U.S. President Donald Trump and former Brazilian President Jair Bolsonaro are both infamous for their unfiltered and disinformation-laden use of social media. This routine spreading of disinformation serves a purpose for these men and their extremist political projects—as well as for the social media firms that help to spread it without any apparent concern or legal liability for the societal impacts and outcomes. The wide and deep spread of disinformation on the internet has been tied to accelerating mistrust in democratic institutions and social breakdown.
Some countries are trying to change this state of affairs by introducing measures to strengthen digital sovereignty—and they are coming under intense attack from the Trump administration. One recent article referred to President Trump as “Big Tech’s Personal Lobbyist,” for his efforts to undermine U.S. state and international efforts to regulate or tax the enormous wealth of digital economy giants.
Canada has two opportunities to push back against American bullying in this regard and regain some freedom to pursue its own digital sovereignty. One of those opportunities is the upcoming review of the Canada-U.S.-Mexico Agreement (CUSMA). The other is a proposed digital trade agreement with the European Union.
Digital sovereignty versus liability
There is no single comprehensive definition of digital sovereignty, but the term loosely describes the ability of a nation to regulate the online spaces its citizens frequent. Countries may do so to restrict hate speech, to support local companies or innovation, or to ensure digital transactions with multinational firms are taxed fairly.
Germany passed a Network Enforcement Act (NetzDG) in 2017 to restrict access to content often seen elsewhere as “lawful but awful” by allowing for the use of fines to compel takedowns by social media companies and hold them accountable – thus helping ensure a higher standard of online discourse. The U.K.’s Online Safety Act protects minors from mature content, and the European Union’s General Data Protection Regulation sets high standards for privacy and data sharing by online companies.
In Canada, the Online News Act and Online Streaming Act encourage the consumption of domestic cultural or news content, while the now-axed Digital Services tax was designed in part to tax largely untaxed digital economy revenues and level the playing field between large U.S. and smaller domestic digital economy firms. Sadly, the DST was recently rescinded under pressure from the Trump administration.
Importantly, all of these laws and frameworks allow for national regulation without foreign interference—hence the term, digital sovereignty. They do this by placing duties and obligations on online platforms while simultaneously creating a structure for legal enforcement measures like the ability to impose significant fines for non-compliance. This liability is precisely what the Trump administration opposes and is fighting on multiple fronts on behalf of U.S. tech giants.
In the United States, Section 230 of the Communications Act shields social media platforms and online streaming companies from liability for user-generated content—regardless of whether or not those users are real people, bots, or actively promoted by companies’ algorithms. Prior to the second Trump presidency, the U.S. government had begun forcing this legal regime onto other countries inside ecommerce and digital trade chapters within U.S. trade agreements.
CUSMA, for instance, includes similar language to Section 230 in its digital trade chapter. Most notably, Sections 19.17.2 and 19.17.3 limit the ability of member countries to hold digital platforms accountable for harmful or objectionable content unless the platform itself created the content. This, of course, diverges from the way in which media companies have historically been responsible for what they publish.
Collectively these form a liability shield that complicates efforts to enforce new laws, such as the now-defunct Online Harms Act, which sought to hold social media firms responsible for more than just defamation. As it stands, such measures might be effectively unenforceable under CUSMA’s (current) terms.
Making matters worse, the Trump administration has shifted from digital legalese in trade deals to gunboat diplomacy in support of U.S. tech firms desperate to avoid liability, taxation or competition wherever they operate. Canada has good reasons to back out of some of the language it agreed to in CUSMA while forging cooperative partnerships with countries with more responsible regulatory regimes.
Brazil: A Case Study
Brazil’s recent history offers a cautionary tale. In 2015, the adoption of the Marco Civil da Internet limited the government’s ability to regulate online content, a position welcomed by the United States and aligned with Section 230 principles. However, in the run-up to Brazil’s 2018 presidential election, disinformation took hold—research shows that 86 per cent of voters encountered false claims about rigged voting machines and a majority of Bolsonaro supporters believed the story. This narrative largely spread through WhatsApp, owned by U.S.-based Meta (formerly Facebook).
Two years into Bolsonaro’s presidency, with disinformation running rampant, Brazil’s Supreme Federal Court resolved to remedy the deluge and launched investigations. These investigations made evident that Bolsonaro and his supporters had created bot networks to disseminate fake news—what we might rightly call disinformation, conjured with the intent to deceive.
