Google and Meta Are Fighting with Canada
Paris Marx is joined by David Moscrop to discuss Canada’s plan to make Google and Meta pay news publishers, and what might happened now that they’re threatening to pull Canadian news from their platforms.
David Moscrop is a freelance writer and the author of Too Dumb for Democracy?: Why We Make Bad Political Decisions and How We Can Make Better Ones. Follow David on Twitter at @David_Moscrop.
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Paris Marx: David, welcome to Tech Won’t Save Us!
David Moscrop: Thanks for having me.
PM: Absolutely. It’s great to have another Canadian on the show, and discuss some Canadian issues. It’s been a little while. Canada doesn’t always have big tech things that I feel like the world needs to know about. But I think this one is something that people are watching, and so it’s good to have you on the show to chat about it.
DM: Oh, it’s good to be here. And you know what’s great about this Canadian issue is for once it’s a Canadian issue that actually matters for the rest of the world. So it’s not just a little parochial Canadian thing. It’s actually a front on the global battlefield on the future of tech. It’s a twofer.
PM: Absolutely. That’s what we like. Let’s dig into it. I’m sure people maybe saw some stories recently about Google and Meta threatening to pull news in Canada, and that’s in response to a recent bill called C-18, or The Online News Bill. How would you describe this to the audience, and what is the motivation behind it?
DM: The idea had originally come from Australia. And the premise behind it is the government is going to induce the big tech companies, which is largely to say Meta and Google, to pay money to support, primarily, legacy media. They’re going to do that by forcing them — that’s what it is, compelling them — to sign agreements with these media companies, either bilaterally, or if the companies prefer, multilaterally to support journalism in the country. And the whole thing is backed by this primary premise that the transformation of digital technology, and digital media, has eroded the traditional media advertising model, which was never perfect. It was never enough for some media outlets. But since the arrival of Google and Meta, it’s effectively fallen out. Now they get the vast majority of the ad dollars. The media companies don’t get to do that; they don’t get to run classifieds anymore. They need some money, and there’s a whole giant pile of money over here. So the government is going to ensure that they get some of theirs.
PM: I think that’s a really good way of describing it. Basically, the government is looking, seeing that there’s all this cash and these foreign tech giants that dominate how we interact with and access information these days. We also see on the other hand, that the journalism industry in Canada, but in many other parts of the world, is really struggling right now. So they’re saying: Okay, how are we going to address this? They also see the example of the Australians who did it back in 2021. It’s worked out decently well down there, but I would also say the other piece there is that the media are pushing for this, as well. They also see what came out of Australia and want to move forward with that. Can you talk to us a bit about what is going on in the Canadian media right now, the difficulties that it’s facing, and why they might want to replicate this Australian model that we have seen already happened down there?
DM: The Canadian media, usually, I’d say is a shit show, but it’s actually a shit show with some green shoots. I don’t want to erase the fact that there are a number of great independent, typically, incidentally, left independent media outlets who are doing very, very good work. They are the green shoots. There are independent places that aren’t taking federal money, they don’t want fed money, or they don’t want Google, Meta money. They’re making a go of it largely, in some cases, primarily through the support of their patrons and readers. So, that’s Group A. There’s group B in the middle, and then there’s Group C, which is the legacy outlets. That’s the big, shit show. It is a bunch of large corporations, who — as large corporations want to do — wish to extract as much value from both the public and the State, as possible. So, this is one way of doing it. Those legacy outlets in some cases are, say, owned by a foreign hedge fund. They may be trying to merge with others, as is the case right now with Postmedia, and NordStar who owns the Toronto Star. So now they’re trying to effectively reduce the ownership to a couple of companies.
PM: Absolutely. It’s probably worth saying there that the media industry is already heavily consolidated. Postmedia owns many of the newspapers that are left. The regional or city newspapers that are left, as well as some national ones like the National Post. And then NordStar, as you say, is the Toronto Star and some other ones. But they have also in the past few years been swapping newspapers to close them down. There’s already been this process of further cuts to Canadian media, and their merger is looking at furthering that again.
DM: Exactly, and they talk about: Well, it’s good, more efficiencies and blah, blah, blah, but we know what’s going to happen. People get fired, and they’ree going to shut down newspapers. That’s what happens every single time this happens. So that’s what they’re doing. But in the meantime, they get to try to extract a lot of value. Keep in mind, the State already supports these outlets in a number of ways. There is a journalism funding program, I should say, they can apply for it. There’s a massive labor tax credit that they can apply for; they absolutely love and need this. With the Google and Meta money on top of all this, we’re reaching a point — we may have already passed it actually — where over, say, half of the editorial budget for a legacy outlet is coming from handouts from the State, and from Meta and Google. To put that in perspective, now, these companies absolutely need these deals because they require them to operate. They want the money because if not, they can’t afford to operate. Incidentally, the same newspapers, in some cases — looking at you, Postmedia — that will turn around and bitch about socialism and lazy workers need to get off their ass to go and blah, blah. Meanwhile, half their costs are funded by, give or take, by other companies and the government. That’s the state of the battleground right now. Irony is not bad, or maybe it is.
PM: It’s in a really bad place. It’s fascinating you say that, because Postmedia is largely this right-wing media chain that really loves to support conservatives, yet, loves the public subsidies for their business model to keep them going, and keep funding, as you say, the US hedge fund that owns them, and that loaded up with debt, and it’s using a lot of that money to pay back.
DM: I’ll say it people loves when that happened. People have said: Well, you know, it’s capitalism for the poor and socialism for the rich. And I’m like: No, no, no, no, that’s just capitalism. That is how contemporary capitalism operates. It’s very much an extractive industry, where these private for-profit corporations are taking everything they can from their workers, but also from the State, while also saying that workers ought to not be so lazy and take so much from the government.
