In 2021 Australia’s government had a showdown with Meta and Alphabet over whether or not news companies should be paid for the articles that appear in Facebook feeds and Google search. The high-stakes drama saw closed-door meetings between tech executives and Australia’s prime minister, the sudden disappearance of news on Facebook and a world-first law that led to hundreds of millions being paid to news publishers Down Under.

Two years later, the battle is due for a sequel. This time, however, it’s Canada’s government facing off with Google and Meta. As in any good sequel, the stakes are higher.

Canada is in the process of passing the Online News Act. As it stands, the legislation would force Google and Meta to negotiate with Canadian news broadcasters, radio stations and publications over licensing fees for the articles that are shared on Facebook feeds and surface in Google search queries. If no agreement can be made, an arbitration board would decide how much news publications are to be paid. 

The new law will not be cheap. Google and Meta cut deals worth at least $130 million (AU$200 million) annually in Australia after a similar bill, called the News Media Bargaining Code, was passed in February 2021. The cost in Canada could run much higher, with Canadian Sen. Peter Harder foreseeing Big Tech footing the bill for “between 30% and 35%” of eligible news publications’ expenditures. 

There’s more at stake still. The legislative zest shown by Australia and Canada could spread to countries like France and Spain, where there have already been disputes over licensing news content. In the US, the Journalism Competition Preservation Act, a bipartisan bill similar to Canada’s Online News Act, was sponsored by Sens. Amy Klobuchar, a Democrat from Minnesota, and John Kennedy, a Republican from Louisiana, though it failed to pass through Congress last December. 

“Of course we are just going to keep going. We have a broad coalition,” Klobuchar said to Deadline in December. 

Should laws of this sort spread throughout the world, Google would likely need to fork out billions of dollars for the pleasure of linking to news articles surfaced by search results, says Michael Geist, Canada’s research chair for internet and e-commerce. “It would change their [Google’s] entire business model.”

The increasingly global dispute is itself likely to set the stage for a similar conflagration over artificial intelligence. Chatbots like ChatGPT and Microsoft’s Sydney, which the tech giant is integrating into its Bing search engine, aggregate information from news publishers and churn out answers without links back to their sources. This problem has already been raised by Getty, whose copyright-protected images have been used by AI art generators like Stable Diffusion. 

Setting the stage for more complicated confrontations in more countries, the struggle brewing over the Online News Act will have implications beyond Canada’s 38 million citizens. 

Familiar tactics from Facebook and Google 

Meta and especially Google have not taken Canada’s bill lightly. In late February, Google cut news results out of search for 4% of users in Canada, a “trial” that will take place over five weeks. The threat is clear: If the Online News Act passes, Google may shut out news providers entirely. Meta has explicitly said it will stop making news articles accessible on Facebook and Instagram if the bill becomes law. 

“When you put a price on linking to certain information, you no longer have a free and open web,” Sabrina Geremia, Google’s managing director for Canada, wrote in response to the Online News Act. “Requiring payment based on linking encourages cheap clickbait, not quality journalism.”

It’s a reprise of the strategies used in Australia, though reversed. There it was Facebook that suddenly disappeared news articles and publication pages from its platform, like Google has done for some Canadians, and Google that less aggressively cautioned the government against passing the bill. 

“They’re throwing their weight around, which is what they did here,” said Caroline Fisher, deputy director of Australia’s News & Media Research Center. “The tactics were unpopular with the public and damaging to their brands, but the tough negotiating, particularly from Facebook, did secure concessions.”

The main concession was a last-minute provision in the Australian bill that allowed tech platforms to avoid negotiating with news publishers under the threat of arbitration if they’re deemed to have made a “significant contribution” to the media landscape. (Under arbitration, triggered if a deal between a platform and a publisher couldn’t be struck in 90 days, a panel would have the power to name a price it deemed fair for the platform to pay the publisher.)

Shortly after the bill passed, Alphabet and Meta signed deals with many news organizations to join their respective Google News Showcase and Facebook News Tab initiatives, which provide readers with curated news feeds. Some of these deals were worth tens of millions of dollars. This was evidently enough to get both Alphabet and Meta designated as “significant contributors,” dulling the threat of arbitration. But because the deals are private, there’s very little transparency about how much the contracts are worth and what that money is being spent on.

