Online news

Canada’s online news law could force digital platforms to pay millions

If passed, Canada’s Online News Act, Bill C-18, could cost digital platforms like Google and Facebook a combined total of $329.2 million (Canadian dollars) per year. A Report of October 6, 2022 from the Office of the Parliamentary Budget Officer said news organizations can expect to pay approximately $20.8 million (CAD) in transaction and compliance fees when negotiating their first deals with digital platforms.

Bill C-18 was introduced by the Honorable Pablo Rodriquez, Minister of Canadian Heritage, on April 5, 2022. The objective was to regulate “digital news intermediaries in order to improve fairness in the Canadian marketplace digital news and contribute to its sustainability. DISCO Project reports (Disruptive Competition Project).

The The Canadian government explained that the Online Information Act aims to:

  • Ensure fair revenue sharing between digital platforms and media
  • Provide for collective bargaining by media outlets
  • Promote voluntary commercial agreements between digital platforms and news outlets with little government intervention
  • Establish a mandatory arbitration framework to handle situations where digital platforms and media fail to reach a commercial agreement
  • Define the roles and tools of the Canadian Radio-Television Telecommunications (CRTC) as regulator of legislation

News outlets can qualify under the Online News Act by meeting one of two criteria.

  • They are designated as a Qualified Canadian Journalism Organization (QCJO) under the Income Tax Act, s. 248(1), or
  • These are news outlets that employ two or more reporters in Canada, operate in Canada, and produce news content that focuses primarily on topics of general interest.

Media are not limited based on the format of their content. Written, audio and audiovisual information is covered by the Online Information Act.

Google’s reaction to Bill C-18

On May 16, Sabrina Geremia, vice president and general manager of Google Canada, described the technology business concerns on the online news bill. Geremia said nearly 80% of Canadians get their news from a wide range of sources – online news sites, apps, newsletters, aggregators, social media feeds, television and print. Worldwide, Google helps users find news sites more than 24 billion times a month. She also acknowledged that the internet has caused some disruption to the business models used by news outlets.

“The government has come up with the Online Information Act as a solution to all these challenges. While we support regulations that enable a diverse, sustainable and innovative Canadian news ecosystem, we are concerned that the current version of the Online News Act will actually harm Canada’s news industry and Canadians’ ability to find and share news safely online,” Geremia wrote.

Source: Bigstock Photo

Google’s concerns include the following:

  • The proposed legislation could create a lower standard for journalism, as the definition of eligible news organizations is too broad and could impact quality and misinformation.
  • The proposed legislation would “break Google search”. Google sends over 5 billion visitors to Canadian media every year at no cost. The Online News Act would reverse this trend, forcing digital platforms to pay for the right to share news.
  • Bill C-18 would give regulators “unprecedented influence over news.”

“We support thoughtful regulation. And we are ready to play our part in supporting Canadian journalism. But we’re concerned that if the proposed bill becomes law, it would likely worsen the situation for the news industry and hurt your ability to find quality news. We are pleased to hear that the government is open to constructive conversations and we look forward to working together as it refines its approach,” said Gérémie.

Google, which calls the law a “link tax”, then wrote to all MPs and Senators of Parliament saying the bill needed more work and should not be fast-tracked, reports CTV News. The bill was fast-tracked by the Commons and sent to committee for further consideration. It will then return to the House of Commons and the Senate for further debate.

Canada’s Justice System Explains the Online News Act

In June, Canada’s justice system explained that the Online News Act, if passed, would regulate digital news intermediaries that make news content produced by news organizations available to people in Canada. . Search engines and social media services fall under the definition of digital news intermediary. Messaging services that primarily allow people to communicate with each other in private would be excluded from the scope of the law. The law will only apply to digital information intermediaries if there is a significant imbalance of bargaining power between the operators of a digital information intermediary and the news organizations producing the information content that ‘a digital information intermediary makes available’, says the justice system.

Insider grip

This is a much deeper topic with various perspectives (e.g. digital platforms, media, public, Canadian government), much more than we can explore in this story. However, this is an important topic to watch as different countries explore how to redress the power imbalance between digital platforms and news publishers while creating some long-term financial sustainability for news outlets. . Canada is building on Australia’s experience and other nations will certainly follow. If passed, this legislation will set another important precedent for how digital platforms and news publishers intersect.