October 26, 2022
As of today’s date we don’t know if the House of Commons Heritage Committee will keep hearing witnesses on the Online News Act Bill C-18 —-the “FaceGoogle-must-pay” legislation— or when they will move on to debate amendments. (Update: the Committee has announced it will hold three more days of witness hearings followed by clause by clause debate beginning November 18th).
Regardless, the serendipitous timing of Facebook’s threat to blackout Canadian news and the release of Google’s gerrymandered opinion poll on the legislation suggest that sidebar discussions with Heritage Minister Pablo Rodriguez on changes to C-18 ended in stalemate.
The federal government appears unmoved. The Bloc and NDP are onside with the Liberals so far.
It’s melodramatic to summarize FaceGoogle’s messaging as “it’s war.” But it sure isn’t peace.
At some point journalists may uncover the backstory on how it came to this. It’s a bad day for public policy given that the Liberals and Erin O’Toole’s Conservatives both promised in the 2021 election to pass legislation rebalancing the bargaining power between FaceGoogle and news organizations over news content.
To be fair, the Tories didn’t pre-approve C-18 but endorsed the “best practices” of French and Australian legislation. More on that below.
The backstory is probably this: Facebook and Google think they overpaid in Australia with $190M to broadcasters and publishers. They see C-18 as greasing the skids to a similar and a far more expensive deal in the United States. The American version of C-18 has bipartisan support in the Senate and debate ought to resume after the November 8th midterms are over.
Unlike the Australian scenario where a right-wing government stared down threats from both Facebook and Google, the web giants believe they have allies in the Conservative Party of Canada.
Google is irked by two points in C-18, which I will get to in a moment. Facebook’s messaging recycles its long standing talking points that failed to persuade in Australia, chiefly that it owes nothing to news organizations.
We may never know the parry and thrust of the lobby meetings Facebook and Google had with the Minister since C-18 was tabled April 5th. But it appears the government did not give an inch. That could be because there is no deal the Liberals could make with FaceGoogle that would stick with Pierre Poilievre: blowing up Bill C-18 (and Bill C-11) is too important to the Conservatives’ branding and fundraising.
Google has its list of criticisms of C-18. The two biggest are the so-called “link tax” and the “undue preference” provisions.
“Link tax” is the pejorative description of money changing hands between Google and the owners of intellectual property on the web, the property being “made available” by a hyperlink on Google Search accompanied by a headline or a snippet of text. In other words, the speculation over money changing hands is not a “tax” or fee paid to government.
Internet activist Michael Geist claims the “made available” legislative text supporting the so called link tax is an unwarranted Canadian embellishment on the Australian legislation and is “an approach not found anywhere else in the world.” Any compensation for intellectual property, he says, should be restricted to the display of full text articles on Search. In other words, never.
Geist is wrong about the Australian legislation. “Availability,” “link” and “index” are explicit in both its Newsmedia Bargaining Code and Canada’s Bill C-18. Here’s the Australian text followed by C-18:
52A Definitions
core news content means content that reports, investigates or explains:
(a) issues or events that are relevant in engaging Australians in public debate and in informing democratic decision‑making; or
(b) current issues or events of public significance for Australians at a local, regional or national level.
covered news content meanscontent that is any of the following:
(a) core news content;
(b) content that reports, investigates or explains current issues or events of interest to Australians.
52B Making content available
(1) For the purposes of this Part, a service makes content available if:
(a) the content is reproduced on the service, or is otherwise placed on the service; or
(b) a link to the content is provided on the service; or
(c) an extract of the content is provided on the service.
(2) Subsection (1) does not limit, for the purposes of this Part, the ways in which a service makes content available.
52C Interacting with content
(1) For the purposes of this Part, a user of a service interacts with content made available by the service if:
(a) the content is reproduced on the service, or is otherwise placed on the service, and the user interacts with the content; or
(b) a link to the content is provided on the service and the user interacts with the link; or
(c) an extract of the content is provided on the service and the user interacts with the extract.
(2) Subsection (1) does not limit, for the purposes of this Part, the ways in which a user of a service interacts with content made available by a service.
