Google takes the C-18 heat at Heritage Committee

October 18, 2022

Google’s marquee appearance at the Heritage Committee’s study of the Online News Act Bill C-18 was not the political theatre that might have been expected given Google’s aggressive public campaign against the pay-for-news-content legislation. 

Google spokesperson Colin McKay wisely projected corporate humility and avoided the pugnacious stance taken by his YouTube colleague Jeanette Patell last month during Senate hearings on Bill C-11.

McKay’s talking points took aim mostly at C-18’s “undue preference” rule that would allow news organizations to challenge the Google Search algorithm’s ranking of their content if the outcomes are “unjust, undue or unreasonable.”

While acknowledging that Google’s management of the Search algorithm should not be used as a bargaining tactic against news organizations, McKay told Heritage MPs they should fear bad actors (who would first have to obtain official status as legitimate news organizations) gaming the Bill’s undue preference rule in order to spread misinformation to Canadians. (I posted about that yesterday).

That comment elicited a rebuke from Bloc MP Martin Champoux who told McKay that his recently released Abacus public opinion poll on C-18, filed as an exhibit with the Committee, was full of misinformation on C-18. 

After three days of “question-as-debate” Committee proceedings, it’s still not clear if the Conservatives will follow through on their election platform to support the Bill, but it isn’t looking like it so far. 

Recently elevated by Opposition Leader Pierre Poilievre to the post of Heritage Critic, MP Rachael Thomas ran with the Google argument that the value of news distribution provided for free by FaceGoogle far outweighs whatever is lacking in compensation to media organizations. Google and Facebook, she said, have become the digital equivalent of a street corner newspaper box, provided free of charge to the publishers.

That set up Big Tech critic Ben Scott for the best video clip of the morning:

Apart from Google’s appearance, much of the Committee discussion focused on testimony from publishers of small weeklies. MP Kevin Waugh (CPC-SK) pressed Evan Jamison of the Alberta Weekly Newspapers Association to acknowledge that some of his publishers would benefit from C-18, but others would be competitively disadvantaged and excluded by the threshold requirement of employing two journalists in each publication. 

Instead of advocating for an amendment, Jamison supported the NewsMedia Canada position that Heritage Canada should support any scoped out weeklies through the Local Journalism Initiative and the Special Measures for Journalism program. 

At that point, Canadian Association of Broadcaster President Kevin Desjardins dragged the conversation in the direction of a solution: perhaps weeklies currently below the threshold could be allowed to participate in C-18 by submitting a business plan to CRTC demonstrating they could employ two journalists once they obtain C-18 funding. 

A further point that no one raised was that the two-journalist rule in C-18 does not specify “full-time,” only that they be “regularly” employed. This may provide the opportunity for existing freelancers and “stringers” to be put on payroll as part-time employees to qualify for C-18 funding. 

By the end of the two-hour session it appeared the majority of MPs are planning to move on to clause-by-clause debate shortly. 

***

Bill C-18 enjoys majority support and will eventually pass the Commons.

Nevertheless, opponents of the Bill as drafted continue to speak out against both the general wisdom of the legislation and its details. Last week McGill University visiting scholar Sue Gardner published what Michael Geist described on Twitter as a “take-down” of C-18.

Gardner is a visiting scholar at McGill’s Max Bell School of Public Policy where the internal debate over C-18 reportedly turned ugly earlier this year.

She makes some familiar arguments in principle against Bill C-18 but some of her criticisms, if valid and addressed, could lead to amendments. 

Before I get to that, here’s a general observation about the legislation: it has a dual personality.

C-18 is primarily an anti-competition remedy, intended to mitigate FaceGoogle’s overbearing market power in its commercial exchange with news organizations over the distribution of news content.  

It’s well known the Canadian Bill is rooted in the Australian Competition Commission’s findings that FaceGoogle’s “market power” in news distribution guarantees it greater monetized value from news content than it is paying for, even after deducting the value of free distribution it provides to news organizations. 

Also, while FaceGoogle’s other oligopoly on digital advertising is not at stake in C-18, there is no denying that it’s linked to the Bill both in terms of the political will to legislate but also the desperation of cash-strapped news organizations to take any deal they can get from the platforms.

Yet in spite of its origins as an anti-competition remedy, the Bill is widely viewed as public policy to save news journalism, supplementing direct government subsidies including the CBC parliamentary grant, the QCJO program for daily newspapers, Canadian Heritage programs for weeklies and magazines, and the CRTC-mandated cross-subsidies for local TV news.

Public policy designed to save news journalism immediately mobilizes concerns around the transparency of Big Tech funding news outlets, news as a public good, and the access of small news organizations to funding. 

The latter point segues to Gardner’s claim that C-18 is bad because its prototype in Australia allowed 90% of the FaceGoogle money to end up in the hands of mainstream media. 

Gardner cites no authority for the “90%” figure but it can be traced back to an article in The Crikey published in February 2021 where it’s clear the figure is a guesstimate.

The precise number isn’t important: presumably Gardner’s point is that larger news organizations should not be rewarded for being able to provide FaceGoogle with a larger volume of news coverage than small news outlets are capable of. 

This is a talking point adopted by independent Canadian publishers although they have yet to propose a metric of compensation for journalism, for example the number of stories published per dollar of journalist salary.

Whatever the answer to that question, Gardner joins the ranks of many other advocates for distributing FaceGoogle money in a manner more closely aligned to good public policy (journalism as intrinsically valuable, not just popular) than the market solution the Bill offers by rebalancing the commercial bargaining power between the market powerful and the market powerless. 

This tension in Bill C-18 between rebalanced bargaining for compensation on one hand, and “equal outcomes” on the other, is left unresolved in the Act for voluntary agreements that are vetted by the CRTC under section 11(1)(a): both factors are included in an unranked list of public policy considerations.

On the other hand, the arbitration criteria in section 38 of the Act for involuntary agreements appears to be a number-crunching exercise in the commercial “value” and “benefits” of news content and its distribution. It’s hard to find policy objectives of “the right kind” of journalism or equal treatment of all news organizations in the language of section 38.  

Gardner also criticizes C-18 for requiring news organizations to produce “general interest news” instead of “specialized news” which she argues has been scoped out in section 31(2).  She argues that by privileging general interest news the Bill incentivizes click bait and bad journalism.

In these early days it’s difficult to prove or disprove such an ambitious claim (which is also central to Google’s arguments against C-18).

However it’s not clear “specialized news” is scoped out. The legal text excludes news outlets whose content “is… focused on a particular topic such as industry-specific news, sports, recreation, arts, lifestyle or entertainment.” (Emphasis added)

There’s a great deal of beat or “specialized” news coverage —for example environmental reporting or business coverage—that would likely elude “industry-specific” and remain in scope.

One final point from Gardner: the Bill’s lack of transparency over compensation outcomes is intolerable to public policy and threatens to undermine any fair bargaining process if small news outlets are kept in the dark about the voluntary deals that large outlets obtain from FaceGoogle . 

On that, Gardner has plenty of allies pitching amendments at the Heritage Committee.