PM: An essential point. I was just going to add, as well, that maybe people who aren’t Canadians would not be familiar, but Canada also has quite a history of cultural protectionism. And the idea that your media is going to be owned by foreign entities is not something that is very familiar in Canada, and same with telecom companies and things like that. We generally don’t allow much foreign ownership of those sorts of industries. But in the case of Postmedia, the reason why it’s owned by this US hedge fund — or largely owned by it — is that the previous government, before Justin Trudeau was in power, was Stephen Harper’s conservatives, and they were the ones who allowed that deal to go through because usually something like that would not have been approved. And so that is another reason why we’re saddled with the situation that we’re in today.
DM: There was a long battle in Canada — prior to the free-trade agreement, and then the North American Free Trade Agreement of the 80s and 90s — where there was a media backlash and an intellectual backlash and a political backlash against opening up the country because the argument was: Well, as soon as you do that, the Yankees are going to swarm in and we’re just going to become the 51st state. And that was what animated a lot of people. Mordecai Richler was incidentally, on the other side of that. I will tell you a great little Mordecai Richler story. He was once on CBC debating Rick Salutin on free trade. Salutin was a cultural protectionist and Mordecai Richler says: If free trade means that the dubious wines of the Niagara region will be displaced by the much more palatable wines of California, then I’m for free trade, because there’s only so much I can drink from my country, of the Napa Valley. So that’s why Mordecai Richler was open to free trade.
But that was the battleground, and that was, for a long time, the struggle: Canada was to be preserved, we need to resist the Americanization of the country. I think, particularly, once the internet really caught on, that was just over. There are remnants of it, Bill C-11 , which was a bill that was trying to boost Canadian content in the country by requiring platforms and streaming services to surface that content. A bit of a reflection of that cultural protectionism. But, by and large, that war is over and the open market, Americanization has probably won.
PM: There was a lot of that push back to Bill C-11, which is also called the Online Streaming Bill, which essentially updates existing broadcasting rules that we’ve had for decades in Canada, that say: Broadcasters need to show a certain amount of Canadian content and need to contribute to a fund where it’s helping to create more Canadian content. Now, streaming services need to abide by those rules as well. And we’ve yet to see exactly what that is specifically going to look like because we’re still waiting on the regulator to release the final rules. But you could definitely see that in the argument of the debate that was happening around that bill as well. Where you had a lot of people who are defending the idea of extending these regulations to streaming companies, because this is the way it works in Canada.
And a lot of people saying this doesn’t make any sense. Why are we still having Canadian content requirements, etc. etc.? You can see that that fault line is still there, and it’s still present, which makes sense when you’re a country that is next to such a large cultural superpower, like the United States. But we are also recognize that most people in Canada are watching a ton of American movies and TV shows, and watching CNN and MSNBC and all that stuff, all the time. Maybe even more than they’re watching CBC or CTV. Unfortunately, that’s just the reality that we find ourselves in.
DM: And it’s been a long time coming. I was sort of torn on that. It’s going to depend on what it looks like, and we just don’t know, as you mentioned, what it’s going to look like yet. There was a real kerfuffle because a lot of the opponents said: Are you going to apply this to individual content creators? Because some of these folks have massive audiences and if they’ve got millions of folks who are tuning into them, are you going to apply to them? And the answer was: No, no, trust us. We won’t. And they’ve since said: No, no, we won’t. But that is a regulatory decision that could change. So there was concern over individual creators and how it’s going to affect them and a lot of anxiety there. But it does speak to this idea that the country is still nervous, at some level, about creeping Americanization. And probably always will be, even though it’s pretty much happened.
There’s a few bulwarks, the Canadian Broadcasting Corporation, the state broadcaster, is one of them. Also, it’s a battlefield. But the Online News Act has now gotten to the point where the battle has shifted to the future of the internet as it relates to these massive tech companies who don’t want their turf further impeded on. And so you can draw a line between that cultural battle in the free trade battles all the way through to this current battle, where — as I described in a Substack post I wrote — is a turf battle. And it’s the newest turf battle, but a pretty big one that could then set the stage for further battles, like Australia set the stage for this one.
PM: Absolutely. Just to pick up on a couple of things you said about the streaming bill as well. I would say, I was very supportive of that, because I love the idea that we’re going to force these companies to show Canadian content, even if Canadians don’t want to watch it, but at least it’s there. And it’s being promoted in the home pages and whatever. Because I think that’s important for some stupid reason [laughs]. But I also find it interesting, though, to look at the streaming provisions. Obviously, this is moving forward in Canada, we’ve seen it moving forward in France as well, where they’re doing something like that. In the way that we’re kind of copying what the Australians are doing with the News Bill, I saw a few months ago that the Australians are like: We’re going to look at some Australian content requirements on streaming services. It’s like: Ah, maybe they’re copying us a little bit, too, with that one.
But the other thing I was gonna say, because you mentioned the CBC, was that we do still have the public broadcaster, which, obviously the US has PBS, and NPR and things, but it works a little bit differently. CBC, I think it’s fair to say, is much more influential in Canada than those broadcasters will be in the United States. But the other piece of it is — and I was talking to some people in Germany about this as well recently — is that I feel like on the CBC, you get a lot more US news that they are covering on it. You get them even framing Canadian news, much more through Americanized lenses than the lenses of Canadian issues. And when I was talking to folks in Germany, they were like: Yeah, we see that in our news as well; our news is always talking about Trump and whatnot instead of what’s happening domestically. You see that bleeding, I guess, even into the local news. The stuff that’s supposed to be representing the non-US country, that is not the US media necessarily, but is still picking that up.