And here are the brief but parallel provisions in C-18:
Making available of news content
(2) For the purposes of this Act, news content is made available if
(a) the news content, or any portion of it, is reproduced; or
(b)access to the news content, or any portion of it, is facilitated by any means, including an index, aggregation or ranking of news content.
More to the point, Google settled voluntarily with Australian news organizations for upwards of $100M. If that wasn’t for hyperlinks on Google Search, what was it for?
Google’s link tax obfuscation is understandable: it wants to pay less, or not at all.
On the other hand, Geist’s messaging about a link tax is advocacy for free-flowing information on the world wide web, a vision that requires a narrow interpretation of copyright and an expansive interpretation of “fair use” i.e. free access to the intellectual property of others.
In the same vein, Neiman Lab’s Joshua Benton asked rhetorically in a recent column opposing C-18, why should news organizations get special access to payment for Google links?
The short answer is: for the public good of sustainable news journalism, currently in crisis.
That’s good enough for most of us and all federal political parties, given that FaceGoogle has acquired enormous market power in digital advertising, audience data, search and social media, thereby leaving news organizations no choice but to accept the price (if any) put on their content by Big Tech for distribution on their must-have platforms.
As the Australian Competition Bureau stated, simply unlinking their online journalism and walking away from the planet’s go-to search and social media platforms is a non-starter for any sustainable news business.
Aside from links, Google’s real priority is defeating the “undue preference” provisions of C-18 which contemplate news organizations (once certified as legitimate) filing complaints to the CRTC alleging the ranking of their news by Google’s algorithm is “unjust, undue, or unreasonable.”
Credit to Google, it rightfully concedes a role for Bill C-18 in banning retaliation by platforms against news businesses for exercising their bargaining rights under the legislation. The Australian legislation did just that and consequently is drafted far more tightly (see the end of this post for the full text).
As a matter of good public policy, C-18’s more expansive version of undue preference is defensible as supervision of privately curated distribution platforms, although free speech absolutists will disagree. But they are not critical to a Bill concerned about fair bargaining and are more suited to inclusion in the government’s forthcoming Online Safety Act.
Other criticisms of C-18 are in the realm of political gamesmanship. Geist’s post reporting that TV news organizations might be in line for as much as $250M in compensation from FaceGoogle seemed designed to provoke a populist outcry against the much-maligned CBC and pantomime villains Bell Media and Rogers City-TV. He also tweeted that Bell Media CTV’s firing of Lisa LaFlamme was relevant to the policy discussion:
It’s clever news cycle politics. But Geist (and Conservative MP Kevin Waugh who proclaimed that TV companies are “at the trough”) now need to state publicly which television news outlets they wish to disqualify from legislation designed to compensate for the abuse of market power by American Big Tech.
It was after all the Conservative election platform that promised legislation where “a government won’t be able to pick and choose who has access to the royalty framework.”
It’s a notable point that US Republicans only co-sponsored their version of C-18 after excluding the liberal-leaning New York Times and Washington Post from its scope.
It’s no wonder that Google and Facebook need Canadians to make this argument for them.
***
As for the peace proposal, here are MediaPolicy.ca’s recommended and non-recommended amendments:
The CRTC:
This agency does not currently possess the journalism chops, time or staff resources to carry out a frictionless implementation of C-18. A special tribunal would have been better. But there is no changing course now and the CRTC will have to do.
The Minister has announced the extra financial resources for implementation. Let’s hope the government also takes the deficit of journalism experience into consideration when making appointments to the Commission.
News Content:
Eligible news organizations must produce news content.
The definition of news content in section 2(1) contemplates “reporting, investigating or explaining”—emphasizing news over opinion— but imposes no quantitative requirement for fact-driven news reporting.
The Australian legislation gives its regulator that authority and C-18 should do so as well:
(1) The requirement in this subsection is met in relation to a news business if the primary purpose of each news source covered by subsection (2) is to create content that is core news content.
(2) This subsection covers a news source if it comprises, whether by itself or together with other news sources, the news business.
(3) For the purposes of subsection (1), in determining whether the primary purpose of a news source is to create content that is core news content, take into account the following matters:
(a) the amount of core news content created by the news source;
(b) the frequency with which the news source creates core news content;
(c) the degree of prominence given to core news content created by the news source, compared with the degree of prominence given to other content created by the news source;
(d) any other relevant matter.
