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Google, Meta respond to Canada’s Online News Act

By L. Carol Christopher

INMA

Pleasant Hill, California, USA

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Canada’s Online News Act is nearing the halfway point in becoming a done deal. There is still a 50% chance of a different outcome, of course. The Logic reported that despite efforts to influence members of Parliament, the bill was fast-tracked to reduce the amount of time before it was referred to committee.

The Act was introduced and had its first reading in the House of Commons on April 5, with the second reading on May 31. At that point, it was referred to the House’s Heritage Committee. Parliament, which went into recess, will reconvene in September. Then, after a period of debate — during which Google, Meta, and other parties may suggest amendments to the bill — it will likely go to the Senate. 

While some are quite happy that the Act has reached this point, others are clearly not. Many news publishers are in the happy column. Tech behemoths Google and Meta, well, not so much. Both companies seem to be gaining experience in dealing with national legislation and learning where they can push,and where they have to give (and just how much) if they are going to use news content.

What the Online News Act would do 

According to a Canadian government document, Bill C-18, or the Online News Act:

  • Proposes a regime to regulate digital platforms that act as intermediaries in Canada’s news media ecosystem to enhance fairness in the Canadian digital news market.
  • Introduces a new bargaining framework intended to support news businesses to secure fair compensation when their news content is made available by dominant digital news intermediaries and generates economic gain.
  • Seeks to support balanced negotiations between the businesses that operate dominant digital news intermediaries and the businesses responsible for the news outlets that produce this news content.

Also:

  • If one party initiates it, a final offer arbitration process would be used as a last resort to address scenarios in which negotiated agreements are not reached.
  • The Canadian Radio-television and Telecommunications Commission would support and oversee the administration of the regime.

The document also describes how the Act would be applied:

  • It would regulate digital news intermediaries — including search engines and social media, but not messaging services — only if there is “significant bargaining power imbalance between the operators of a digital news intermediary and the news outlets producing the news content” that the intermediary makes available.
  • This will be determined by statutory criteria, such as the size of the digital news intermediary, whether it occupies a prominent market position, and any regulations made by the government.
  • A digital news intermediary may also be exempted from the Act if its operator has entered into agreements with news businesses that satisfy certain conditions, such as providing fair compensation to news businesses and contributing to the sustainability of Canada’s news marketplace.
  • The Act will include criteria to determine which news businesses are eligible to participate in the bargaining process. To be eligible, a news business must be a qualified Canadian journalism organisation or meet other statutory criteria that include operating in Canada and regularly employing two or more journalists in Canada.

Specifically, the document refers to these inclusions in the Act:

  • A new bargaining regime to govern the making available of news content. Final offer arbitration if mediation fails — what Pablo Rodriguez, Canada’s Heritage Minister in the Liberal Trudeau Cabinet, called a “last resort.”
  • A description of the role and powers of the Canadian Radio-television and Telecommunications Commission.
  • Clauses covering the right to freedom of expression, fair trials, unreasonable searches and seizure. 

Non-compliance on the part of platforms could yield penalties of up to CA$15 million per day, according to a report published by The Canadian Press. 

Taylor Owen, associate professor at McGill’s Max Bell School of Public Policy, told Media in Canada in July: “I think they took many of the critiques of the Australian bill seriously, and many of them are addressed. Bill C-18 allows private deals between publishers and tech companies. Decisions will be made by the independent CRTC, rather than by ministers … . We’re in a place now where there are millions of dollars flooding in an entirely unaccountable and untransparent way from platforms to a small number of publishers. I think this bill sort of corrects for that — it allows more publishers to get access to [this] funding and it provides some democratic oversight, accountability, and transparency to those funding deals.”

Meta’s Canadian plans remain unclear: blocking news not ruled out

There is, of course, Facebook’s internationally known shutdown of Australian news. In response to Canada’s proposed legislation, it told a parliamentary committee that it has not ruled out blocking news in Canada, according to several sources. “The short answer is we’re still evaluating that legislation. We didn’t know the scope of it until it was tabled very recently. I will say we do have some pretty serious concerns,” said Rachel Curran, public policy manager for Canada at Meta, according to Canada’s ITBusiness. 

As Meta negotiates in Canada, the company has not ruled out removing Canadian news from its search as it did in Australia last year.
As Meta negotiates in Canada, the company has not ruled out removing Canadian news from its search as it did in Australia last year.

A controversy has arisen between the Department of Canadian Heritage and Curran over how much information Meta had access to prior to the bill’s introduction in April. Curran denies that it was consulted, while Heritage Minister Rodriguez said, “They lied,” according to CTVNews.

Google’s multi-pronged response

Google, as we mentioned, was among those that were unhappy with the legislation. Its response has been multi-pronged and strategic. Most widely known are these: 

• Blog posts. Sabrina Geremia, vice president and managing director of Google Canada, wrote in an April blog post: “We need to work together to get this right. We are aligned with the government’s goal of enabling a vibrant future for the news industry in Canada, and Canadians expect us to work together on this.” 

She also listed concerns that the Online News Act could/would:

  • Create a lower standard for journalism in Canada.
  • Benefit spammers and peddlers of misinformation.
  • Break Google Search. For everyone.
  • Give regulators unprecedented influence over news.

In addition, she claimed in the post that the Act represents a “link tax.”

INMA’s Digital Platforms Initiative lead, Robert Whitehead said, “’There’s clearly no link tax and there has been no threat to Google’s search business whatsoever.’”

• Individual offers. It is general knowledge that in addition to blog posts and attempts to influence academics and journalists, Google has made offers — pre-legislation — to individual newspapers, which it has done in Canada and other countries that have an eye on legislation.