DM: And to give listeners a sense of scale, a couple of years ago, CBC, through appropriations from the government and through ads — because they run ads — and through subscriptions, surpassed, for its budget, all of the newspapers in the country combined. So it’s big relative to other media spaces; it’s quite big. So it’s central and has been a unifier for nearly a century, created by a Conservative Prime Minister in, I think, the 30s. So it’s been a big unifier, and largely has been seen as a bulwark against this creeping Americanization. Yet, it’s also in many ways been captured by that same Americanization. At the same time that local news has increasingly atrophied, and some people like me, make the argument that CBC ought to pivot or focus more and more on local news, for instance.
So that’s another frontier of battle. But it also ties back because now people search for CBC on Google as soon as that comes into effect. But that context is important because the news battle we’re having here is once more a function of an Americanization of the country that’s causing local consternation, because Meta and Google are multinationals, American companies, who are now shaping the way, once more, that Canadians get or don’t get their news. There’s a real sense among many people that we’re getting pushed around by outside forces who have no business telling us how to live. And what it’s doing is undermining our sovereignty. I know it’s a shocker for the listeners, that a multinational may try to undermine the state sovereignty. But here we are.
PM: Absolutely. These are concerns that many countries, I think, outside the United States have, as well. When we look at the American tech companies moving in and increasing their power around the world. And I think that this is something that we’re going to come back to and talk a little bit more later. But obviously, we talked about how the Liberal government under Justin Trudeau is pushing this news bill. What would you say have been some of the biggest concerns that people have levied about this approach that the government has taken by framing this issue in the way that they have in approaching it in the way that they have?
DM: I think framing is the right way to put it, because I have a feeling that if you ask most people, they would be more or less fine with these tech giants paying a little bit more money to compensate the country, the media, for the value that they extract. Let’s look at this from a political economy angle. These companies come in and they extract a tremendous amount of value from their workers, and from the State through infrastructure, and through other programs. They pay very little taxes, if not none. And then they extract value from their users as well who are, in effect, part of their product. And they collect their data and use that to build patents, and they make more money. They further entrench and they further monopolize, oligopolize. They keep their competitors out, and they do that on the cheap. So we come along and say: Well, maybe you should give a little something back, because you’ve taken an awful lot. So that’s the logic behind wanting a little bit more. And by the way, you’ve also destroyed journalism, which is essential to democracy and the process, and we think you should pay for putting it back together.
PM: And that’s not to mention the broader concerns that exist around Meta and its platforms, Facebook and Instagram, and the disinformation and misinformation and stuff that circulates on those platforms that lead a lot of people to believe really wacky things. I’ll just give one example. Obviously, I think listeners will know that we have a carbon tax in Canada, but it’s not equally applied across the country because some provinces were allowed to set up their own unique systems that are not the Federal Carbon Tax. And so where I live in Newfoundland, it’s one of the Atlantic provinces on the east coast of the country, our province recently took away their local measures and accepted the Federal Carbon Tax. That just applied on July 1st, on Canada Day, it came into effect.
There were a lot of people in this side of the country who thought gas prices were going to go through the roof, because this carbon tax is being applied. When actually what happened was the provincial carbon tax of .11 cents came off of gas, and the Federal Carbon Tax of .14 cents went on to gas. So it was an extra three cents a litre, which is still more, but it’s not huge at the end of the day. But because of how this was talked about, and because of stuff that was going around on Facebook, people thought that they were going to be paying a crazy amount more for gasoline, anyway. That’s probably a bit of a diversion from what you’re talking about.
DM: But it’s an interesting one, and I’m glad you mentioned because whenever someone bitches about this, I remember as a kid, my mom would drive around town looking for gas that was two cents cheaper. And I would think to myself: I think this is inefficient. I sort of say to someone: How big do you think your gas tank is? If you’re driving an F-150, or something like that, and you’ve got a 150 liter tank, whatever. But the whole point is to disincentivize that kind of thing, because it’s killing us all. It’s making life inhospitable, and eventually, our planet uninhabitable. But you got a 50 litre tank, it’s three cents — do the math. You’re paying like $1.50 more at the tank, and if you consume less, and drive less, you get that money back as an incentive to be more efficient. So it’s actually going to serve a lot of people, but you would never learn that from scrolling Facebook.
So the government kind of says: Okay, you’re tearing the country apar; why don’t you give us a few bucks back to help us put it back together? And so fine. A couple of pushback against that is one, the mechanism, which is to say framing it as a charging for hosting media is a non-sequitur. Which I think is compelling, because I don’t like large tech companies. I don’t trust them. But I also don’t like the idea that we’re going to frame this need to pay more as a fee for hosting or linking to media. Because the argument is: Well, this is a service. We’re linking to you. We’re indexing your site on the search engine so people can get to it. That’s like saying we’re paving the road and we’re now gonna charge because we paved the road for you to get where you want to go, that doesn’t make any sense.
Or someone posts a link on Facebook, they’re helping because they’re boosting you and folks click on the link, they now look at your newspapers ads, and they get money from your ads. Or they hit a paywall, they say: Oh, I’m going to pay for this newspaper, because I want this. It’s a weird way to try to sell the tax or the fee, or the levy, or whatever you want to call it, because it just doesn’t seem to follow. So the tech companies, now this is the controversial part, you call it a link tax. That didn’t come from them, that came from civil society, the link tax framing. It was grabbed by industry as a talking GR-PR point. But I still find it compelling, despite the fact that I don’t love these companies, because it does feel like they’re now paying attacks to link to media, which doesn’t make a lot of sense.
