Why Link Taxes Like Canada’s C-18 Represent An End To An Open Web

from the save-the-open-web dept

Well, here we go again. For years now, the legacy news industry, often led by lobbyists for Rupert Murdoch, have been pushing a bizarre plan to tax links on the internet. The entire rationale for this plan seems to be “news organizations used to be rolling in easy money, they failed to innovate with the times, and now Google and Meta are rolling in easy money, so we should just make Google and Meta give news orgs cash.”

That’s it. That’s the entire rationale. Sometimes people try to get all high minded and talk about the importance of journalism, which I agree is important and which certainly could use new sustainable business models, but that doesn’t explain why they should break the fundamental nature of the internet (everyone can link to everyone) to solve that problem. Also, none of it explains why internet companies should magically be responsible for paying journalism outfits.

At best supporters of these plans come up with this rationale: Google and Meta take a huge percentage of digital advertising, and it’s likely that those ad budgets used to be what supported news orgs, so therefore, they should share some of the cash. When people look askance at that — or point out that under that logic any business that successfully competes with a legacy business should be forced to share its revenue with the business they out competed — they might say “but Google and Meta “use” news without paying for it.

But, let’s interrogate that claim as well. No, Google and Meta don’t “use” news without compensation. Quite the opposite. Both sites have a very, very small part of their sites that may link people to news. Google News is an aggregator/news search engine that sends traffic to people’s sites by linking to those news stories. Meta’s Facebook property similarly allows its users (who often include news sites themselves) to link to their stories elsewhere and drive traffic to them.

If those sites fail to monetize that traffic, that’s kinda on them.

Now, when I point that out, some people claim that those links don’t really send that much traffic, because too many people just see the link/headline/snippet and decide they don’t need to click. And, um, the answer to that is again to suggest that it’s difficult to see how that’s Google or Facebook’s fault. If your news articles provide so little value beyond the headline, image, and a snippet, I dunno, you kinda don’t deserve to make that much money? Good journalism has to add value, and part of that is building up a reputation that readers should want to read the details and nuances.

Also, what this article kinda highlights is that many of these news publishers who are whining for a bailout from Google and Meta spent many years focused on gaming Google and Facebook’s algorithms for clicks rather than building a loyal audience who recognized and valued their journalism.

And this takes us to the real proof that news publishers are full of shit in all of this: just look at what they do rather than what they say. If Google and Facebook sending them traffic was really a problem, they could easily fix that themselves. They can use robots.txt to block Google. They can use referrer tags to block traffic from Facebook. They can change the social graph content to make it less appealing.

But, of course, they do the opposite of that. They hire Search Engine Optimization (SEO) and Social Media Marketing experts to try to help them “rank better” on these sites and get more traffic. They explicitly try to get better promotion from those sites because they already get tremendous value from that traffic.

Now they want to get paid for that traffic that they already value! It’s basically news orgs saying “hey Google and Meta, not only must you advertise us for free, you must ALSO pay to advertise us.” The whole equation seems backwards.

Similarly, you sometimes see people make quasi-copyright arguments in favorite of this scheme, but that’s a fundamental perversion of copyright, an already extremely perverted concept designed to create incentives for creation. In order to function in a free society, copyright has to be limited to more egregious levels of copying. But linking an including a headline/snippet can never reach that level of a copyright violation, and changing the law to make it so would have so many downstream negative effects, enabling all sorts of copyright abuse and silencing speech.

And, of course, the only way that these link tax plans actually work is by breaking the most fundamental element of the open web: the hyperlink. For the entire history of the open web, a key attribute was the freedom to link to others. Now, those others could block the traffic, or put up a paywall, or whatever else they wanted. But everyone must be free to link to one another.

These “big tech pays news” schemes break this fundamental idea. They announce that some companies, these big companies who apparently no one likes, must suddenly pay to link. And sure, you can easily state (1) these big companies can afford it, and (2) no one likes them any way, so maybe you think that’s good. But nothing good comes from breaking the fundamental principles of the open web.

Once you break this concept of the freedom to link, you’re flinging open Pandora’s box to all sorts of mischief. Once industries learn that the government has no problem stepping in and forcing companies to pay for links, does anyone really believe it will stop at news organizations? Of course it won’t. Then the whole internet just becomes a food fight for lobbyists to argue with politicians over which industries they can force to subsidize other industries.

It’s pure unadulterated crony capitalism at its worst. Those with the best connections get to have the government force those with weaker connections to subsidize their own failures to innovate and compete.

