Peter Nowak: Meta just showed us what can happen when a dominant platform can dictate terms

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The client was not given the opportunity to put restrictions on the content or review it prior to publication. by BDCPeter Nowak: Meta just showed us what can happen when a dominant platform can dictate termsPeter Nowak: Meta appears to be leveraging its dominance of social media into advantages in its other efforts, especially AILast updated 8 minutes ago Meta Platforms Inc. headquarters in Menlo Park, California. Photo by Nick Otto/Bloomberg filesThat’s what Meta Platforms Inc. appears to be trying to do with businesses that use Facebook, Instagram and WhatsApp. The tech giant wants to change its terms so that it can scrape content from websites associated with business accounts on its platforms, potentially turning the work of its own customers into fuel for competing products.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountIt’s a breathtaking abuse of leverage that is potentially anti-competitive.This advertisement has not loaded yet, but your article continues below.The new terms were first reported by Nieman Lab on Oct. 15, triggering an outcry from news publishers around the world, including in Canada. Under the terms originally scheduled to go into effect on Oct. 30, Meta would be able to use web scrapers to collect content from accounts that manage pages and groups, run advertisements, push marketing messages and use the platform’s business account dashboard.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThere’s no opt-out. Meta’s message to businesses is blunt: “If you do not agree to the updated terms, please stop all access or use of our products for business or commercial purposes.”According to the Nieman Lab report, Meta’s original plan appeared to leave the door open to use the scraped material to train its AI systems. Following the backlash, the company delayed implementation till Nov. 20 and revised the language, removing the word “train” and limiting the stated purpose to “advertising and business products.”Meta said the delay will give it more time to explain the changes, but legal experts have noted that the new wording doesn’t specifically rule out AI training.This advertisement has not loaded yet, but your article continues below.For news publishers, the threat is stark — their journalism could be used to improve AI products that may ultimately compete with them for readers, advertising and revenue. They would be helping build the very tools that undermine their businesses.But the problem extends well beyond the news industry. At its core, this is a reminder of what happens when a dominant platform can dictate terms to users that have few realistic alternatives.Publishers have had fraught relations with Meta for years, particularly in Canada. In 2023, they lobbied for the Online News Act, which sought to make certain digital platforms compensate news organizations for making their content available. Meta responded by blocking news content on Facebook and Instagram in Canada.Nevertheless, news organizations continue to maintain business accounts for advertising, marketing, communications and other commercial purposes, which leaves them in an awkward position. They may no longer be able to share news links as they once did, but they still have reasons to use Meta’s services. Abandoning its apps altogether means sacrificing access to customers, audiences and business tools.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Meta has its hooks deep into the news business. That’s what happens when one company ingrains itself so deeply into not just business operations, but the internet as a whole. It doesn’t have to win users or customers on its own merits — it can simply make walking away too costly.Canadian courts have long frowned on so-called contracts of adhesion — where one side holds all the cards and forces the other into take-it-or-leave-it terms — especially when it comes to tech giants.In just two relatively recent examples involving Meta, the Supreme Court in 2017 overruled boilerplate language in Facebook’s terms regarding where disputes with the company must be heard in relation to a class-action involving sponsored content filed in British Columbia. And in a case brought by the Privacy Commissioner of Canada, the Federal Court of Appeal in 2024 ruled that clicking “I agree” on a Facebook contract does not equal meaningful consent.Of further concern is the fact that Meta appears to be leveraging its dominance of social media into advantages in its other efforts. When users sign up to its social media apps for the purpose of communicating, cutting them off if they don’t agree to allow their content to be used for AI purposes could be considered tied selling and abuse of dominance — both of which are potential violations of the Competition Act.This advertisement has not loaded yet, but your article continues below.Canadian publishers are already engaged in legal battles with U.S.-based AI companies. The Globe and Mail Inc., Torstar Corp., Canadian Press and Postmedia Network Canada Corp., which publishes the Financial Post, recently filed a lawsuit against Anthropic PBC in Canadian court arguing that the company breached copyright and illegally used their content to train its models.Publishers may ultimately decide that licensing their journalism to AI companies makes business sense and they may even welcome the opportunity to negotiate such deals, but that choice should be theirs. And given the cost of producing original journalism, compensation should be part of the conversation.If Meta doesn’t back down on these changes, it should surprise no one if further lawsuits follow. Just as a landlord copying a tenant’s products and mining its private business plans at the threat of tossing them onto the street shouldn’t be tolerated, neither should the digital equivalent.Peter Nowak is the publisher of Do Not Pass Go, a podcast and newsletter focusing on competition issues in CanadaThis advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.