Meta’s Facebook threatened Australia in February, 2021, and proceeded to block Australian users of the platform from sharing or viewing news content.JOSH EDELSON/AFP/Getty Images
Vass Bednar is the founder of the newsletter Regs to Riches, a senior fellow at the Centre for International Governance Innovation and executive director of McMaster University’s master of public policy in digital society program.
The current slide in share prices of the tech giants such as Meta Platforms Inc. and Apple Inc. – stocks known collectively by the wonderfully matriarchal acronym MAMAA – has not dethroned the companies’ dominance in our everyday lives. But lower valuations may weaken their negotiation power in continuing policy conversations that promise to impose new expectations on, and implications for, their business models.
These companies are now low on cash and distracted with existential-level threats. Governments need to seize the moment and make 2023 the year they finally move decisively on regulation to bring these tech giants to heel.
In Canada, in particular, the crash of tech stocks could further empower regulators who are looking to rein in the largest technology firms by imposing new standards related to privacy and data (Bill C-27), competition (currently in consultation), culture and streaming (Bill C-11), and content via legislation on online harms (forthcoming) and news media (Bill C-18).
The more utopian open web approach asserts that any sort of regulation in a digital market is unfavourable, as the web is generally presumed to be a democratic market. Increasingly, however, social-media companies have reminded us that they aren’t the internet itself, but profit-seeking companies built on top of it.
Twitter is no longer a pseudo town square as it aggressively seeks to improve monetization, and Facebook is starting to abandon news investments in the United States. The fourth wall is broken, with stark reminders that these are profit-seeking enterprises that don’t have the public interest at heart. In fact, the firms are becoming more aggressive in trying to generate profits.
It is well known that Meta’s Facebook threatened Australia in February, 2021, and proceeded to block Australian users of the platform from sharing or viewing news content. That was a tactic to accelerate concessions from the government as it sought to finalize the now-infamous News Media Bargaining Code – a mandatory code of conduct that governs commercial relationships between Australian news businesses and designated digital platforms that benefit from a significant imbalance in bargaining power.
Facebook’s move worked, but only to a certain, limited extent. Since then, only voluntary deals have been struck between the technology giants and news companies, and there is no regulated obligation to disclose the financial value of them – though the Australian Competition and Consumer Commission recently estimated the suite of arrangements to be worth 200-million Australian dollars (about $183-million). There is no longer a ban on news on Facebook in Australia.
Now, Canada is right to attempt the same through Bill C-18, to make social-media platforms pay for what they have profited immensely from: the news shared on their platforms. And Facebook’s attempt to make the same old empty threat is baffling.
Facebook impulsively threatened Canadian decision makers in October that it would ban news, in retaliation for not being called to testify before a parliamentary committee. But Meta needs people to use its platforms so that it can continue to court advertising dollars. The durability of its user base and their presumed preference to consume news through Facebook’s News Feed is what the platform’s recent warning hinges on. But Facebook knows well that there is no such durability.
Deep down, these platforms knew that paying for news was a win-win solution, and even if one platform is unwilling to compromise, another will take its place. That’s why Facebook blinked in its showdown with Australia. That’s why it would blink again with Canada.
All the more so when Meta’s stock has lost more than 60 per cent of its value since the beginning of 2022, amid a wider tech beatdown. Just one month after the threat to ban news, in November, Meta laid off about 11,000 employees worldwide, which was about 13 per cent of its work force. Like its MAMAA peers, Meta knows it is weak and in no position to make demands.
Perhaps this context of a changing business climate will give regulators more courage to continue to move forward with the suite of bills intended to introduce new standards in Canada’s digital economy. The change could also inspire managers of legacy news media organizations that have engaged in pre-emptive side deals directly with big tech firms to walk away from secretive bespoke agreements in favour of consistent, predictable income under Bill C-18.
The tables are undeniably turning. If Facebook were to stop retaining customers who like a news feed that aggregates stories according to their preferences, in the course of following through on the company’s threat, it remains to be seen whether Google News would follow suit in solidarity or stand to gain from Facebook’s stunt.
We’re in – to borrow an in-vogue phrase these days – a metaverse that seemed impossible just a year ago, as Big Tech seems slightly less stable than before. The shift is an important reminder that people have power – the power to build alternatives, the power to choose among them and perhaps the ultimate power: to say no.
If that becomes the case, Facebook’s Bill C-18 posturing may not be the only bluff called out. Take, for example, Twitter, which amid its chaos after the takeover by Tesla Inc. founder Elon Musk has laid off its head of public policy in Canada – the very woman who ran interference for the company on domestic regulation.
As the former heritage minister Steven Guilbeault, among the architects of Bill C-18, once said, if you’re not at the table, you’re probably going to be on the menu.