And yet, this idea remains inexplicably popular (I mean, it’s quite explicable for the news orgs, but it’s inexplicable why so many others have jumped on board). As you’ll recall there were a few early experiments with this in Europe. In Belgium, when such a law passed, Google threatened to block any publisher who didn’t give them a free license, and all the publishers rushed in to give Google a free license, showing again how much they actually value the traffic. In Germany, the tax was applied to snippets, so Google did the only sensible thing and removed snippets, causing the publishers to freak out again.

In response, Spain passed an even more problematic version that said that Google literally couldn’t block those it didn’t want to pay. They literally said that if you have a news aggregator product, paying for links is mandatory. So Google did the only reasonable thing: shutting down Google News in Spain. Still the program went ahead, and, of course, it was the smaller news orgs who suffered the most.

Of course, the biggest success for all this, not surprisingly came in Australia, where everyone freely admitted that it was a plan to extract money from Meta and Google and hand it to Rupert Murdoch, who has been most pleased with the arrangement. Yet again, while this subsidy to Murdoch may have made him happy, it served to screw over smaller publications.

This whole scheme has now come to North America. Last year, Senator Amy Klobuchar pushed to help Rupert Murdoch and to harm the open internet with her JCPA. While that failed, it’s quite likely it’ll come back in some form — probably worse — soon.

But now the biggest push is up in Canada, where bill C-18 has been a big point of discussion for months. As in Australia, backers of the bill insist it’s not a link tax, it’s just a law to require a negotiation on how much to pay. But… pay for what? The answer is to link. It’s a link tax. The people claiming otherwise think you’re stupid.

Already, both Google and Meta have said they’ll block news links in Canada if this bill passes. And, again, this is the only reasonable move: if the government taxes something you expect to get less of it. The stupidest thing in all of this is not only is the government trying to force the payment of something that is fundamentally free, they seem to expect the sites to just continue letting news flow across their platform, despite its costs.

The Canadian government is so mad that Google and Meta are doing exactly what the government is pressuring them to do by taxing an activity, that they’re calling it “intimidation” and demanding internal communications from both companies. It’s kind of a galaxy brain take to say “you’re engaged in intimidation by following the incentives we’re creating, so in response, we’re going to intimidate you by demanding your private communications.”

Meanwhile, it’s worth noting that the whole framework of C-18 is particularly disingenuous. The bill’s title is: “An Act respecting online communications platforms that make news content available to persons in Canada.”

Can you spot the problem? I knew you could, because you’re not as stupid as people pushing this bill think you are.

Google and Facebook are not “making news content available” to people in Canada. They’re linking to that news that the news organizations are themselves making available.

The whole thing is problematic… and has a decent chance of becoming law in Canada. The days of the open web where concepts like “linking” were unquestioned may be coming to an end.

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Companies: facebook, google, meta

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Comments on “Why Link Taxes Like Canada’s C-18 Represent An End To An Open Web”

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PaulT (profile) says:

“Already, both Google and Meta have said they’ll block news links in Canada if this bill passes.”

Likely. But, 2 things to note from here in Spain to confirm what’s mentioned here – at least from the English speaking community. One, the blocks in Spain didn’t block other news, so for example you could still go to the US or UK versions, it was just the .es domain blocked. The other is that it was mainly smaller publishers that suffered. So, influencing a block didn’t lead to better information for the local population, it led to a foreign-influenced and/or major published monopoly. It’s harder to find news not associated with a certain corporate interest.

However they want to play this, Google News is an afterthought that’s not directly monetised. Google make more by shovelling traffic to newspaper sites then attaching ads than they could ever do by directly monetising the news service itself (which they don’t, unless something changed).

Another example of something that sounds good if you don’t understand the landscape, but in reality just gives more money to another entrenched corporation.

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Anonymous Coward says:

My family once owned a very profitable business making horse harness and related equipment. The arrival of the automobile largely destroyed that business. I want a tax on the sale of every automobile to reimburse my family for the lost income caused by automobiles.

IanW (profile) says:

Re: Not another horse buggy/car analogy

My family owns a little business with a storefront on Main St. It has a nice little window display that everyone enjoys stopping by and looking at. It generates good conversation while engaging the community. I update it daily with new stock, which takes effort.

