The worst case scenario for Canadian Heritage Minister Pablo Rodriguez, the Canadian news sector, and the Canadian public has come to pass: Google has announced that it will block news links in Canada in response to the mandated payment for links approach established in Bill C-18. The decision, which the company says will be implemented before the law takes effect, will cover search, Google News, and Google Discover. The decision – which government seemingly tried to avoid with last minute discussions with Google executives after it became apparent that the risks of exit were real – will have lasting and enormously damaging consequences for Canadians and represents a remarkable own-goal by Rodriguez who has managed to take millions away from the news sector and left everyone in a far worse position than if he had done nothing at all.
While Meta’s decision to exit the news market was entirely predictable, the Google response was always more uncertain. The company made it clear it was deeply concerned by a mandated payments for links approach with uncapped liability, viewing it as a risky framework for any business and establishing a dangerous precedent globally for the free flow of information. Yet it also valued news in a way that Meta does not. Meta pointed to data demonstrating that news contributed little to user news feeds and that was highly substitutable. By contrast, Google search results are its bread and butter and removing Canadian news results makes its flagship product undeniably worse. Google has stopped its Google News service in some countries in response to legislative developments, but removing search results brings more significant consequences to users of the service.
That surely presented an unwelcome choice either way: agree to flawed legislation that creates a dangerous precedent on paying for links or knowingly decrease the value of its own service. By choosing to block links, the damage will be felt across Canada. For the news sector, this could result in news outlets shutting down altogether as the combined effect of blocked news links and news sharing on the Google and Meta will cut some sites traffic in half and lead to huge revenue losses. Services with existing deals with likely see that revenue disappear as well. For Canadians, Google search will be less reliable with Canadian news links removed and the Google News service shut down. This is likely to increase reliance on foreign news services and lower-quality services at the precise time that concerns over misinformation continue to grow.
But it is the government and Canadian Heritage Minister Pablo Rodriguez that must face the blame for having badly blundered this file. There were better options readily available that would have opened the door to increased contributions from Internet platforms toward journalism without the negative consequences associated with mandated payments for links, interference with press independence, and the direct harms to smaller and independent media outlets. Yet it bet that this was all just a bluff and that it could threaten its way into mandated payments. It was a bad bet that seemed to ignore both economic reality and the very real risks it was creating. The government regularly pointed to the Australian experience as evidence that it would emerge with a win for the sector. Instead, it is likely to become the global example of disastrous government policy that abandoned principles of an open Internet, failed to take the risks of its policy seriously, and paid a severe price.