Catching Up on MediaPolicy.ca – Ottawa gives Big Tech what they asked for on C-18 – University returns secret Amazon gift

U of T Law Dean Jutta Brunée

September 2, 2023

Yesterday the federal government satisfied Google’s and Facebook’s number one demand on the Online News Act Bill C-18, limited liability.

The draft regulation establishes 4% of their Canadian revenues as the minimum compensation owed to Canadian news outlets to avoid binding arbitration. Government briefings pegged the total amounts as $172 million for Google and $62 million for Facebook.

The four per cent is a lump sum for Canadian journalism, divided among eligible news businesses. The regulation provides the Big Tech platforms with elbow room on how to distribute it through negotiated settlements with news outlets, either individually or in bargaining coalitions assembled by smaller media outlets.

Platforms are permitted to negotiate non-cash compensation to news outlets, such as technical support and training, although the CRTC will decide if substitutes for real money are authentic. Perhaps more critically, the regulation contemplates a 20% value range of compensation outcomes, meaning the Platforms can negotiate richer deals with some news outlets, thinner with others. That should spark some commentary from advocates for niche news outlets who fear getting the short end of the stick. 

The regulation also limits the number of independent news outlets that Google or Facebook can ignore to “any group of 10 independent news businesses operating local news outlets.”  An independent news business is defined as having five or fewer news outlets, for example a regional publisher with several community titles, so up to 50 community news websites could be left out.

Facebook flatly rejected the regulation and continues its Canadian news throttle. Google is quiet and keeping its powder dry. As the CRTC has already delayed the beginning of negotiations until early 2025, an election year, the platforms may choose to wait out the government.

Both platforms can still avoid the 4% payment and test the validity of their claims that they owe nothing and that news publishers and broadcasters are in fact the beneficiaries of the value exchange between platforms and journalism. The proposed regulation applies only to the “exemption” of Big Tech from submitting to binding arbitration where their claims can be put to the test.

Here’s the draft regulation.

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Two weeks ago, I drew your attention to a story in The Logic that the University of Toronto Law School had secretly accepted a $600,000 gift from Amazon to fund scholarship in competition law. 

The university is now returning the unspent balance to Amazon. Law Dean Jutta Brunée explained that her initial decision to keep it all secret was that she didn’t want competition scholars to be influenced by the donation from a major monopolist. The federal government is currently reviewing the Competition Act and considers public submissions from law professors and the general public.

Brunée issued a statement saying she was right to have kept the gift secret but now, the matter having been exposed by The Logic, she is giving the money back because of public perception:

The Faculty of Law upheld the University’s firm commitment to academic freedom, institutional autonomy and integrity. Nonetheless, we acknowledge the important questions raised about the lack of full transparency pertaining to the gift, and the perception of external influence on our academic activities. 

It would be interesting to have been a fly on the wall at the most recent meeting of the law faculty (the academics having been kept in the dark about the gift). I feel rather confident there was a rebellion. Prior to the Dean changing her mind, the U of T Faculty Association condemned the gift. UTFA’s principal objection was “most disturbingly, the [Logic] article reveals that Amazon’s donation was not disclosed to the academic community or to the public, and further, that speakers who participated in a seminar funded by the donation were chosen from a list prepared by Amazon.”

No doubt a parallel may be drawn between Amazon funding and trying to influence research on competition law and its Big Tech cousins funding news under Bill C-18. One difference between the two situations is the presence or absence of transparency and regulatory controls on how the money is distributed.

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Amber Dowling has a well-worth-reading piece in the Globe and Mail marking the gap between what Hollywood streamers said they were already doing for Canadian content and what they are in fact doing.

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