Bolsonaro is now being charged with election interference and abuse of power, a slew of charges related to his attempted coup d’etat following his defeat in the 2022 Brazilian election—in which his supporters attempted to storm the capital and overturn the election results with the backing of a number of military figures, some of whom have admitted to plotting to kill Brazil’s elected president, Luiz Inácio Lula da Silva, better known as Lula. They planned to justify their actions using false narratives of election fraud.
The Brazilian government, in the aftermath of the failed coup attempt, proposed the Law of Freedom, Liability, and Transparency on the Internet, commonly known as the “Fake News Bill,” which included measures to control group messaging, required user identification in cases of suspected bot activity, and sought to limit the spread of false information of any kind.
U.S. tech companies vociferously opposed the measure, and the law was eventually shelved in May 2024. President Trump, for his part, has taken to denouncing Brazilian courts’ judicial process against Bolsonaro as a “witch hunt,” threatening 50 per cent tarriffs on Brazilian imports and the U.S. government has imposed visa restrictions on Brazilian Supreme Court Justice Alexandre de Moraes (along other unspecified persons related to him). The U.S. government has also initiated an investigation under the Trade Act on the grounds that Brazil’s attempts to regulate the internet constitute “attacks on American social media companies,” according to the U.S. Trade Representative (USTR).
On July 30, the U.S. announced it was employing National Emergency measures under the false claims that Brazil’s judicial actions are politically motivated and include the de-platforming political opponents, and promoting disinformation. The announcement claims that the so-called “persecution of their former president” is contributing to a “breakdown in the rule of law in Brazil,” and even pose threat to “the national security, foreign policy, and economy of the United States.” It claims the Brazilian government is infringing upon “the free expression rights of United States persons, violate human rights, and undermine the interest the United States has in protecting its citizens and companies.”
The U.S., then, is trying to frame Brazil as performing “unfair foreign practice[s] affecting U.S. commerce” for trying to protect its democracy. The USTR, having concluded the supposed veracity of their concerns, is now imposing a total tariff of 50 per cent on Brazilian imports to the U.S. (starting seven days after announcement on July 30). The U.S. is even abusing the Magnitsky Act (originally designed to hold Russian officials accountable for human rights abuses, and since employed to sanction individuals worldwide for corruption and rights violations) to sanction Brazilian Supreme Court Justice Alexandre de Moraes—now, any U.S.-based assets he has are now frozen.
Where do we go from here?
Unlike Canada, which jettisoned its Digital Services Tax in June with nothing to show for it in negotiations with the Trump administration, Brazil’s current president Luiz Inácio Lula da Silva has, so far, resisted American pressure to kill the online liability legislation. Canada may have a chance to redeem its digital sovereignty in both the forthcoming CUSMA review and fledgling negotiations on a Digital Trade Agreement (DTA) with the European Union.
In relation to the forthcoming CUSMA review, Canada and Mexico should jointly push to remove both Sections 19.17.2 and 19.17.3 from the digital trade chapter so that social media companies can safely be held liable for the content they disseminate, as allowable in Canadian law. In fact, much of the digital trade chapter should be revised or pulled out of CUSMA, including sections prohibiting governments from requiring sensitive personal information be kept on domestic servers.
With respect to the EU digital trade deal, Canada’s priority should be to learn from and consider harmonizing with digital sovereignty policies in Europe. We could introduce measures comparable to Germany’s NetzDG, for example, or adopt GDPR-like protections for personal information and privacy online.
Denmark is embarking on reforms that would grant Danes copyrights to their own image to inhibit the spread of deepfakes. Canada could work with the EU on a new version of our Online Harms Act, which in turn would empower Canada to better protect its citizens against rampant disinformation—an issue that, according to recent polling, a significant majority of Canadians believe affected the last federal election.
As the global debate over digital sovereignty intensifies, Canada stands at a pivotal juncture. The outcome of upcoming trade negotiations and legislative reviews will determine whether or not the country can defend its right to regulate its digital landscape, hold foreign companies liable for their actions, and protect Canadian citizens from disinformation. For the sake of Canadian democracy and the integrity of our public discourse, now is the time to set plans in action.
