Canada Dry: why Canada offers a guide to where the regulation of YouTube, TikTok et al is going

It seems like the regulatory and political oversight of the Tech companies is accelerating day by day and there has been much newsflow this week. In India, the Police raided the offices of Twitter following its marking of a tweet by a senior official of the ruling BJP party as “political” (LINK). The European Commission opened a formal anti-trust probe into Facebook’s position in online classified marketplaces (LINK), a move that does not seem to make much sense, at least in terms of the argument (see my post on the move, LINK).  

Perhaps, the most interesting case comes from France, where Google and French regulators are reportedly close to a deal surrounding an investigation into whether Google abused its position in selling online adverts by giving itself an advantage against non-Google online bidders (LINK).  If French regulators and Google do reach a deal, expect to see more similar investigations taking place, especially as publishers have now realised that complaining loudly about Facebook and Google and putting pressure on national Governments leads to renegotiated content deals with the platforms. 

Finally, it is worthwhile taking a look at interview comments from Republican Florida Governor, Ron DeSantis  who is widely seen as the (current) leading 2024 Republican Presidential nominee if Donald Trump does not run again, and who is also increasingly running on an anti-Big Tech platform (LINK) . DeSantis says that Florida intends to bring in a major data privacy bill next year. Given DeSantis’ known antipathy to Big Tech and political ambitions, expect it to be aggressive. It also raises interesting questions about whether Big Tech and advertisers face having to rework what they did to comply with their obligations under the California Consumer Privacy Act, which became the de facto privacy standard just when they are dealing with a proposed new privacy Bill in New York (LINK)  

However, the story that has the potential to have the most lasting and far-reaching consequences is coming out of Canada where a Bill is going through Parliament forcing social media platforms such as YouTube and TikTok to prioritise Canadian content (LINK). The Bill was introduced last November and originally mirrored the EU regulations that forced streaming companies such as Netflix and Disney+ to promote European content. However, last month a provision was added that would extend the Canadian content provisions to the online social media video platforms.  Unsurprisingly, YouTube has attacked the Bill but it is likely to pass given the support of the Bloc Quebecois (BQ), which is concerned particularly about French-language content. Together, the ruling Liberal party and BQ have 186 seats out of 338 in Canada’s House of Commons (LINK). 

So why is this development interesting? Firstly, it is likely to be copied by other countries, or at least certainly Western countries (countries like China have their own measures and India seems to be heading down the enforcement route). Australia’s stance against Facebook and Google, for example, has been seen as a success in that it has forced the Big Tech companies into new content deals with major publishers (LINK), and is being copied by others (in France, the major publishers were originally parties to the case cited above but withdrew when they signed deals with Google). 

Secondly, it is likely that YouTube and TikTok will be increasingly regulated like other video platforms, such as television. One of the provisions of the Bill is that Canadian content uploaded to these sites will be subject to the regulation by the Canadian Radio-television and Telecommunications Commission (CRTC), the main Canadian regulatory body for television content. It is easy to see this mirrored, at one stage or another, in the European Union and the UK, as well as markets such as Australia. The biggest question might be the United States. My view is, at some point, yes and that is more likely to happen under a Republican Presidential administration than a Democrat one, given the growing Republican appetite to regulate Big Tech (LINK). 

Put simply, this approach makes perfect sense. Ironically, YouTube has provided the clearest reasons why this is the case. YouTube has its own premium streaming platform but, more to the point, it has made the case for several years now that it is a credible alternative for TV advertising money and that it has TV-style reach (there are some serious question marks over this claim but that is for another article). It even has its own version of the upfronts highlighting its upcoming content, in the same way the major broadcasting networks do to attract advertising money. Yet, when it comes to regulation, Google / YouTube has always played the “Ah yes, but we are tech, we are not like TV”. That worked for a long time but probably no longer. 

This could also have some interesting knock-on effects when it comes to areas such as measurement and transparency. If the platforms are increasingly seen as similar to television, and regulated as such, then that is likely to lead to greater calls for the platforms’ audiences not only to be measured in a similar way (and there are also moves underway by the likes of Nielsen and the UK’s Project Origin to do so) but also to show similar levels of transparency in areas such as how content is displayed, adverts are priced and so forth. The tech companies may have a lot less leverage in the future to hide behind their status when it comes to providing information. 

That leads onto a third point, that regulators have finally worked out what these companies truly are. Many of the Big “Tech” companies, such as Google and Facebook are actually Media giants. They go after advertising revenues and also provide viewing content. Google’s Search product is a direct successor to the old Classified Directories, or Yellow Pages, businesses that used to dominate much of the local advertising market. YouTube and TikTok are video content platforms offering reach in much the same way as television (I don’t think Facebook fits into that same category though but it is still, primarily, about attracting advertising). 

That is now changing. Across the world, regulators and legislators are becoming more emboldened. In the United States, for example, Big Tech is facing multiple lawsuits from a collection of states (with Texas a prime mover) over their dominance in the market while Congress is scrutinising them more. Big Tech has also become a key political issue, as I explained previously (LINK). In Australia, the UK and Europe, regulators are joining the dots more and more, realising that the Tech companies are, in effect, masquerading as media giants and then taking the appropriate response. They may still get it wrong (as in the case with the Commission and the Facebook investigation on marketplaces) but they are heading in the right direction. 

The fourth point is that the Canadian move is likely to be successful at promoting Canadian content. YouTube, TikTok and others are likely to be forced to rewrite their algorithms to promote Canadian content when they identify a Canadian-based IP address. That is likely to lead to greater efforts to secure such content. Some say any such law will have unintended consequences such as reducing Canadian content prominence outside Canada. However, there is evidence already that such content quota rules encourage investment in country-specific content, for example when the European Union forced streaming services to have at least 30% of their content to be of European origin (LINK). 

Finally, the new regulations are likely to hasten the development of a two-tier world when it comes to mass market video content (Television is included within this definition). Globally, such rules are likely to reinforce the dominance of the major online platforms such as YouTube and TikTok who can afford the cost and resources to cope with these rules and regulation. However, on a national level their power is likely to come under more challenge from national providers, often the Broadcasting groups, who are in a better position to promote local content and are possibly more attuned with the needs of local audiences. This is one of the main drivers in the recent consolidation amongst broadcasting groups, whether TF1 and M6 in France (see my commentary here: LINK) or between Spanish-language broadcasters US-based Univision and Mexican Televisa (which, technically, is not focused on one country but which is based on the Spanish language segment in the Americas). 

Never let it be said Canada is not interesting.