Senate begins oversight of Online News Act

The government’s Online News Act will not regulate the media nor will it require internet users to pay for links, a Senate committee heard. Tuesday, the Transport and Communications committee has begun its study of Bill C-18. The associate assistant deputy minister for cultural affairs at the Department of Canadian Heritage set out to clear up misconceptions about the legislation. “The bill does not regulate news media but rather sets certain conditions for news media to be eligible to participate in a mandatory bargaining process,” Thomas Owen Ripley told the senators. “The CRTC will make determinations on the eligibility of news businesses that can participate in mandatory bargaining based on criteria set out in the act.” Media companies may bargain collectively or individually, he added. Without the government proposal, large tech platforms like Alphabet Inc.’s Google or Meta Platforms Inc.’s Facebook would have no incentive to negotiate with news outlets. The bill will also provide a transparency that would not otherwise exist due to the involvement of the CRTC. Both domestic and international organizations are eligible to take part in the regime, Ripley noted. He added the proviso that outlets from nations under sanctions, such as Russia Today, would not be allowed to take part in the program. The act is drawn in large part from similar legislation passed in Australia. Ripley said Canada has been following how the Australian framework is working and has tweaked the current bill accordingly. For example, companies Down Under must be designated by the relevant minister; that would not happen here. He said there is no indication that consumers in Australia are paying more for social media since the introduction of their bill. Using the formula from Australia, he estimated that C-18 will generate revenues of $215 million for Canadian media holdings. About two-thirds of Australian funds come from Google, with the other third originating with Facebook. Committee chair Leo Housakos asked if the Americans would be likely to raise complaints that the bill violated certain conditions of the Canada-United States-Mexico Agreement on Free Trade (CUSMA). Isabelle Ranger, director of services trade at Global Affairs Canada, sought to reassure the Quebec senator. “CUSMA does maintain a cultural industries exemption from the Canada-US Free Trade Agreement from 1988, and the North American Free Trade Agreement from 1994,” she explained. “This provision is basically designed to ensure the agreement doesn’t impair Canada’s ability to adopt and maintain measures with respect to cultural industries including the online environment.” The second hour of the hearings featured two supporters of the bill and one dissident. Jean-Hugues Roy is a journalist and a professor at the Université du Québec à Montréal. He endorsed the government’s proposals. “C-18 is the less evil of the scenarios. It is a good way of distributing wealth on the platforms,” he said according to simultaneous translation. Canadians must have access to quality information, he stressed. The situation is so complex that, even as the first iteration of the bill is being considered, the government should be working on version 2.0. Also backing the bill was Chris Pedigo, senior vice president of government affairs for Digital Content Next. It is a trade organization made up of 60 major publishers like the New York Times, the Boston Globe and the Guardian. Major League Baseball is also a member. “Publishers’ brands are proxies for trust and value,” he said. “Inclusion of news content from premium publishers has certainly played a large part in developing the daily search and social media habits of Canadians allowing Google and Facebook to become dominant gatekeepers.” He estimated that 80 to 90 per cent of online advertising is going to the two tech giants. He dismissed Google’s claims that users would be forced to pay for links. “This is misinformation,” Pedigo exclaimed. The negotiation process will be different depending on the goals of the media firms, he stated. Smaller companies may pass up monetary rewards in favour of being able to reach a larger audience; large outlets will likely want to receive the cash. Former CRTC chair Konrad von Finckenstein opposes the bill but says now that passage is likely, he wants to work to make it better. He found four faults with the legislation as currently drafted. The act does not define who will be characterized as digital news intermediaries (DNIs), the term applied to the tech platforms. It does not explain what is being negotiated. What will be the outcome of the bill, he asked. And he wondered about the section allowing for findings of undue preference, since rankings are done by algorithms, he stated. Von Finckenstein conceded that the commission was the logical agency to handle disputes but had doubts that it has the manpower and the expertise to pull it off. The regulator will likely have to contract out the work, he speculated. Earlier, Ripley dismissed such fears. “The government believes the CRTC has the capacity and is the right regulator to do this,” the public servant told the committee. Witnesses did not put much stock in Google’s threats to leave Canada if C-18 becomes law. It is part of a continuing pattern, Pedigo said. It made the threat when the European Union introduced the General Data Protection Regulation. It said the same thing when Australia brought forward its bill. Nothing came of it. “There’s a pattern of behaviour from Meta and from Alphabet–Google, Facebook–when they come across a law they don’t like they often threaten to leave the market,” he said. Currently several American states’ attorneys-general are preparing lawsuits against the tech giants over market dominance and a bill, the Journalism Competition and Preservation Act, is getting bipartisan support in Congress. When Ripley appeared before the same committee last year to testify for the Online Streaming Act, Bill C-11, Housakos teased him that he would be back again for C-18. C-11 has gone back to the Senate, where some members of the Red Chamber are upset that some of their amendments were rejected by the government. Heritage Minister Pablo Rodriguez pointed out that the bill went through the longest study of any legislation in Canadian history. Reporters asked him about statements, mostly from the Conservative caucus, that the bill would censor the internet. “Ths bill has nothing to do with either disinformation or anything else related to that,” he told a scrum before cabinet met. “I challenge them to tell me what is in the bill. It’s simply asking the streamers to contribute to Canadian culture.” –Reporting by Paul Park at ppark@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

Senate begins oversight of Online News Act

News | April 25, 2023

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Senate begins oversight of Online News Act

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