Madam Chair, members of the committee, thank you for inviting me to speak today to Bill C‑18, the online news act.
Today we want to share directly with the committee our concerns about this draft legislation and the unintended consequences we worry may flow from it in the fullness of time.
We have three main concerns: the true division of value between platforms and publishers, the unintended consequences of payment for free marketing, and the stifling of innovation.
First, the framework of the current legislation presumes that Meta unfairly benefits from its relationships with publishers when, in fact, the reverse is true. The Facebook platform helps publishers. Meta does not scrape or index news content or links. Like any business, non-profit, public or political organization, Canadian news publishers choose to share links from their websites on Facebook to reach a wider audience, which leads to increased readership of their stories. This, in turn, allows them to sell more subscriptions and advertising.
In Canada, we estimate that Facebook feeds sent registered publishers more than 1.9 billion clicks in a single year. That's free marketing for their content in the form of link posts that has an estimated value of more than $230 million. Simply put, this is what it would have cost news publishers to achieve the same outcome on Facebook if that space wasn't provided to them for free.
We can see that Facebook already helps Canadian publishers to the tune of hundreds of millions of dollars a year.
Second, the online news act would force Meta to pay news organizations for content that publishers voluntarily place on Facebook. In blunt terms, we would be forced to pay publishers for giving them free marketing on Facebook, which I just noted was valued at $230 million last year. This would be a most peculiar and unorthodox arrangement.
In the current economic climate, and as we prioritize long-term investments in the metaverse and in the growth of short-form video in response to competition and user preferences, we are being asked to acquiesce to a system that lets publishers charge us for as much content as they want to supply at a price with no clear limits. I hope you will agree with me that no business can operate this way.
Third, successful regulation must be grounded in fact. We have long supported regulation that sets clear and fair rules for everyone and an open Internet where creativity and competition can thrive. But as independent experts have warned, a policy that unfairly subsidizes legacy media companies now struggling to adapt to the online environment is an approach that will harm competition, reduce trust in media and make the transition to digital models even more difficult.
A recent report by the Parliamentary Budget Officer only underscores these real concerns. According to the PBO's analysis, it is broadcasters, including the public broadcaster, that will receive the lion's share of transfers, leaving less than 25% for newspapers. Also, as someone who has spent over five years listening, learning and supporting digital news entrepreneurs, it is concerning that Bill C-18 is seemingly even less helpful to them. We encourage the committee to find more opportunities to hear from the next generation of Canadian digital news innovators.
Let me be clear: Canada is incredibly important to Meta.
Canadians will always be able to use Facebook to connect with friends and family, to help build communities and to grow their businesses.
However, faced with adverse legislation based on false assumptions that defy the logic of how Facebook works, which, if passed, will create globally unprecedented forms of financial liability for news links and content, we feel it is important to be transparent about the possibility that we may be forced to consider whether we continue to allow the sharing of news content on Facebook in Canada.
As always, we remain open to working with this committee and the government on solutions that are fact-based and reflect the interests of all Canadians.
Thank you.