Now they’re pushing back against that idea. Of course, the broader issue is they don’t want to have to pay this in every country in which they operate. Australia was the tip of the spear; Canada’s the next little bit, and California is looking at doing this right now. It had hit Congress in the United States, they’re worried that it’s going to spread like a domino. This is a kind of Cold War domino theories come back from. And so they say: We know, we don’t want to be charged to host links in all these countries where we operate, because we have links in all of them. We simply don’t want to do that. So that’s the framing. I think, at the end of the day, the fundamental problem with it, is a problem of framing it as a fee for hosting or boosting rather, media links instead of money that they pay as a cost of doing business in a society from which they extract so much.
PM: Exactly, instead of, as you’re saying, the government has framed this as: You have these links on your websites to news articles. And now you have to pay because those links are on your website. And so they’re saying: Okay, well, we’re just going to take the links off, so we don’t have to pay it now. Instead, you could have said: Listen, you’ve like decimated the advertising revenues of these newspapers, you benefit from having them on your platforms. In some cases, people see the headlines or see parts of the articles, and don’t go to the newspapers. So we’re setting up a framework where you should have to give a bit back as a result of that. But of course, again, the framing gets in the way. And I think that this is also somewhere where the tech companies are pretty crafty with how they come up with the ways to get people on their sides with the opposition to this.
So calling it a link tax and saying it makes no sense to have to charge to link these things, because this goes against the whole foundation of the internet. Or with the streaming bill where the streaming companies saw their US multinationals, it’s not gonna be popular for them to come into Canada and say: We don’t want to show more Canadian content or contribute to making Canadian content. So instead, they’re goingto say: But these influencers that you do like, they might get hit by this. So we should just oppose the whole thing. So they’re very crafty with how they frame these things. But I would say one of the things that I’m concerned about as well — that I saw in the Australian debate, and that I talked about then, when this was going on back in 2020 — was that I also don’t like how you had these media companies, they are really struggling, they do need revenue in order to help to continue to fund journalism. And again, we can discuss whether they’re actually going to do that or send that money to hedge funds or whatever.
But if you make that direct link to Google and Facebook, and you say: Okay, you’re making this deal with Google and Facebook, you have now a new permanent revenue stream that’s coming from Google and Facebook. That obviously creates incentives, not to criticize those companies not to want to jeopardize that revenue stream. Maybe you don’t want to see them broken up, or you don’t want to see some regulations that are going to really impair their advertising divisions or what have you. I think that that sets up a really nasty feedback loop or set of incentives that I feel like is probably not thought about, that the government hasn’t thought through in setting up a framework like this.
DM: What’s what’s interesting is, these deals were happening too. So it’s not like the government is saying: We’re going to start in six months from now after Royal Assent once we’ve passed this bill, and the king is stamped it. It’s so silly.
PM: For people listening internationally, we’re a pretty silly country.
DM: We sometimes are like a Playmobil country. So in the next six months, we’re going to force you to start signing these deals. And we’re starting from scratch. The truth was, these deals had been happening for some time already. Once the government passed the law, Google actually and Meta started canceling the deals that already existed. So not only has this bill not done what it was intended to do, it’s actually undone some of the stuff that had been already happening. So it was a bit of a known goal on the government’s part, as well as vile bullying by the tech companies. I should say here, my frame for this is there are no heroes here at the end of the day.
I don’t really like anybody. It’s hard to like the tech giants. It’s hard to like the government’s poor crafting of the bill. It’s hard to like some of these media giants, legacy folks who are extracting value for shareholders, because at the end of the day, we’re trying to save journalism, but they’re trying to pay bonuses to their bosses and dividends to their shareholders. So I’m just like: Okay, well, I don’t like anybody here; everyone’s bad. It’s like in “It’s Always Sunny in Philadelphia.” You’re meant to hate every character. They’re all meant to be a sociopath, basically, so irredeemable that you’re just disgusted by all of them. Mission accomplished with this. So now we’re left thinking: Okay, well, now, what happens, while cheering for nobody? It hasn’t been a great couple of weeks for media in Canada.
PM: No, absolutely not. I think what you say is so important. I wouldn’t want to lead listeners to think that we’re coming down on the side of the government or anything, because, listen, the government in Canada is not that great. And this bill was not crafted in a way that makes a whole lot of sense. They don’t seem to have learned much from the Australian example. The one thing I would say, to add to what you were saying, now that this bill has passed, and part of the reason that Google and Meta are threatening to pull news from their websites now. Is that, as you say, they were already signing deals with media in Canada ahead of this to show: Look, we can actually do it, we’re going to do it. We want to play nice, blah, blah, blah.
But one of the things that came up when looking at the Australian example, is that the process was not transparent. In the Australian example, the government had set up a particular framework that the tech companies didn’t like. So once again, Meta pulled news off of Facebook. Then the government kind of backed down and watered down the bill a bit, so that they could sign the deals outside of the government framework, and as long as the deals were signed, the government wouldn’t step in and do anything. That meant, though, that the deals that they did sign, were not transparent at all. You had no details as to how they actually worked, or how much money was changing hands or anything like that.
You just had to try to sleuth into and figure out what was actually going on, until the Government of Canada said: We don’t want that process, because we do want to actually know what’s going on here. We do want it to be public and to be open to people. But that is specifically, as my understanding is, that Google and Meta are not cool with because they want to be able to sign their deals in secret, and not have to go through this the public process where these things are more transparent and out in the open. And that is really what they don’t want.
DM: That’s such an important point. I remember talking to someone about housing, which is another area in which this country is fundamentally busted. There’s a push for open bidding for purchasing a house. People are like: Oh, no, it’s great. It’s going to drive prices down, except for it doesn’t. It drives prices way up, because everyone is like: I know exactly how much you bid, I’m going to outbid you. So that’s what happens in an auction, and this is what you’ve effectively created as an open auction. That’s, effectively, what’s going to happen with this bill as well is an open auction. They’re going to say: Okay, well, you signed for this much money with the Toronto Star, we want the same or more because we have a higher circulation. Well, Toronto Star is meant to have the biggest circulation, comparable circulation. Now, the Google and Meta can’t play these companies off one another. At the same time, the bill also allows companies, if they wish, to deal with the tech companies multilaterally, so they could band together.