• Lobbying efforts. The Logic wrote that these are “well known” and “duly recorded in the federal government’s lobbying registry.” It also reported a closed-door June meeting in California between Trudeau and Google CEO Sundar Pichai. Details are unavailable, although Trudeau tweeted that they spoke about democracy and a “vibrant and diverse online media.” 

Further, the Post wrote, part of Google’s public-policy team has been in touch with the chair and deputy chair of the Senate’s Standing Committee on Transport and Communications “to voice their opposition to the bill.” 

Google spokesperson Wendy Manton told the Post that Google “regularly engage[s] organisations with various points of view and will continue to work collaboratively with the government and the news industry on public policy solutions that support publishers of all sizes.” 

Google's battle in Canada has involved blog posts, pre-litigation offers to individual news companies, and lobbying efforts.
Google's battle in Canada has involved blog posts, pre-litigation offers to individual news companies, and lobbying efforts.

• Letters to legislators. The Canadian Press wrote that “Google has taken the extraordinary step of writing to every MP [Member of Parliament] and senator expressing fears that the Online News Bill is being rushed through Parliament without proper debate or consideration.” 

Specifically, the letter warns that:

  • The bill needs more scrutiny.
  • There are multiple flaws in the legislation that have far-reaching consequences.
  • The broad definition of “eligible news businesses” could mean that “foreign state-owned outlets could be eligible even if they are known sources of misinformation and propaganda.”
  • As currently worded, the bill’s “undue preference” provision may “prohibit features that elevate information from trusted sources (including government information) or reduce low quality information (including from eligible foreign state media outlets).” 

• A 60-day playbook. An internal Google document from October 2020, “DSA 60 Day Plan Update,” The Logic obtained detailed how, at that time, the “Privileged & Need-to-Know” document was intended as a working document for derailing legislation in the European Union. The stated goal was to “remove from the Commission proposal unreasonable constraints to our business model, our ability to improve our products or roll out new features/services.” One of the strategies the document included was influencing journalists, academics, and publishers. 

To accomplish its objective, the company lists “outreach to officials within” as well as “academic allies,” The Logic reported. 

Press Gazette reported Google’s vice president of news, Richard Gingras, “expressed concerns about the law [in April], describing it as ‘the kind of regulation that breaks the Internet.’” 

Where Gingas spoke is important, according to The Logic. 

Gingras spoke at a conference hosted by the Sociedad Interamericana de Prensa (Inter-American Press Association) in April, according to Press Gazette. The Logic wrote that: “Google has embarked on a quieter parallel campaign to foment opposition to the bill. The company has leveraged its power and ubiquity to spread its opposition amongst academics, journalists, and publishers whom the firm hopes will echo this opposition into the public square, putting pressure on legislators to change the bill or kill it outright.” 

Digital Content Next CEO Jason Kint called Newsgeist 2022 a Google-sponsored Canadian event at McGill University in Montreal, described by The Logic, “a de facto Google sounding board.” 

“’My experience in the last few years is that Newsgeist isn’t only a gathering for journalists, but also a chance for Google to infuse its own policy needs as global regulators continue closing in on it,” Kint said in The Logic. 

Since the event, independent publishers have become “increasingly vocal in their concerns over the bill,” the Post observed, and Google has offered to fund a government lobbyist to express publishers’ concerns to the federal government. They rejected the offer. But in the DSA document, Google defines such players as “third part[ies]” that can help “echo our message.” 

Some attending the events, the Post article noted, see such efforts as attempts to “recast legislative efforts” as a “government power grab,” calling it a “reliable Google talking point.”

The Logic further pointed out that, if the bill passes into law, it will “serve as further legislative precedent for other governments around the world” — Germany and the U.K. in particular have called it “impressive” and “a template.”

“What is important to Google is that governments don’t set precedents that can be applied globally, which is exactly what [Australia’s] News Media Bargaining Code and the [EU’s] DSA do,” Kint said to the Post. “On C-18, I see the same tactics from Google. Because the concerns around the imbalance of bargaining power are just as strong in the United States as they were in Australia and Canada.”

What’s next

Another government document published in April, when the Act was introduced, described the expected outcomes of the legislation:

  • A flexible regulatory framework that facilitates fair business relationships between digital platforms and news outlets.
  • Sustainability in the Canadian news ecosystem, including the sustainability of local news.
  • The maintenance of press independence and market innovation online.
  • Diversity within the Canadian news landscape. 

Conservative House Leader John Brassard accused the Liberal government of “limiting and stifling debate” when it fast-tracked the legislation. “I’m profoundly disappointed they moved a time allocation on such a highly contentious bill that needs significant work,” the Canadian Press reported. The Globe and Mail reported, however, that a strong coalition between the Liberals, the Bloc Québécois, and the New Democratic Party suggests that the bill “will likely proceed through the legislative process over the Conservatives objections.” 

Press Gazette suggested some news publishers may challenge some parts of the legislation, reporting one source was uncomfortable with the portion of the law that could “compel news companies to provide unspecified information required ‘for the purpose of exercising its powers or performing its duties and functions under this act.” 

Media publishers and their representatives seem confident. Speaking to Press Gazette, News Media Canada’s President and CEO Paul Deegan said, “Publishers throughout the Americas see Canada as a forward-looking democracy and they are excited by this legislation that builds on the Australian model.” 

He told INMA: “Across party lines, Canadian parliamentarians support the principles behind the Australian-style legislation. We are confident they will pass good, balanced made-in-Canada legislation that ensures that more Canadian publishers, including smaller ones, can negotiate fair content licensing agreements, while preserving an open Internet. We hope this will happen by year end.”

About L. Carol Christopher

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