Heritage Committee begins debate on #C18 the Online News Act.

September 27, 2022

Members of the Commons Heritage Committee are back on Parliament Hill following summer break —possibly still numb from the filibuster and closure on Bill C-11 the Online Streaming Act— and ready to study the Liberal government’s next media bill, the Online News Act C-18: sometimes known as “FaceGoogle pay-for-news” legislation.

In two days of Committee hearings including today, MPs invited a number of witnesses who sparred over whether the Bill is a good or bad thing.

I’ve written in support of the Bill several times here, here, here and here. For the opposing view, you can read Michael Geist here, or former Calgary Herald Editor Peter Menzies here. There is also an article by Internet Society Vice President Konrad Von Finckenstein that identifies the problems he sees in an Act that he clearly doesn’t like.

If I may be as helpful as I am opinionated, what follows is a synopsis of the Bill’s provisions with select bullet points on what some say are trouble spots.

Sections 3 and 4 describe the overall objective of the Bill (“enhancing fairness in the Canadian digital news marketplace”) as well as principles favouring freedom of expression and journalistic independence when the CRTC or the courts are asked to interpret the Bill. Section 2 includes some key definitions.

• Section 2 of the Bill says the scope of bargaining for fair compensation includes news content that is accessed or indexed through links or partial text, likely the legislative draftspersons’ anticipation of regulatory avoidance strategies by Google and Facebook. Michael Geist says this is overreach.

Sections 6 to 10 establish which digital platforms are subject to the Act as “Digital News Intermediaries.” (DNIs) At the moment, it’s anticipated the only DNIs will be Google and Facebook as they were in Australia.

Sections 11-17 describe the exemption option for Google and Facebook should they be able to convince the CRTC they have made enough voluntary deals with Canadian publishers and broadcasters for fair compensation, dispensing with the need for formal designation and arbitration proceedings. This exemption route prevailed in Australia.

• The key criterion for granting DNIs an exemption is whether the platform can strike voluntary deals with “a significant portion” of news organizations, implying that some news organizations could be left out in the cold without a deal. In Australia, Facebook refused to make a deal with a small public broadcaster and the investigative news site The Conversation but still achieved an exemption under a similar provision in the Australian legislation. Small Canadian news outlets are worried this could happen here. The architect of the Australian legislation, Competition Commissioner Rod Sims, appeared before the Heritage Committee to reassure small news outlets that their counterparts did very well in Australia. Nevertheless expect this to be a focus of future hearings. As well, the “two employed journalists” threshold that small rural papers must pass over to access fair compensation under C-18 is already a point of contention within the Committee.

Sections 18-22 sketch out the process for formal bargaining between DNIs and news organizations (dubbed Eligible News Organizations – ENOs). Sections 27-31 cover how news organizations get certified as ENOs and thereby access bargaining with DNIs over fair compensation. Section 49 refers to a bargaining Code of Conduct that the CRTC is charged to develop to make bargaining go more smoothly.

• Section 27(1) sets the bar for the kind of news journalism required before a news outlet can be certified as an ENO. There appears to be a loophole where daily newspapers already certified under the federal government’s “QCJO” aid to journalism funding program are required to provide original news, but smaller publishers and any broadcasters are not. Geist is all over this and, forgiving his hyperbole, I agree.

Sections 33-41 describe the final offer binding arbitration that is available for ENOs if they can’t get a fair deal from Facebook or Google. It’s sometimes called “baseball style” arbitration where the arbitrator can only pick one of the two proposals in their entirety, without compromise.

There are a number of technical provisions in the Act dealing with how the bargaining regime intersects with the Copyright Act (sections 23-32) and the Competition Act (Sections 47-48).

• There are conflicting academic views on the copyright and trade compliance features of this Bill. Compare Geist to the University of Calgary’s Hugh Stephens on this.

There is an important “undue preference” provision in section 51 that limits Google and Facebook’s discretion in ranking news content (it can’t be unjust, undue or unreasonable).

There are several sections on how news organizations and the CRTC can compel information from Google and Facebook so that the bargaining and CRTC proceedings aren’t frustrated by the asymmetrical information gap about the inner workings of their platforms.

Because of this information problem, as well as the public’s and news organizations’ interest in transparency, section 86 speaks to an annual audit and information report about the commercial value of the agreements that are struck under the Act.

• David Skok, CEO of The Logic, says small news organizations need “real time” access to information on other bargaining outcomes in order not to be shortchanged.