But now there’s a corporation that set up across the street. Every day that business owner comes into my store, takes all the merch on display in the window, across the street, wraps a little bow on it and displays it as his wares as part of some diorama. He never pays for the merch he is taking. He claims it’s not about the individual wares, rather “the experience” his diorama creates from them.

I offered to sell to him my wares at a wholesale rate, but he’s not interested. He claims he does not charge his customers for his wares so shuld not need to pay for them. Yet, he seems to declare ridiculous profits every quarter; that’s his business model.

I’m just asking the authorities do do something about his daily taking of my wares from my display without compensation.

bhull242 (profile) says:

Re: Re:

Except you could easily stop him from doing that by just telling him not to do it anymore, and he would, but instead you try to get him to display your products even more prominently than others’. Also, he has a bunch of other businesses that could easily be the source of the profits, and he tells customers to check out your shop for more like it. Oh, and he only takes stuff on request, then puts them back afterwards. Oh, and he’s not actually taking anything, because it’s still on your display throughout this, so it’s more like he’s posting a livefeed of something on your display without actually touching it.

Yeah, this analogy falls apart pretty quickly.

Anonymous Coward says:

All the search engines and whoever else should just get ahead of the game and drop news outlets entirely. No specific news aggregation. No results in search, etc.

Everyone can sign up to be searchable or aggregated if they want, unless a government makes payment mandatory. Then publishers from your friend’s mom’s blog to No really, We’re Journalism, Why Do You Ask Corp. can publish on servers in a different country and/or complain at the government and the few outfits driving this bullshit.

Anonymous Coward says:

google and meta should simply block all links to news in canada otherwise they simply encourage the destruction of the open web ,google provides a service
it displays any website including news news orgs can simply use robots txt to block google ,
this is similar to nintendo asking for revenue sharing of youtubers who make game lets plays,
eventually they gave up as they realised it was free advertising and promotion for their games .
but then in countrys outside america its easy for
news orgs to say google has loads of money
it should pay for links to news storys .

PaulT (profile) says:

Re:

“If you don’t want search sites listing your site, there’s a free and simple way to effect that.”

Therein lies the rub…

They’re aware that they get sent free traffic, so they won’t block it. They’re also aware that Google gets ad revenue when people visit their sites if they use Google services (though not the Google News site since they don’t have direct advertising). The old school model where they charged extra for classifieds, etc., while knowing more people would read the paper than paid for it has fallen through, so now they’re trying to get others to pay for them.

It won’t work, but sadly the Murdoch garbage with clickbait, gossip and such will be more likely to survive than actual journalistic outfits.

That One Guy (profile) says:

Win-win

For the larger publishers pushing this corruption it’s a win-win no matter the outcome really so long as they learn from the early mistakes and make the payments mandatory.

Option 1: Google/Meta fold and start paying out, giving the publishers a free source of money that will only grow with time as once they’ve caved it becomes a lot easier to pressure smaller companies/platforms to follow suit to stay competitive.

Option 2: Google/Meta refuse to fold, and while all the publishers suffer as a result the smaller ones that might have competed with the larger ones really get screwed over, potentially to the point of shutting down.

The question to be asked isn’t ‘why does this keep happening?’, that one’s easily answered by a mix of short-sighted greed and blatant corruption, the question is why doesn’t it happen more often given how it has basically no downsides for those pushing it.

PaulT (profile) says:

Re:

In some markets, it’s because there’s at least some illusion of a diverse press. Openly shutting down smaller outlets wouldn’t necessarily fly, even if the excuse given was because Google wouldn’t pay. Which itself could bring some more attention – if Google/Meta are the only things keeping the press alive and it’s demonstrated so solidly, maybe people will do something about that.

But, also, there’s value to the majors in pretending there’s a diverse press, even though most of them are just rewriting the same tweets and AP feeds. If people start noticing there’s nobody representing them, they might start getting agitated and active…

Drew Wilson (user link) says:

Been Fighting Against this for Months

Bill C-18 is one of those bills where the digger you deep, the more horribly corrupt and self destructive it ends up being. One of the talking points by the big publishers is that the point is to help the smaller journalists (LOL!). Yet, the elligibility requirements makes it clear that they don’t want smaller online journalism outlets benefitting it (Section 27): https://www.parl.ca/DocumentViewer/en/44-1/bill/C-18/third-reading

The inclusion of “not primarily focused on a particular topic” is one such example, yet it’s this very provision that will also cause an absolute explosion of state sponsored troll farms and clickbait content (re: “regularly employs two or more journalists in Canada”)

Further, the bills backers are wildly claiming that the bill will cause platforms to pay for up to 35% of all expenditures of news rooms as well. The numbers never really backed up those claims, especially when looking at what smaller players receive (estimated 75-25% split between the large players and everyone else. Find any dollar value and divide by the number of players. You’ll see very quickly how bad that pays out). Either way, the government is saddling platforms with unlimited liability that barely features on their own services. Little wonder why they want out. It’s the obvious move under the circumstances.