The multilateral element, both domestically and internationally was something didn’t get enough thought or consideration at any point in all of this. I don’t understand why Canada wouldn’t have from day one been building a coalition of like-minded countries, Australia, New Zealand, perhaps United Kingdom, and saying: We’re going to negotiate as a block, because you can pick us off one by one, but if we band together, you probably cannot. 30 million people that’s a market where you can say: I’m pulling out and you’re on your own. Once you start hitting 100 million, 150 million, now we’re talking about a bigger market share, and we’re talking about a bigger blow to your goodwill bottom-line on the balance sheet, if you start attacking us all. That doesn’t seem to have been seriously considered, maybe because Canada doesn’t have the capacity, which is a different critique. Or they were too inept to consider it, which probably is probably a mix of the two.
So that was point one of the multilateral point. Two is, the media companies could band together and do this too. They could say: Well, we’re all going to come to the table. Because one of the things I worry about with this bill furthermore, is that the big companies can go at it alone and do okay. But the smaller companies, probably not. They’re going to get bullied especially in a closed process. So you need a transparency at the very least. Especially if you’re not gonna have multilateralism at the level of the media companies in this country, because otherwise the small players are going to get completely ruled. And so again, these companies, Meta and Google are trying to protect their turf, because they realize that this is going to spread. Both domestically cost them more and internationally and cost them more if they don’t. Which leads me to think that there’s going to be a climb down from somebody, and that it might end up being the government.
PM: And that’s certainly what we saw in Australia. What you say about the multilateral piece of this, and the small publishers is important, because in Australia what we also saw was that the small publishers didn’t do as well out of this process, or it took them a little while to get included in it. And once they had to band together and actually try to get an agreement with these companies. I believe they got agreements with both in the end, but I’m not 100% sure on that. I haven’t double checked it. And then the other piece on the multilateral side, I think that also shows if you’re thinking about countries working on this together and coming together, again, why couldn’t Canada work with California or these other things too, where they are clearly looking at going in this direction?
Then it makes it much more difficult for the tech companies to pull out in this way. But I think it also shows the degree of power that these companies have where they can really play states off one another or go above the state level, or say: You’re Canada, you’re 40 million people; we don’t care if we cut off your market access, or if we kind of piss off people in your country, because we have all these other markets that are making us a ton of money. I think the other piece of it is that they’ve really benefited as well. I think the tech companies have benefited from a lot of the domestic conversation around this bill, where all the problems with it — and the fact that Google and Facebook are threatening to take the news stories off of their platforms — is being framed in a lot of the coverage and commentary as the government’s fault, and not taking on the platforms, which I think is a real problem, in my view.
DM: It’s real bootlicker stuff. I just don’t understand the impulse to be a bootlicker. I guess it’s, for some, it’s a syllogism. Government: bad; opponent of government: good. Facebook, Meta, and Google are opponents of the government, therefore, they’re good. This is real dumb, dumb stuff. It’s truly kindergarten reasoning. That’s where the conservative part of Canada is. If it’s a government thing, then it’s bad, and that’s about the range of their thoughts from the front office these days. And yet, there’s a bigger, deeper, broader issue here that anyone who thinks about it for a couple of minutes ought to realize is important for them, and for the future. This is power, and the Canadian media and commentariat in this country, the punditocracy, is really, really bad at thinking about and talking about analyzing power.
It almost never shows up in conversation, the same way that class almost never shows up in conversations, because we just don’t have that lens at the ready, even though it’s just obviously applicable to pretty much everything, and it’s definitely applicable here. These companies are oligopolies — even monopolies, by the time we’re talking about Google and their shitty search, which is 97% of the market; that’s a monopoly — who have not only the tendency to extract extraordinary amounts of value from the State and from workers, but also the capacity to dictate terms for legislation and regulation. And to shape what we see, how we see it, how we think. That’s an extraordinary amount of power that even totalitarian states in their day didn’t really have. Because the surveillance power wasn’t quite the same. There is a kind of totalitarian surveillance capacity built into these companies.
And I’m not saying that the same thing as the Soviet Union — I’m saying there’s a big power of surveillance, and that needs to be reckoned with it. Because we farmed out a lot of our lives to these people, and we ought to check that power because whenever power overpools in one place, it tends to lead to domination. I would think that individual citizens — individual consumers, and especially conservatives — would be deeply worried about that concentration of power and monopolization of market because they’re meant to be a opposed to that, if you read them on their own philosophy, and you don’t assume they’re massive hypocrites, which they obviously are. Of course, the left should oppose it, because the left ought to be all about non-dominance, especially by big market players. Yet people are kind of like: Wow, I don’t know, the government versus, I gotta pick one side. I’m a big fan of turning around saying: I don’t like any of these people.
DM: And then pivoting back to: Okay, well, then how do we solve this problem so that consumers don’t get dominated and the media infrastructure in this country doesn’t fall apart so we can actually have a democracy? I think it boils down that question of: How do we preserve democracy and sovereignty, at the end of the day? In a world in which there are these big tech players. And then we get into a conversation about results. We’re still in this fingerpointing stage. And then eventually we’ll tumble into the results stage, but by then the government may well have climbed down because they don’t like the bad press. And incidentally, they’re facing the prospect of an election in the next 18 months or so. And a cabinet shuffle that may happen any day, now.
