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July 9, 2025
Two news items about AI technology just grabbed headlines.
The first was the revelation by the UK news outlet Mail Online that its traffic referral from Google’s search engine is nosediving thanks to Google’s “AI Overview.”
The Overview AI tool is a huge upgrade on Google’s old practice of providing a top ranked text reply to search queries, usually mined from Wikipedia. Overview threatens to divert any but the most hardened skeptics from a page full of search results to a single high quality synopsis, sporting just two or three priority links.
The decline of web traffic is a calamity for news and information websites that count heavily on advertising revenue from referred traffic. No one is saying this out loud, but it might drive more unpaywalled news websites to a subscription model. That has implications for media policy that supports the vast array of unpaywalled media serving the largest audience cohort: casual news consumers.
But paywalled or not, as the publisher of the conservative opinion website The Hub groused it’s the “centre-left” mainstream media that’s likely to dominate the few hyperlinks offered by Overview. And that’s if Overview actually keeps displaying the links, Google’s AI competitors might not even bother.
Overview has the potential to accelerate the shift of ad revenue from news creators to platforms like Google. Not only does Google already monopolize Search and exercise illegal market power in digital advertising, but like all AI companies it is harvesting news journalism without licensing the content.
Another story that surfaced last week was an apparent AI song “recorded” by a fictional band hitting it big on Spotify.
AI-music is the latest, and most profound, evolution of Muzak and its heir, the day-long passive music algorithm. This is a big challenge to music as an art and as a business. As such, it will have a major impact on how Canadian music is created, monetized and heard.
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As a follow up to the most boring post I ever wrote, I can report that the CRTC’s public hearings on the distribution of Canadian content wrapped up on Monday with a closing appearance from the Canadian Association of Broadcasters.
CRTC Vice-Chair Adam Scott is on the panel. Because of, or in spite of, the fact that his background is telecommunications rather than broadcasting he often puts his finger on the crucial questions.
Scott asked the CAB spokespersons what they thought of the regulatory scheme proposed by Friends of Canadian Media for foreign online distributors.
The algebra of the Friends’ proposal is to establish an overall contribution to Canadian content roughly equivalent to that already made by Canadian cable companies; say, an expenditure tethered to 30% of Canadian operating revenue.
From that 30%, says Friends, online distributors could deduct their 5% cash contribution to Canadian media funds as well as the non-cash value of their marketing and prominence of Canadian shows on home screens and recommendation tabs. The flexibility of the “deduction” approach opens the door to bespoke contributions by different online businesses.
CAB President Kevin Desjardins colourfully described the Friends proposal as more like a piece of cheese offered to the streamers than a mousetrap, meaning the CAB would still like to see some general commitments to Canadian content that all online distributors would have to meet.
What was disappointing, Desjardins told Scott, was that the foreign streamers have avoided any formal commitments to Canadian content other than being left alone to carry on their business in Canada. He suggested that the Commission insist the streamers submit proposals in the post-hearing phase of the public consultation.
Another question raised by the Commission got my union-antennae twitching.
In 2022 the Liberal government decided to handcuff the CRTC on the available tools to regulate online distribution platforms in the instances where Amazon, Apple, Roku et al might be willing to carry Canadian programming but only on their one-sided terms for revenue splits or screen prominence.
Instead of conferring dispute resolution powers of arbitration on the CRTC, Bill C-11 restricted the Commission to adjudicating a standard of “good faith negotiations,” backed up by powers to fine violators.
As any union rep (or small commercial party) knows, good faith doesn’t tip the scales of power imbalance.
Canadian labour law remains mired in the good faith swamp after decades of jurisprudence that tries to distinguish between hard bargaining and illegal “surface” bargaining, ie the powerful party going through the motions while quietly messaging “it’s my way or the highway.” In this legal fiction, the actual content of proposals is almost irrelevant. The stronger party can be as hard nosed as it likes.
The CAB referred the Commission to the American FCC’s definition of good faith bargaining. But it looks a lot like surface bargaining, to be honest.
In the labour world, Ontario passed a law in 1986 on the resolution of first contract negotiations following unionization, when corporate intransigence is at its worst. The main feature was binding arbitration, exactly what has been denied to the CRTC.
But the “good faith” standard was upgraded from the vexing “hard vs soft bargaining” distinction to a multi-factor test in which the Labour Board scrutinizes “the uncompromising nature of any bargaining position adopted without reasonable justification.”
If the CRTC pursued this kind of thinking about good faith, it would have an evidence-based opportunity to require an intelligible “justification” for playing hard ball and that it be reasonable.
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Perhaps there’s been enough said about Prime Minister Carney’s blink on the Digital Services Tax.
Nah.
Hugh Stephens posted his view, similar to what you read in MediaPolicy. In the course of his piece, he links to a 2020 background study published by the Library of Parliament shortly after Royal Assent to the 2019 Bill C-82, which was the enabling legislation for the DST.
The Library study takes the tax narrative from its origins in OECD discussions in 2013 to February 2020, a month after Joe Biden was inaugurated as US President.
It’s a useful read in a couple of ways.
First, the blow by blow history makes it clear that many of the urban legends around the DST are wrong. It was never a “data tax,” or an “audience tax,” or a “make Big Tech pay” tax.
It was a response to the problem of digital companies operating in Canada without “a permanent establishment” that makes the company’s product, like a factory or a mine. Without changes to the permanent establishment rule, foreign digital companies can freely offshore their Canadian revenues (or just pay tax on them in their home countries).
The other thing that the Library study does is follow the negotiation narrative among OECD countries and with the US.
A first-term Trump was opposed to the DSTs being legislated in Europe and threatened retaliation. Once Trump lost the election to Biden, the UK and France moved quickly.
Canada lagged for reasons best known to the Finance Minister and the PM. Perhaps they were waiting to see if President Biden could get Congress to ratify a new tax treaty that would curb the use of offshore tax havens and agree to a minimum global corporate tax rate.
We know the outcome. Nice guys finish last.
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This blog post is copyrighted by Howard Law, all rights reserved. 2025.
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