The Minister of Canadian Heritage has released its draft regulations for the Online News Act, providing more clarity on how much tech companies may be expected to contribute to Canadian outlets.
To be covered by the Online News Act, a “digital news intermediary” is a platform that makes news available to Canadians must have at least $1 billion in global revenue and 20 million average monthly users in Canada. Currently, the government is unsure if the regulations would apply to Instagram, as it is still seeking information as to whether it meets the 20 million user threshold. Outside of that, the next-closest platform to the threshold is Microsoft’s search engine Bing.
Intermediaries that fall under the Act’s purview will be required to negotiate with outlets to determine fair value for having news content on their platforms, which can be subject to meditation if an agreement is not met. Platforms can, however, seek an exemption from negotiation if they have a commercial agreement with an outlet.
To obtain an exemption, a platform’s total compensation to Canada’s news industry must exceed an amount determined by a formula. The number is established by multiplying a platform’s total global revenue by Canada’s share of global GDP – a proxy for the platform’s Canadian revenue – which is then multiplied by a 4% contribution rate.
Based on publicly available data, the government estimates these contributions would be roughly $172 million for Google and between $60 to $62 million for Facebook.
To receive an exemption, tech platforms must launch a 60-day open call to identify participating news outlets. Agreements can include the value of non-monetary contributions, such as traffic to news outlets and advertising-related services. The deals must also fall within 20% of average relative compensation, both to ensure deals are not too small, but also not too large, where they would allow tech companies to influence the marketplace.
Per the Act, agreements must also not allow corporate influence to interfere with journalistic independence, provide funding for the production of news and include outlets that serve local, Indigenous and minority language communities. The CRTC has been granted authority to determine whether agreements meet these conditions.
Previously established agreements with news outlets that meet this criteria will be considered.
Among the concerns Meta and Google have expressed with the Online News Act is the lack of clarity or certainty around how much they may be expected to contribute to news outlets. The draft regulations have not addressed Meta’s concerns with the Online News Act, which have led to it blocking news content for Canadian users.
“As we have communicated to the government, the regulatory process is not equipped to address the fundamentally flawed premise of the Online News Act,” said Rachel Curran, head of public policy for Meta Canada, in a statement. “As the legislation is based on the incorrect assertion that Meta benefits unfairly from the news content shared on our platforms, today’s proposed regulations will not impact our business decision to end news availability in Canada.”
Google has also said that it is planning to remove news from its platform in Canada, though has been engaging in discussions with the government to address its concerns with the Act.
A 30-day consultation period, during which stakeholders and the general public can offer feedback on the regulations, will begin on Saturday. The final regulations will be released some time after that, at which point the CRTC will be bound by their terms.
The CRTC will have authority to set details of the bargaining process, a code of conduct to support fairness and transparency, rules on undue preference and the eligibility of news businesses through its own separate regulatory process. It released its own timeline for that process last week.