PM: I think you’ve put it so well. I am not super comfortable with Canadian nationalism, and what does that even mean? But I think that when we’re looking at a situation like this — as much as I disagree with the process that the government has pursued, and as much as I don’t really like the government that we have in power — I think that they are at least going in the right direction, where they’re trying to take on these US multinational companies that have really dominated what Canadians do online. I think you were talking about free trade earlier, and this view and concern that Canada and Canadian industry or the Canadian economy was going to be taken over by US companies.
I think one thing that we took our eye off of through the 90s, and the 2000s, and I guess the 2010s, as well, was how the internet expanded, and we all went online. That was all wonderful and beautiful, and great. But in the process of doing that, as the internet expanded into Canada and around the world, it brought us companies with it. US companies dominate — whether it’s Google or Facebook, or Amazon, or whatever — they dominate what we do online. Whether it’s shopping, or watching stuff, or searching for information, even the notion that we would have a Canadian company that would be able to provide an alternative to that or be able to push back on it is just unimaginable to most people. And certainly that the government might be involved in trying to support something like that, and pushing back against US companies.
I think that’s something that we lost as the internet was expanding, and as we were in this era of globalization. I feel like: Listen, the Trudeau liberals are not going to lead us to some nationalist renaissance or anything like that. But I feel that one thing that we’re getting with the debate around this bill, and the streaming bill previously, is a larger conversation, hopefully, around what role should these us tech companies play in Canada? And to what degree should they be able to set their own rules, and to what degree should they have to follow the rules that we set if they want to operate in our country? That’s why I feel it’s really important right now that, with these tech companies threatening to take the news off of their platforms, as much as I don’t like the bargaining process that the government has set up, I feel like it can’t step back at this point, because then you’re giving these major US companies another win against us, and showing that we can’t stand up to them.
DM: I genuinely don’t know what’s going to happen, there’s a lot. If I had to hypothesize based on past data, my gut says the government might climb down, they might say: Okay, fine, we’re going to try to get a little closer to the Australian legislation. We’ll cut you a break here or there. There’s still several months before it comes into effect. Because I can’t see them saying: Okay, well, you know what? We’re just going to let the chips fall where they may and hope that traffic comes organically from people typing in the URL, or people using DuckDuckGo, or Bing or something like that. I just don’t see that happening.
So I do expect them to climb down, maybe with a new minister, because I have a gut feeling that Pablo Rodriguez who is the Minister of Heritage, who had shepherded this bill forward, might be on his way out. If I had to bet, I would say he might be on the endangered list. But I have this feeling that at the end of the day, Google and Meta know that this model has stuck. That this is going to be a model that’s picked up here and there and maybe eventually everywhere they operate, especially if California decides to pick it up. So they’re fighting a rear guard action right now against the expansive iteration of that model, so that they can limit how much is going to cost them even though it’s going to get picked up elsewhere. Because I do think it might.
If Australia was the initial test of the model, I think Canada is now the test of just how expansive that model is going to be before it starts spreading elsewhere. And I have a feeling we’re gonna fold because we are a people who fold on this stuff. The Trudeau government, they’ve got enough guts to do something but not so much guts that they’re going to do the big thing and then stick behind it. That’s my sense. I could be wrong, I’d be happy to be proven wrong, but I kind of think I’m right.
PM: I agree with you. I don’t think that the type of people to really kind of take this battle and continue with it. I would like to see that happen. I would like them to say: Listen, you’re operating in Canada; this is how it works here. Follow our rules, or get lost. And I think that might not work well for them because, unfortunately, a lot of the Canadian media and the commentators have taken the side of the tech companies, which baffles my mind, but they have.
So that might result in a lot of negative press, especially once the news articles are taken off. And people are like: Why can I access this on Google and blah, blah, blah? I do think there’s plenty of reason to believe that people would still find other ways to get their news and stuff. But it would take a bit of adjustment. And the adjustment period would be a bit messy, I think. I would just say as well, just to maybe add a bit of information that I don’t think we’ve given out in this conversation yet. The estimate is that through this process, it might be about $300 million that Google and Meta would have to divert to Canadian media organizations to help fund their revenues and what they do. Whereas according to the Canadian Media Concentration Research Project, which is at Carleton, in 2021, Google and Facebook extracted almost $10 billion in ad revenue from Canada. So just to show you the real difference there. We’re asking for them to contribute $300 million, and they take $10 billion a year, at least from Canada. So I think it shows you the real difference there.
DM: I know. It’s absolutely ridiculous. By the way, this is the same country that is going to pour tens of billion dollars into EV battery makers, into automakers, who have profits of hundreds of billions of dollars already. Where we have no problem paying out big bucks to companies, and we’re certainly not going to stand up to them. We’ve allowed ourselves, as of other states, to be played off against them. There’s like the EV subsidy war — actually, the broader green subsidy or clean tech and so on — that’s happening to United States and Canada is happening because the two countries have decided we’re not going to work together to limit corporate extortion. We’re going to go our own separate ways and allows these companies to play us off one another.
So that’s kind of what Google and Meta are counting on that, well, we’re going to just let ourselves get played. We’re not going to stand up to these companies who extract extraordinary amounts of revenue. And that people are kind of going to say: Well, I get that it’s about democracy and journalism, but I want my shit, and I want it right now. And I want to be able to click it. And for it to be easy, because I’m dealing with a lot of stuff. I don’t want to turn around and blame every single individual because people are just trying to get through the day. I don’t begrudge somebody saying something like that, because I can’t get a doctor’s appointment; I can’t afford my rent or my mortgage; my job isn’t keeping up with inflation. My groceries are through the roof, and I can’t feed my son. I can’t put my kids through school; I’m worried about losing my job. I don’t have a defined benefit pension, because we don’t do those anymore, really. I’m inhaling smoke all day, every day, because the forests are burning.