“We don’t know whether the money has led to an increase in public interest journalism, we don’t know if it was spent on journalists, there’s no requirement for it to go towards journalism,” Fisher said. Though some publications, like The Guardian, confirmed deals made with Google and Facebook led to dozens of new journalists being hired, other publications were more opaque. Money could have gone to reporters — or to pay for a glitzy new building, or to shareholders.

“If this is all about trying to improve the health of the news media market and underpin quality public interest journalism, we need to know where that money is going,” Fisher said.

There are problems beyond a troubling lack of transparency. Much of the money Meta and Google paid to news publishers went to entrenched, powerful firms, like Rupert Murdoch’s News Corp. Several notable smaller publications were left out, widening disparities within the news industry. There’s a risk that fortifying already strong publishers could stifle innovation, says Sacha Molitorisz, lecturer at Sydney’s Center for Media Transition.

The “significant contributor” clause is the “foundation of the lack of transparency,” Molitorisz added. 

Canada’s Online News Act currently features no such clause, meaning deals cut under it are likely to be more transparent. It also casts a wider net so as to include more publishers. The legislation is “more inclusive of start-ups and small news outlets, including those serving a diverse readership and more rural communities,” according to Harder, the Canadian senator. 

Yet this is a perilous balance to strike, warns Geist. The Online News Act could qualify gray cases, like regional radio stations with little internet presence or TV broadcasters that don’t produce news, leading Google and Meta to justifiably balk. 

Geist isn’t against the government supporting the news media industry, but says it’s better accomplished through taxation. “Get them [Meta and Alphabet] to pay their fair share of tax, and if you want to use tax revenues for programs to support the media sector and journalism, as long as you structure in a way the government doesn’t interfere with the media, that’s perfectly legitimate.”

Though the Australian and Canadian experiences are similar, much has changed even in the two years since Australia’s law passed. In 2021 both Alphabet and Meta were surging toward all-time-high valuations. The picture is different now. Alphabet last month cut 12,000 workers. Six months after laying off 11,000 employees, Meta has decreed 2023 the year of efficiency. It will let go of 10,000 more staff amid a restructuring announced on Tuesday. 

It would be far easier for the Mark Zuckerberg-helmed company to make good on its threat to remove news links from Facebook and Instagram than for Google. It relies mostly on user-generated content. During the company’s spat with the Australian government, Meta said only 4% of Australian Facebook user engagement came from news reading.

“I don’t think Facebook is bluffing here,” Geist said. “Sometimes one gets the feeling that they are looking for whatever excuse they can find to stop news sharing. It’s just not worth the hassle that it’s been, it doesn’t generate a ton of revenue and it clearly creates a lot of problems for them and the perception of the platform.”

Artificial intelligence is the next frontier

Clashes pitting governments and news publishers against big tech companies are likely to evolve with the onset of artificial intelligence. “Large language model” AI chatbots like ChatGPT work by consuming and synthesizing enormous amounts of information. When users ask questions, the answers bots give come without links to the source material.

Type “best phone to buy now” into Google and you’ll find lists written by publications like CNET, Tech Radar and Engadget. Put the same query into ChatGPT and the AI will helpfully catalog options based on “expert reviews” but with no links to any site. As search engines like Bing and inevitably Google integrate similar chatbots, news sites could see their articles aggregated without the compensation of a link back. 

“It’s a real dilemma for news organizations,” Fisher said. “Does Microsoft know what sources were used in the creation of a response? If it’s got that data, does it need to make that data transparent, and on the basis of that data estimate some kind of payment to those providers?” 

News Corp. has already raised the battle flag. “As these AI engines are being trained, and they’re using professional content to be more professional themselves. … Clearly they are using proprietary content,” News Corp. CEO Robert Thomson said at a Morgan Stanley conference in early March.

“They would argue that by synthesizing it, extracting the essence of the content, they’re providing a transformational service,” Thompson said of AI companies. “We would argue that they wouldn’t be able to provide any service without our content.”

The showdown between Canada’s government and big tech platforms is important. It won’t be the last.