Explainer: Why is Canadian news getting blocked?

In response to a new law called the Online News Act, tech giants Meta and Google are starting to block links to Canadian news outlets
Social media apps owned by Meta, such as Instagram and Facebook, have already started to ban news stories in Canada. (ID 251995115 © Dmitrii Melnikov | Dreamstime.com )

On June 22, the Canadian government passed a brand new law. It is called Bill C-18, or the Online News Act.

Though it will not officially take effect until some time at the end of the year, it is already starting to have an affect on Canadians.

And not in a good way.

In response to the coming regulations, tech giants Meta (who own Instagram, Facebook, and Threads) and Google have announced that they will slowly begin blocking links to news in Canada. In some cases, these blocks are already happening.

Why are they doing this? What does it mean for news in Canada? How did we even get here?

This is a heavy topic, but let's try to break it all down.

What does the Online News Act do?

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Canadian politician Pablo Rodriguez is one of the forces behind the new law. (Getty Embed)

This law says that social media platforms and search engines must pay news outlets (such as newspapers and news companies) for the right to link to, or share, their stories online.

This means that any time a CBC story was posted to Instagram, or a National Post story was linked through a search on Google Chrome, a small portion of money would go from the tech company to the news agency.

The law says that tech companies are allowed to negotiate with news agencies as to how much money that is, as long as it is something.

Why make tech companies pay?

The Canadian government says that this law creates fair sharing of the money generated by people reading news. After all, they say, if someone uses Facebook to read a story about an event, shouldn't the news company that made that story get paid?

But the tech companies claim that they are not making much money at all from these news stories. They feel that the law is unfair and are responding by simply not carrying the news at all. (Meta says that it will block all news stories, from anywhere in the world, in Canada. Google says that it will only block news stories made by Canadian outlets in Canada.)

How does the news make money?

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Postmedia is one of the largest news companies in Canada. (Getty Embed)

For well over a century, newspapers and news stations made most of their money through advertising.

Companies (or "advertisers") would buy ads ("Buy our new fabric softener!") to reach the readers of newspapers, the listeners of radio, or the watchers of TV. News agencies then used that money to pay their reporters and run their companies.

Since the internet arrived, people have slowly moved away from traditional news outlets like newspapers, magazines, radio, and TV. Instead, they stream news reports or read stories online. News agencies started websites and began selling online ads to replace the money that they lost from their traditional outlets.

Tech giants own the market

But this plan hasn't worked. Instead of going to online news sites, people have mostly been using social media sites to read about news. Advertisers have noticed this, and have stopped buying as many ads with news companies. They now advertise in places like Instagram and Facebook.

In other words, the money that news agencies used to be able to rely on to run their businesses have disappeared. In fact, about 80 percent of online ad revenue is going to companies like Meta and Google.

How has this affected news reporting?

Without this ad money, news agencies have spent the last 20 years cutting their services. Tens of thousands of reporters and photographers have been fired, and hundreds of newspapers and stations have been closed. The quality of news reporting, especially local news reporting, has gone down.

And even after all of these cuts, news companies are struggling to survive.

This is why the Canadian government is stepping in. They feel that without forcing tech companies to share their ad revenue (money), Canadian news companies will continue to disappear.

Holding firm

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Tech companies like Google say that the new Canadian law is unfair. (Getty Embed)

Meta and Google say that while they don't want to block Canadian news, this law will give them no choice.

Not only do they say that they make very little ad money from news stories, they say that they are actually providing a free service to news agencies by making it easier for people to search for their content. In their view, they will be just fine without carrying the news.

And there is another issue for them. They do not want to set a precedent (an example that can be used by others).

Setting a standard

Let's say Meta and Google agree to the rules set out by the Online News Act and start paying news companies.

But what happens when other countries see this and decide to create their own similar laws? Like the United States? Japan? All of Europe? Suddenly that is a LOT more money being paid by tech companies to news agencies. They do not want to do that!

What happens next?

As the clock ticks down on the Online News Act coming into effect, both sides are holding their ground. And for the average Canadian caught in between, the result doesn't seem too great.

Many people are waiting to see whether one side or the other with find a way to reach an agreement that keeps Canadian news in the clear.

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