New research shows that the 2023 Canadian link tax has already failed – just like all the others

At the heart of Walled Culture the book (free digital versions available) lies the sorry tale of the EU Copyright Directive. Its stated aim appeared reasonable enough: to update EU copyright law for the digital age. But unprecedented lobbying by the copyright industry saw it become yet another failure to understand the online world, and yet another example of laws being passed to prop up legacy industries that refused to change with the times.

One aspect of the failure is the introduction of a so-called “Link Tax”. The idea is that when sites like Google and Facebook post links to articles on news sites, they should pay for the privilege of sending traffic there. This is not just an absurd proposal in itself, it is one that has already failed – twice – in Spain and Germany. Despite that fact, Canada went ahead and introduced its own link tax in August 2023. More details of how that happened are found a couple of blog posts from 2022 and 2023.

Remarkably, we already have clear evidence that Canada’s link tax has failed to achieve any of its objectives, thanks to some fascinating research contained in a preprint paper released by The Media Ecosystem Observatory, a collaboration between McGill and the University of Toronto. The whole thing is well-worth reading, since it contains some striking graphs that illustrate just how catastrophic Canada’s link tax has been for the newspaper industry that lobbied so hard for it. Canada’s Online News Act required “large digital intermediaries” to enter into negotiation with Canadian news outlets, supposedly to compensate them for posting news material on their platforms. As the new paper explains:

While Google negotiated an exemption agreement with the Canadian government through the creation of a $100 million per year fund for Canadian journalism, Meta disputed the Act entirely, claiming that it was based on a “fundamentally flawed premise” and maintaining that they can only reasonably comply with the Online News Act by ending “the availability of news content in Canada.” On August 9, 2023, they did.

The research looks how the end of news availability – what the preprint calls the “ban” – affected the dissemination of Canadian news content on Facebook, and what impact it had on news organisations, Meta, and on Canadian users of Facebook and Instagram. The research has a number of key findings:

Even six months after the ban, a large number of Canadians (approximately 33%) still say they use Meta’s flagship social media platforms Facebook or Instagram for access to Canadian political and current affairs information.

The Facebook Pages of national news outlets lost approximately 64% of their Facebook engagement following the end of news availability for Canadian users. Local news outlets lost approximately 85%. Almost half of all local news outlets stopped posting on Facebook entirely in the four months following the ban.

Engagement with politically relevant pages and groups has remained unchanged since the ban, suggesting politically-oriented users have not reduced their Facebook usage.

In other words, even though Canadian users were unable to see a wide range of news material on Facebook or Instagram, many of them still turned to those platforms to remain up-to-date. However, they way they did that changed radically. For example, they no longer clicked on links to news sites – since they had all been removed. This means that the traffic from Facebook to those sites dropped dramatically, with all that this implies for loss of advertising revenue and reader engagement for those publishers. A key question is therefore: how did Canadian users manage to stay informed about the latest news, since they could no longer see, post or share links to news sites? The researchers explained:

Members of politically-oriented Facebook Groups have circumvented the ban by posting screenshots of Canadian news articles. Although there are fewer screenshots of news post-ban than there were links to news articles pre-ban, the total engagement with news content in these Groups has remained consistent.

That is, people quickly circumvented the ban by using screenshots instead of links. In this way, the information of those news items was still readily available, but there was no link to the article itself, on the publisher’s site. The link tax meant that users were inconvenienced only slightly, Meta too suffered no great drop in engagement, but publishers lost out hugely. Local news outlets lost out the most.

In fact, there is another group who lose out as a result of Canada’s link tax: everyone on the Web. One of the noxious side effects of this foolish law is that instead of routinely posting or sharing cross-site hyperlinks, to enrich and enhance the system, Facebook users in the country are forced to paste screenshots instead. These are the antithesis of the living Web, since they cannot be used to explore what they show, but are simply dead images. They stand as a perfect symbol of the destructive selfishness of the copyright world, which never has any qualms about diminishing the online experience of everyone else in the forlorn hope of making a quick buck for themselves.

Featured image by Stable Diffusion.

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