this post was submitted on 01 Sep 2023
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And if Facebook and Google simply refuse to link to the sites that charge the money to link to them. What will happen then?
It's simple, they can either take it or leave it. If the assessments of profitability of this content are accurate, it will still be profitable for Google and Meta if they cave to demands. They'll hem and haw for a while, but they'll take the deal. At the end of the day, they're capitalist corporations, and they won't simply leave money on the floor.
That $234 M would be roughly 2% of the $11.2 B in revenues the two platforms are making in Canada. Does the Canadian news segment account for more than 2% of that revenue?
Not sure there's much reason for Meta to cave: Meta's Canada news ban fails to dent Facebook usage
Doesn't seem like news was providing Meta much value.
If I was the head of either of those organizations, which clearly I'm not, I would leave it. I I don't want to set a precedent for a global link taxation system I'd have to pay on all of my traffic and all countries. And once it's demonstrated on news, slippery slope applies, and then applies to More and more linked content until it applies to all links.
So I think foregoing the Canadian profit would make sense from a business perspective
Too bad for the platforms the floodgates have already been opened. Australia has already implemented similar legislation in which they caved.
https://www.wired.com/story/australia-media-code-facebook-google/
I don't think it's in the nature of capitalist corporations to put long term strategy over short term profitability.
"Then, at 1 am on February 26, 2021, news content started to reappear, reversing usersโ feeds to how they always looked. But behind the scenes, techโs relationship with the media had permanently shifted.
Google and Facebook did not leave; they paid up, striking deals with news organizations to pay for the content they display on their sites for the first time. The code was formally approved on March 2, 2021, writing into law that tech platforms had to negotiate a price to pay news publishers for their content"
I think you should take note how they made the law after the deals were struck. Canada however has already ascended their version into law, prior to the deals. There is nothing to negotiate in Canada. Abide by the law or get out.