Eligible News Organizations and Professional Standards:
The Bill does not require that eligible news organizations demonstrate their legitimacy and public accountability by belonging to any of Canada’s self-governing media press councils.
It’s not clear why C-18 is missing this important safeguard. In Committee, Bloc MP Martin Champoux unsuccessfully pressed Heritage Minister Pablo Rodriguez on this point.
Here’s the Australian text:
52P Professional standards test
(1) The requirement in this subsection is met in relation to a news business if:
(a) every news source covered by subsection (2):
(i) is subject to the rules of the Australian Press Council Standards of Practice or the Independent Media Council Code of Conduct; or
(ii) is subject to the rules of the Commercial Television Industry Code of Practice, the Commercial Radio Code of Practice or the Subscription Broadcast Television Codes of Practice; or
(iii) is subject to the rules of a code of practice mentioned in paragraph 8(1)(e) of the Australian Broadcasting Corporation Act 1983 or paragraph 10(1)(j) of the Special Broadcasting Service Act 1991; or
(iv) is subject to internal editorial standards that are analogous to the rules mentioned in subparagraph (i), (ii) or (iii) to the extent that they relate to the provision of quality journalism; or
(v) is subject to rules specified in the regulations that replace those mentioned in subparagraph (i), (ii) or (iii); or
(vi) is subject to other rules specified in the regulations; and
(b) every news source covered by subsection (2) has editorial independence from the subjects of its news coverage.
Platform Exemption Criteria and no news organization left behind:
There are two ways for deals to be made between FaceGoogle and news organizations. One is through arbitration. The other is through a comprehensive series of voluntary agreements with news organizations, regardless of whether they have sought certification as Eligible News Organizations (ENOs).
There is wiggle room in C-18, as there was in Australia, for the platforms to exclude a handful of news organizations that might otherwise qualify as ENOs so long as the CRTC deems the voluntary agreements as being good enough and covering enough news organizations.
This was how Facebook got away with excluding two important news outlets in Australia: the investigative website The Conversation and the television outlet Special Broadcasting Service (similar to Canada’s OMNI-TV)
This wiggle room in C-18 ought to be removed by explicitly providing that, under the exemption criteria listed in section 11, deals must be made with all news organizations that demonstrate they can qualify under the Act as eligible news organizations.
Transparency of Bargaining Information:
Once bargaining begins under the Bill, the two platforms Facebook and Google will of course know all of the details of their own deals with individual news organizations, or different groups of them. But news organizations won’t know each other’s outcomes and will be in the dark about what a fair settlement looks like.
This is grossly disadvantageous to news organizations, especially the smaller ones with less resources, in a Bill designed to rebalance bargaining power. This kind of information vacuum does not exist in comparable bargaining forums, for example labour negotiations.
The Independent Online News Publishers have tabled the following amendment:
44.1 An eligible news business shall file a covered agreement with the Commission within 30 days of the conclusion of the agreement or from the date of an arbitration panel decision made under section 41 and the Commission shall make the agreement public in a database of covered agreements.
A similar clause was tabled by Friends.
If MPs want to support smaller news organizations, this amendment is the best way to do it.
Small Publishers and the Two Journalist Rule:
The publishers of small rural weeklies have become the poster children for the news outlets potentially left behind by C-18.
The problem is the threshold requirement that an ENO must keep on staff at least two “regularly employed” journalists (and freelancers don’t count). The requirement stems from Income Tax regulations supporting the federal QCJO aid program for news journalism where it’s explicit that the two journalists can be part-time employees.
The “part-time” interpretation of “regularly employed” likely solves the problem and it should be acknowledged that the drafters of C-18 are trying to prevent self-employed freelancers claiming status under the Act.
An amendment is not strictly necessary given that Heritage Canada has financial aid programs available for small weeklies without the two-journalist requirement.
Also, publishers can always convert freelancers to part-time employees. Under C-18 they will have the financial means to do so.
Undue Preference:
The Bill’s fulsome “undue preference” provisions holding FaceGoogle to account for their algorithm rankings of news seemed aggressive until Facebook’s threat last week to de-platform Canadian news as a political tactic: talk about self-preferencing curation!
