, it deserves the ridicule it receives as a result.

The author would like to thank Fenwick McKelvey for thoughtful notes on a draft of this essay.

Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.

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