If there was ever an action with a message, it was Google’s decision to block Canadian news sites for some people searching the internet. It came just as Parliament was reviewing a bill that had a lot to do with Google and Canadian news sites.
The message was this: Don’t even try it, Canada.
One day, whole swathes of information were disappeared from the internet that some Canadians see. Google told reporters it was just testing out its response in case the Parliament of Canada actually passes the law. It only affected about 4 per cent of Canadian users.
It’s not a threat, of course. Sometimes people just wake up with a horse’s head in their bed.
The Liberal government is up in arms, including Prime Minister Justin Trudeau, who obviously wants to engage in this political spat.
That might make you wonder why Google would make such a threat. And the reason why is pretty simple: Because they can.
Google knows it is powerful enough to threaten governments that try to regulate them. It holds a dominant position that makes it the front door to the internet and gives it monopolistic power – at least, that is the legal position of the government of the United States.
There is a good chance the threat can succeed. When a similar law was going through the Australian Parliament in 2021, Facebook blocked sharing of that country’s news and only relented when the government cut a deal.
To be fair, the bill that has Google flexing its internet-giant muscles in the face of puny Canada is a debatable thing, for sure. It would make online platforms that make news available to Canadian audiences pay compensation to the providers.
Google already has compensation agreements with several Canadian news organizations, including The Globe and Mail. But Bill C-18 would require big internet platforms to negotiate compensation for news content and links – and sets a process that includes arbitration and allowing collective bargaining by smaller news organizations.
Whether that is the right way to do things is up for debate. But that doesn’t make any sense if you leave out the central aspect: its market power.
That power, and the way Google uses it, is far more important than the details of C-18.
Google’s parent company, Alphabet Inc., is not just big, with a market capitalization of US$1.14-trillion and 2022 revenues of US$283-billion. And it is not just powerful. According to authorities in the European Union and U.S., it abuses its power.
Antitrust cases brought by EU authorities have led to €8-billion in fines. And in the U.S., the Attorney-General and eight states in January launched a lawsuit against Google – alleging that through acquisitions and anti-competitive business practices they have acquired monopolistic power over digital advertising, pushing out competitors in digital-ad technology tools, controlling exchanges and servers where buyers and seller meet, and profiting from it all.
In 2020, when Donald Trump was president, the U.S. Attorney-General and 11 states launched another suit asking courts to stop Google from “unlawfully maintaining monopolies in the markets for general search services, search advertising and general search text advertising in the United States through anticompetitive and exclusionary practices.” That suit called the company “the monopoly gatekeeper of the internet.”
When monopolies arise, governments should try to create competition, or dismantle them, or, failing that, regulate them. Alphabet is fighting such efforts.
In Canada, which is trying nothing so ambitious, Google is firing a shot across the bow: Don’t try it, little Canada, or your internet gets it.
Whatever happens, the warning should stick with Canadians for years. Whether Bill C-18 is good or bad, the threat is the thing. Google is trying to use its power to stop Canada’s Parliament from adopting a law.
That’s not unfamiliar. When Canadian authorities arrested Huawei Inc. executive Meng Wanzhou on a U.S. extradition request in 2018, Beijing threw two Canadians in jail. That sure showed Canadians they can’t act according to their own laws without consequences. It also showed Canada that it had better build alliances to cope with the way Beijing uses its power.
Now, Canada should be learning a lesson from Google. It’s not as much about Bill C-18 as it is Google’s power, and the way it uses it. That’s the issue that Canada and countries like it face now, and for years to come.