I just want an easy fucking thing — I totally get that. So we’re in a situation where — we have to borrow a line from Cory Doctorow — we have ‘enshittified’ so many aspects of our lives, that we want some things just to be easy. And I totally get that, and I think Google and Meta know that too. And I don’t think people are going to draw a kind of line in the sand and say: No, no, you can’t cross; we’re going to stand up for this country, and we’re not going to let you push us around. I think they’re going to say to the government: Please, for the love of God fix this! Because I can’t handle anymore shit, and I think the government will fall. It’s just the perfect example of late stage capitalism.
PM: Absolutely. I have to say that I like Cory Doctorow, but I hate how he’s popularized that term. I wish he chose anything else — enshittification.
DM: But, it just captures the process so well.
PM: I know. It really does!
DM: And Twitter’s a great example, because it is one of these places where we’re all kind of witnessing what happens when you let these companies do whatever they want. And I talked to Doctorow recently for an interview in Jacobin because he has a new book out that I quite liked, called “Red Team Blues,” which is also just a great name for a book. He was running through Google, and he was saying — and this is relevant to the context for the for this conversation — and was like: Google really sucks. They don’t build anything on their own; they buy up companies and they take their ideas, or they put them out of business, and they bury their ideas. Everything else they kind of take. They did it with their browser. They did it with Google Sheets and Google Docs. They cancelled the RSS reader. And the one thing that they were supposed to have done, Search — really, really good Search — has now become unusably bad because of SEO and ads.
PM: I’d like to read it, yeah. [laughs]
DM: You type something and now you get ads, followed by links to Reddit, which has also been enshittified, because corporations are screwing around with the API. So it’s just like people kind of turn around and say: So what am I supposed to do? Everything is terrible; everything’s getting worse. And now I can’t get my news from tapping this thing into Google because the government tried to get some more money to make it better. You see the absurd spiral. I just wish Camus were still alive to write about it. Because I would just love to see a novel like “The Stranger” but about the existential pointlessness and dread of this technological moment. Wouldn’t that’d be a great book? I think that’d be a great book.
I gotta think about, someone could write that. I don’t who.
PM: I think you’ve put it really well, though. Unfortunately, with the expansion of all these technologies a lot of it has been driven by convenience, and making things more convenient for us. We’ve put aside and ignored so many bad things, because it’s more convenient. So let’s just accept that. I wonder what you think of where all this is gonna go next. Obviously, we’ve talked about we think that the government is probably going to fold, maybe not. But what do you likely see as coming after this, and do you think that there could have been — or there still could be — a better approach to this whole problem of journalism, not getting enough funding and big tech companies having so much money and power in Canada?
DM: I’ve been thinking about the state of media and the future of media for a very long time. And I’ve done some research and some work on this. To be honest, I’ve never really landed on anything other than a assessment of the variegated pros and cons for different approaches. If you’re getting your money from the private sector, you run into problems like the ones we’re facing now. If you get it from the public sector, you run into the concern that if government is funding media, does that influence or affect media independence? That’s a bit of a concern, too, although I’m not as worked up about that as some people are.
PM: I think the CBC does just fine getting its public funding, right.
DM: I do. I think so, and I think at the end of the day, I don’t really think it shapes the journalism on the ground all that much, if at all. So do we want to bolster the public broadcaster? Do we want to reimagine the public broadcaster as a open license broadcaster? I don’t actually know, I’m still torn. I’m just happy that I’m not in charge of it. Because to give the liberals some credit, these are extraordinarily difficult files. They didn’t send their best. One of the things that irritates me is if you look at the folks who have headed some of these bills, they did not send their best. There are extraordinarily capable ministers in the Trudeau Government — not the ones we get on these files, unfortunately. I wonder what things would look like had there been a different minister there.
So maybe they’ll get a reset. And I wonder if they’ll reset, bring in some better talent, try to reevaluate these bills. And I wonder if they will also become a little more techno-skeptical. Because they had a bit of a love affair when they first came into power in 2015. It was the tail end of the Obama years and they were like: Oh, everything is big data’s, the new oil, and techno-utopianism is going to solve all of our problems. And they kind of rode that wave all the way up to Sidewalk Labs subsidiary of Alphabet Inc., trying to pioneer a “smart city,” on the waterfront in Toronto. And the government was all behind it. The Trudeau Government was all in. The Kathleen Wynne government — that was the Liberal government that governed Ontario at the time — they were all in. The City of Toronto: all in. That fell apart, too. Everybody got pretty burned, incidentally, not because people were worried about data privacy and the privatization of public space, but because Alphabet wanted more land than they were willing to give them. You know, you’ve had Josh O’Kane on here; his book, “Sideways,” is a must read on this, I highly recommend it.
But I wonder if that is going to engender a techno-skepticism where future governments say: We’re not so sure we want to give you carte blanche to do whatever you want, or we’re going to expect a little bit more from you. I wonder if this fits into a broader conversation about making sure these companies pay, at the very least, some modest amount of tax to operate in jurisdictions. There is a broader movement right now for a global minimum corporate tax. Canada is part of that, but to push that even further so that companies are finally paying for what they extract, is what it is. It’s a little bit like climate change. These companies create an extraordinary amount of externalities, and they pay for almost none of it. And they really need to be paying for their externalities, because otherwise this doesn’t work.
PM: Absolutely, they should pay for it, but we should also rein them in!
