the Online News Act and the deterioration of Canadian public credibility

In recent years, Canadian society is in face of an enormous crisis: the constant decline of

media credibility. According to the latest Reuters Institute’s Digital News Report conducted by

Newman et al. (2023), Canadians’ trust in news outlets has dropped 15% since 2016 (p. 115).

Medium is one of the two factors that influence social credibility; it has a close association with

public trust. Under this social context, Canadian government issued the Online News Act in late

September of 2023 to regulate digital news intermediaries for compensating sufficiently to news

outlets. This media policy will lead to the Canadian journalism being financially dependent on

major digital news intermediaries; furthermore, it will result in the eventual outcome of

compromising public trust in Canada.

The objective of the Online News Act is of righteous cause, which aims to support news

press from being unfairly compensated when their contents are made available on digital news

intermediaries; however, its underlying logic remains skeptical. The fundamental assumption

behind this legislation is that an unbalanced relationship exists between present Canadian news

outlets and internet platforms. Drawn from this premise, the logic behind the Online News Act

runs as follows: By providing news links on their digital platforms, searching engines and social

media software attract viewers from original news producers; as readers have migrated, so have

advertisers. Therefore, news outlets have to agree on inadequately compensated deals to assure

readers’ access to their news on these platforms; otherwise, they will lose more advertisers and be

on the verge of bankruptcy. As Angelucci and Cagé (2019) indicate that traditional news agencies

such as newspaper companies have been suffering a substantial loss from a sharp decline in their

advertising revenue (p. 319), the Act seems to be based on a legitimate fact; however, it’s the

logic that ascribes this plight of legacy news media to online news intermediaries requires further
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scrutiny. Katz (2023) depicts a predicament for producers who want to disseminate their contents

online. He suggests that for every content producer, they either choose to increase profits while

limit the scale of readership or emphasize viewership and rely on its scale to obtain indirect

profits (p.348). News outlets nowadays tend to select the latter option: They attain economic

benefits by granting free access of their news on online platforms. Therefore, the Act wrongly

accuses dominant digital news intermediaries of exploiting news press by freeriding their news

stories; rather, it’s a voluntary compromise that news outlets have to make due to the prevailing

utilization of digital technologies, the downfall of outdated business model for traditional news

media and the failure of constructing a new sustaining model. When a policy is entirely based on

a misdiagnosed issue, then its counterproductive effect is inevitable.

The most direct and conspicuous impact of the Online News Act is its financial influence

on Canadian journalism: It renders Canadian journalism financially dependent on dominant

digital news intermediaries. Generally, journalist is often viewed as a watchdog. To perform this

role, the primary criteria is to conduct an “independent scrutiny by the press of the activities of

government, business, and other public institutions” (Bennett & Serrin, 2005, p.169). Therefore,

constructing and maintaining contemporary watchdog role of journalist requires journalistic

independence. A crucial measure to realize this is to minimize the patronage from both

government and private sector. The legislation of copyrights is a significant epitome. It prompts a

majority of media outlets detached from patronage of church, royal household, etc. and receive

financial support from readership. This shift promotes news media to acquire a more independent

state and according to Netanel (2008), “without having to curry favor from ministers and nobles,

or their potential counterparts in the new Republic” (p.90). From this perspective, the Online

News Act apparently provides an ill-advised solution. By striking a monetary deal between news
3

outlets and dominant digital news intermediaries such as Google and Facebook, the proponents of

the Act believe that this could improve the economic conditions of current Canadian news press.

However, since news outlets are now relying on payments from these digital magnates to survive,

they will become more and more dependent on those companies. Instead of reviving readership

on legacy news outlets, the Online News Act induces another type of patronage, not that of

governments but of online platforms, which is even more problematic. One of modern democratic

government’s functions is serving for public interests; this trait requires governmental actions to

be more accountable for social construction. In contrast, private enterprises don’t shoulder this

responsibility; what’s worse, their profound commercial influence has been seen impacting

journalistic autonomy. For example, in their study concerning the power of commercial

influences on lifestyle journalists, Hanusch et al. (2020) discover that hard power is asserted on

lifestyle journalists by both advertisers and public relation firms. These private sectors impose

interventions on journalists’ selections and editions of relevant topics (p.1041). Hence, by

emphasizing dominant digital news intermediaries to compensate fairly to news outlets, the

Online News Act turns news agencies into close stakeholders of news intermediaries and

suppresses journalistic independence by assisting intermediaries more easily in inflicting control

on journalists.

By eroding Canadian journalistic autonomy, the Online News Act will carry its negative

effect to the next level, namely, impairing Canadian public credibility. Public credibility reflects

the credibility of social institutions and societal actors in the perceptions of general public; a

major way of how it is shaped is through the constant interaction between medium and the public.

As a channel that links between sources and the public, medium plays a role in producing and

distributing information concerning every aspect of the society, including political events,
4

commercial activities and so on (Gasher at al., 2020, p.21). In real-life scenario, the medium

takes its forms in practical objects such as newspaper, radio, television, etc. Through these forms

of medium, the public obtains knowledge of social events and thereby participate in decision-

making process regarding collective interests. The more independent media are, the more likely

that citizens will perceive information generated and conveyed by media as credible; in the

contrary, media credibility drops when they are more dependent on external forces. Therefore,

public credibility is highly correlated with the extent of media independence. As noted from a

report conducted by Brookings Institution (2020), online platforms like Google and Facebook

have posed manifest threats to democratic society by utilizing their algorithms to structure and

shape information we receive for engaging in public affairs. If digital news intermediaries are

worsening public credibility by permeating their ideologies into mainstream media, then

government should stimulate news media’s incentives in better scrutinizing these intermediaries,

in an aim to recover social trust. However, the Online News Act does the opposite. The outcome

of it thwarting journalistic independence sedates news media’s role in monitoring these platforms

and providing less biased information. Additionally, in his study of gauging the credibility of

three different news media, Kiousis (2001) suggested that newspaper tends to be the most

credible news media in comparison to television and internet. Since the Online News Act targets

mainly at improving the economic plight of newspaper companies, it’s predictable that newspaper

industry will be made more dependent on online news platforms. When a most credible news

medium is seen losing its independence, along with the Canadian government misconducted their

interventions, the deterioration of Canadian public credibility is inevitable and will be atrocious.

In conclusion, the Online News Act is a recent attempt by Canadian government

concerning a perceived crisis-level impact on the newspapers’ financial conditions by requiring

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internet platform companies such as Google or Facebook to subsidize for newspapers’ contents

displayed on their platforms; the Act is based on a premise of which a perceptible unfairness

exists between news outlets and digital news intermediaries. When online platforms pose threats

to news media, due to the latter’s indispensable status for preserving and enhancing Canadian

social credibility, it is government’s obligation to intervene and solve this issue, on condition that

the chosen remedy be based on an accurate diagnosis of the problem. However, the Online News

Act fails to reveal the core issue and generates an ill-advised solution. By making news media

organizations rely on payment from digital news intermediaries to survive and sustain, the Act

exacerbates media’s independency and ulteriorly, information conveyed through news outlets is

perceived less credible. Eventually, it results in the loss of social credibility among the entire

Canadian society.
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Bennett, W.L & Serrin, William (2005), The Watchdog Role. In Geneva Overholser & Kathleen

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