I really could go on and on about it, though it has been one of the things responsible for making my blood boil for the last several months now.

sumgai (profile) says:

Re: Another example

As one poster responded above, there are several examples of “prior art” that preclude this kind of nonsense. My favorite is the piece by Rick Falkvinge, wherein he notes that “Nobody asked for a refrigerator fee”…. and the whole world got along just fine.

https://falkvinge.net/2012/02/04/nobody-asked-for-a-refrigerator-fee/

I personally feel that every public office holder should be required to read it out loud in a public square, with advance notice to one and all, before taking an oath of office. Private business executives are of course immune to being coerced into reading it, but then again, the wise ones always pay attention to both the public sector and to what government is doing, or at least planning to do.

John85851 (profile) says:

Two points to consider

Two points for media outlets to consider:
1) If you’re using a click bait headline to get readers, you’ve already failed. Do people really think there’s a story of value behind a headline that says “Drivers in Florida over 50 need to know this one trick.”

2) Don’t put your entire website behind a popup that tells people to disable their ad blocker to read the story. Sorry, I’m not going to risk getting malware from an ad. Instead, I’ll get my news from another site.

Anonymous Coward says:

Then watch VPN usage go up

The DMca does not apply to the end user.

Doing things like bypassing geo restrictions or bypassing product activation is not illegal for the end user because it’s not belong done for for financial hain, meaning making money

The DMCA requires that it be for for financial gain for it to be a felony offense

Anonymous Coward says:

Re: Re: obey

Someone finally gets it right that the CFAA and DMCA do do apply abroad

When I am on road trips to Mexico I use a VPN to get iHeartRadio, YouTube music and SiriusXM wille I am driving down there I am not breaking any US laws because neither the CFAA or the DMCA apply in Mexico

When I go to Mexico I only have to obey Mexican law

American law including the CFAA and the DMCA have jurisdiction in Mexico

shinygoldengod (profile) says:

Bad regs are a global contagion

I’ve been watching these bad ideas proliferate across the western world. While there are nuances (like common law countries versus civil law, constitutional variance, etc.), there is a pattern whereby each new jurisdiction points at those that have already taken (bad) steps and uses that as proof of a smart idea. But then, if Billy jumped off a bridge, does that mean you should? (quoting my mom).

Jurisdictions are exerting more and more regional regulation over the web. Yes, VPNs are the technical answer, but the source of the issue is political power, and the fear that politicians have that the internet is challenging theirs. Canada is ticked because tech won’t comply (don’t give me that attitude! … my mom again).

Is anyone else convinced that a fragmented internet is only a few steps away? Countries are intent on forcing their own values on their local networks – they aren’t going to give up just because technology doesn’t work that way … yet.

Bottom line: laws like this are proliferating, governments see tech as a threat to their absolute power, and they have the rule of law to enforce compliance without being “fair”. It’s only a matter of time before the fire walls go up.

LostInLoDOS (profile) says:

History lesson

Taxes are useful and necessary for free access societies.
The United States didn’t have federal taxes until after the war of 1812.
But still small and specific.
It was with the war of tariffs and state’s rights that they became wide spread. Following the civil way and the change of a Republican union of states to a federal grant of districts, the Union states rolled out taxes on all land. The war with Spain brought us country wide taxes.
WWII brought taxes to each and every person. We had to pay for all the war crimes the Allies committed. Mines, incendiary bombs, chemical weapons. The methods to deatomise humans.

That’s what the new world does, tax.

Zane (profile) says:

What next

The thinking is that Google has essentially become like the front page of a newspaper, in the past this was where the highest paying adverts would be. The income those adverts generated were used to fund the articles that were written. I’m not saying a link tax is the right way to go, but I wouldn’t just write it off as a bad idea. The current model is clearly not working, so we need to evaluate other ideas. Ones where the profits go to “good” journalism, or at least not promoting misinformation. I feel uneasy about the power that Google has to index and promote content, whilst profiting from how it does this.

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