DM: We should smash them up. You know, we used to have trust busting, but the old trust busting model, and the Americans are better on this than we are. Because in Canada, the monopoly policy is to wave through monopolies, as we’ve learned. We have a Competition Bureau that does very little; it does little to encourage competition, and doesn’t block mergers. So I don’t really know what they’re doing — well, nothing is what they’re doing. But back in the day, they would have said: Okay, well, these companies are too big; they’re too powerful. They control too much, and we need to break them apart. And part of the problem is they say: Well, no, no, no, that that’s designed for a market share that is consumer item based, it’s 19th century, and it doesn’t apply in 20th century. It doesn’t apply anymore because it’s a different kind of thing.
My response to this is: Bullshit! It doesn’t apply. If you can look at a company and say: Okay, you’ve got 90% of a market share in Search, you’ve got an X percent of a market share on advertising in a space. You’ve got X number of patents that you’re rolling out. You’re building cities. At some point, it’s just like: Maybe we can design something that captures this phenomenon, because it’s really powerful. Because otherwise we’re gonna end up in a world in which the whole thing is run by a couple of company stores, like it’s the 17th century. Or you’re going to end up techno-feudalism, which is not better. So we’ve got to take that trust busting model very, very seriously. But that’s a whole different conversation, talking about gutlessness. I don’t love our chances at this juncture.
PM: Totally, I agree. That is a whole other conversation as to what competition policy should look like in Canada, and how that might differ from the United States model where we have a slightly different economy and all that kind of stuff. And also how do we deal with the fact that we have these major US companies that are also global companies that dominate the market for so much of what we do now and into the future, and in the present? Because everything is moving to tech, and everything is moving online, and has been for a couple of decades, and blah, blah, blah, right? But I think what you say is important.
There has been this shift within the governing party, within the Liberal Party, as to their orientation on technology — from this much more pro tech stance to this place where, now, they still want to bring in the tech workers; they still want to bring in the tech investment and all that stuff. And there’s special immigration streams that are set up, so if you have tech skills, you can get into Canada more easily, and all that sort of stuff. But they’re also pushing back on some of these larger tech companies, even if it isn’t to the same degree that we would want or hope to see. They’re not coming with the kind of hammer that the European Union is using against some of these major American tech companies, but at least they’re starting to do some things. At least they’re speaking out a bit more about these things, and I think that that is positive.
DM: No, I think so too. Just really quickly, it’s worth keeping in mind that there was an early belief that the internet would be this by a handful of people, this great libertarian space. But these tech bros pretend to want technolibertarianism when what they actually want is to be able to do whatever the hell they want to do without government regulation. They’re used to not being told that they can’t do something, and other users will conform, ultimately, to that what they want. They don’t want libertarianism, they want libertarianism as freedom from the government, but they certainly don’t want responsibility to their users. And they don’t want their users to be free to do whatever they please. Which is why they fight things like data privacy, and so on, and so forth. But now we’re in a world in which we’re starting to regulate tech. The General Data Protection Rule in the European Union was the first real cannonball that was fired, I think. Now, I think these companies are realizing that the rest is coming down the pipe, these are existential battles for them.
PM: Absolutley. They don’t want anyone to regulate them, but they certainly don’t want the rinky-dink Canadian government to be the one regulating them. But I think that if we were thinking big, there’s plenty of approaches that we could take, not that I think the government would do it. But we could think about nationalizing public telecom infrastructure and thinking about reforming the CBC and giving it a lot more money, so that, as you were saying earlier, it can do a lot more local journalism and local reporting that we’re in desperate need of and that the private companies can’t provide. Or even just thinking about how we set up funding nonprofit and private media a little bit differently, instead of linking it directly to tech companies, maybe setting up a separate fund, maybe giving Canadians an option every year to choose how some of that money is being directed to the publications they would want it to go to.
In attempt to have less of the concern about the government choosing who gets money and all that kind of stuff. And maybe taxing advertising profits of these tech companies, instead of saying: Hey, since you have links on your websites, you need to start paying media or whatever, but do a specialty super taxes on ad profits or something. Anyway, just some random ideas. But I think that there’s many different ways that we can approach it, that would potentially have some other fruitful conversations, especially, as you’re saying, because the media is in such a dire straight right now.
DM: I really like the ad tax idea. I mean, it could be that, that in a couple of years from now I look back, and this is smoothed out, like it did in Australia. And ultimately, it does work out more or less. The battle, I think, is going to be over how expansive the model is. I really do think at the end of the day, it’s about the details of the model, not the model itself. Because I actually think it’s possible that this has caught on and is going to keep rolling. The real battle will come — you think Canada is a big deal — I actually think California is going to end up being just a vicious fight. In part because it’s their backyard, the backyard of these companies. And as goes California, if they set the precedent within the United States, and that becomes a norm and an emboldened Congress, I think there could really be something there.
And maybe I’m being a little bit utopian, or a little bit Panglossian, but I can almost imagine a bipartisan consensus in the United States to do something like that. I can imagine getting Republicans riled up about the tech giants too, in a way that maybe Canadian conservatives should be, but aren’t. We could see this become a model and it work out, but that’s not granted. And the way the Canadian government has fought for it has not been as effective as it might have been. So you can, at the end of the day, look around and say: Well, we expected the government to do its job, but didn’t really do its job well. And so we’re gonna criticize them. Even as we look and say: Well, that doesn’t mean we’re taking the side of the tech giants, because we don’t really like them either.
PM: Exactly, I think what you said is a great way to end off this conversation, because, we’re talking about something that’s happening in Canada right now. But what happens in Canada also has bigger ramifications for how this model continues to expand. And in particular, if it gets entrenched in California, where as I understand there is bipartisan support from Democrats and Republicans to pursue this model within that state, then it could not only expand through the United States, but then it makes it a lot easier for other countries to follow through as well. So David, it’s been great to speak to you about this. To dig into this Canadian issue for our international listeners. Thank you so much.
DM: Thanks so much for having me.