Meta’s President, Global Affairs, Nick Clegg, had been due to speak later today at a hearing of Canada’s Heritage Committee entitled ‘The Response of Companies in the Information Technology Sector to Bill C-18’. This was an opportunity to present and discuss Meta’s position in relation to Canada’s draft Online News Act (C-18), as Meta representatives did at a Senate committee last week.
Late on Thursday, the committee notified Meta that the title of the hearing had changed to ‘Tech Giants’ Current and Ongoing Use of Intimidation and Subversion Tactics to Evade Regulation in Canada and Across the World’. Clearly, it would be a very different hearing to the one Nick Clegg was invited to. As such, we have notified the committee that he will no longer be appearing. Meta representatives in Canada will attend the hearing.
Given the widespread interest in the Online News Act, not just in Canada but around the world as other legislatures grapple with the same issues, we are publishing the opening statement Nick Clegg had hoped to make.
Madam Chair, my name is Nick Clegg and I’m President, Global Affairs at Meta. I’m grateful for the opportunity to address this committee.
Madam Chair, the Online News Act is based on a fundamentally flawed premise. Meta does not benefit unfairly from people sharing links to news content on our platform. The reverse is true. Publishers choose to share their content because it benefits them to do so, whereas it isn’t particularly valuable to us at all. As such, we’ve taken the difficult decision that if this flawed legislation is passed, we will have to end the availability of news content on Facebook and Instagram in Canada.
The truth is, our users don’t come to us for news. They come to share the ups and downs of life, the things that make them happy and sad, that interest them and entertain them. Links to news stories are a tiny proportion of that – less than three percent of the content they see in their Facebook Feed.
But news publishers do find our services valuable. We estimate that Facebook Feed sent registered news publishers in Canada more than 1.9 billion clicks in the 12 months to April 2022. This amounts to free marketing we estimate is worth more than $230 million. Publishers choose to share their content because it drives traffic to their websites. It helps them sell more subscriptions, grow their audience and display their ads to more people than they might have otherwise.
The traditional news industry faces profound challenges. New technology has emerged, consumer behavior has changed, and old business models don’t work anymore. Of course, everyone wants quality journalism to thrive. But it makes no more sense to claim social media companies are taking money from publishers than to say car companies stole from the horse and cart industry.
It seems we’re having a debate as if the internet was frozen in time about 10 years ago. The way our users engage with content has changed dramatically. Just in the last year or two we’ve seen an enormous shift in people consuming creator content and short form video. Watching video is now more than half of time spent on Facebook and Instagram. People reshare Reels – our short form video format – more than 2 billion times every day on Facebook and Instagram, which has doubled in just the last six months.
The world is constantly changing and publishers, like everyone else, have to adapt. Asking a social media company in 2023 to subsidize news publishers for content that isn’t that important to our users is like asking email providers to pay the postal service because people don’t send letters any more.
And not all internet companies are the same. We’re not Google. They are an amazingly successful company that does extraordinarily useful things for people, but they operate a search engine that functions by using links to news web pages. Meta, by contrast, doesn’t solicit, need or collect content from news websites to put on our services. Our users – and in this case news publishers – choose to share it themselves. Globally, more than 90% of organic views on article links from news publishers are on links posted by the publishers themselves.
I’ve heard a lot in this debate about how this legislation is replicating what Australia has done. In fact, the laws are different in important respects – and C-18 will go further than the Australian legislation. First, the Australian code doesn’t apply to Meta because we haven’t been designated by the Treasurer there. If we do end up being designated and forced to pay publishers, we will be faced with the same difficult choice we are making in Canada. But perhaps more significantly, this legislation would make Canada the first democracy to put a price on free links to web pages, which flies in the face of global norms on copyright principles and puts at risk the free flow of information online. Canada – and Canadian liberals – have a long-standing reputation for believing in multilateralism, and for defending the free and open internet – C-18 would be a direct contradiction of that long held and honorable tradition.
I spent 20 years of my life as a legislator, so I understand how difficult it is to craft good policy and sensible legislation. In this instance, I believe C-18 is flawed legislation which would deliver bad economic policy too. The Parliamentary Budget Officer estimates that most of the funds generated by the Act will go to broadcasters, not the local and regional publishers it was supposed to support. It’s Robin Hood in reverse. The Act would subsidize big broadcasters at the expense of independent publishers and digital news sites, skewing the playing field so it’s even harder for smaller players.
Ultimately, this legislation puts Meta in an invidious position. In order to comply, we have to either operate in a flawed and unfair regulatory environment, or we have to end the availability of news content in Canada. With a heavy heart we choose the latter. As the Minister of Canadian Heritage has said, this is a business decision. It’s not something we want to do, but it is what we will have to do.