But in the spirit of turning the other cheek, perhaps an amendment to section 51 would be the government’s peace offering to Big Tech and the Conservatives if they are willing to accept it.
The undue preference provisions can be pared down to the protection of news organizations from algorithm manipulation by the platforms that is retaliatory or undermines a news organization’s bargaining rights. A similar concept exists in labour codes regulating collective bargaining between employers and unions.
The verbose Australian text is here:
Division 5—Non‑differentiation
(1) This section applies if a responsible digital platform corporation for a designated digital platform service, either by itself or together with other corporations, operates or controls a digital service (whether or not the designated digital platform service).
(2) The responsible digital platform corporation must ensure that the supply of the digital service does not, in relation to crawling, indexing, making available and distributing news businesses’ covered news content:
(a) differentiate between registered news businesses, because of any of the following matters:
(ia) a corporation being registered under section 52G, or being endorsed under that section as the registered news business corporation for a news business;
(i) a bargaining news business representative for a registered news business making a notification under 52ZE(1), or not making such a notification;
(ii) a bargaining news business representative for a registered news business giving a notice under 52ZL(2), or not giving such a notice;
(iii) a registered news business being paid, or not being paid, an amount of remuneration for the making available of the registered news business’ covered news content by a designated digital platform service (whether or not the remuneration is paid in accordance with a determination of a panel under section 52ZX));
(iv) a registered news business being the subject of, or not being the subject of, an agreement of a kind described in section 52ZZK or 52ZZL;
(v) a registered news business being the subject of, or not being the subject of, an agreement resulting from the acceptance of an offer of a kind described in section 52ZZM; or
(b) differentiate between registered news businesses and news businesses that are not registered news businesses, because of any of the following matters:
(i) a matter mentioned in subparagraph (a)(ia), (i), (ii), (iii), (iv) or (v);
(ii) a news business covered by subsection (3) being paid, or not being paid, an amount of remuneration for the making available of the news business’ covered news content by a designated digital platform service;
(iii) a news business covered by subsection (3) being the subject of, or not being the subject of, an agreement of a kind described in section 52ZZK or 52ZZL;
(iv) a news business covered by subsection (3) being the subject of, or not being the subject of, an agreement resulting from the acceptance of an offer of a kind described in section 52ZZM; or
(c) differentiate between news businesses that are not registered news businesses, because of any of the following matters:
(i) a corporation being eligible to be registered under section 52G, or being eligible to be endorsed under that section as the registered news business corporation for a news business;
(ii) a corporation applying under section 52F for registration of itself, or of a news business, or for endorsement of itself as the registered news business corporation for a news business.
(3) This subsection covers a news business if:
(a) the news business is not a registered news businesses; and
(b) none of the news sources that comprise the business form part of a registered news business.
(4) Subsection (2) does not apply in relation to differentiation if:
(a) there is an agreement between:
(i) the responsible digital platform corporation, or a related body corporate of the responsible digital platform corporation; and
(ii) a corporation that is registered (or is eligible to be registered) under section 52G and, either by itself or together with other corporations, operates or controls a news business; and
(b) the agreement provides that a corporation mentioned in subparagraph (a)(i) will ensure that remuneration is to be paid to the news business for the making available of the news business’ covered news content by the digital service; and
(c) the differentiation arises solely from the amount of that remuneration.
(5) Subsection (2) does not apply in relation to differentiation if:
(a) there is an agreement between:
(i) the responsible digital platform corporation, or a related body corporate of the responsible digital platform corporation; and
(ii) a corporation that is registered (or is eligible to be registered) under section 52G and, either by itself or together with other corporations, operates or controls a news business; and
(b) the agreement provides that:
(i) a corporation mentioned in subparagraph (a)(ii) will ensure the provision of a specified type of coverednews content to be made available by the digital service; and
(ii) a corporation mentioned in subparagraph (a)(i) will ensure that the content is ranked preferentially when the digital service distributes the covered news content; and
(c) the differentiation arises solely from that preferential ranking.
(6) For the purposes of this section:
(a) treat the reference in the definition of news source in section 52A to “it produces” as instead being a reference to “it regularly produces”; and
(b) treat the reference in that definition to “news content” as instead being a reference to “covered news content”.
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