Bill C-18 – also known as the Online News Act – received royal assent on Thursday afternoon, meaning that large tech platforms will soon be forced to share more of their revenues with news outlets.
But the tech companies that the government seeks to regulate remain committed to plans to remove news content from their platforms in order to move outside of the Act’s purview.
The Online News Act is meant to give news outlets a more fair share of revenues generated by digital ads, the vast majority of which currently goes to major tech platforms like Google and Meta. The bill attempts to achieve this by setting out parameters for bargaining between outlets and platforms to determine fair compensation, including giving the CRTC the right to impose arbitration if a deal cannot be met.
In a statement, CRTC chair and CEO Vicky Eatrides said the regulator would “soon share its plan for implementing the new Act,” including opening a public consultation process as it sets up the bargaining framework.
The final version of the bill included a number of amendments suggested by the Senate, where the bill had been considered since February. Most notable in the amendments were penalties for any party that disclosed confidential information obtained through an arbitration process, as well as the provision that the bill come into effect six months after passing.
But Heritage Minister Pablo Rodriguez rejected two of the Senate’s proposed amendments related to the bargaining process between tech companies and news outlets.
One of the amendments sought to define the goals of bargaining between platforms and outlets as determining the “value that each party derives from the news content of an eligible news business being made available by a digital news intermediary and to determine the portion of that value that will be transferred to the eligible news business.” The other rejected change was a technical amendment directly tied to the first.
In comments before the House of Commons earlier this week, Rodriguez said attempting to attribute a “simple value” to news content would undermine the bill’s objective of establishing fair deals and putting parties on a level playing field. It would also set boundaries on what parties could negotiate on, limiting its scope. To support his position, Rodriguez quoted industry figures that appeared during committee hearings, who said that the amendment would limit the ability for news outlets to negotiate fair compensation and further contribute to the power imbalance that already exists with major platforms.
While much of the news industry has been supportive of the goals of the bill, there have been some issues and concerns with how it goes about achieving those goals. Many smaller outlets, in particular, have called for greater transparency in the bargaining process; larger outlets have a greater ability to negotiate deals with tech platforms outside the mechanisms of the bill, which would put them outside of its existing transparency requirements and give smaller outlets a disadvantage during their own negotiations. Other outlets have expressed concern about the consequences of Google and Meta following through on plans to block news from their platforms in Canada should the bill pass, namely losing the traffic the platforms provide.
Policy experts previously told MiC that attempting to directly regulate Google and Facebook’s broader ad networks – which have allowed it to take a large portion of revenue generated by ads appearing on a news outlet’s own website – would fall out of Canada’s purview, and would likely require a coordinated anti-trust effort between several jurisdictions.
As such, the Online News Act instead concerned itself with digital media “intermediaries” that made news content available to Canadians through their platforms, with negotiations meant to give outlets “fair compensation” for the value they add to those platforms. While this widens the scope of bargaining, this also means any platform that removes news from its website would no longer be subject to the terms of the Online News Act.
In a statement posted to News Media Canada’s website after the bill was passed, Paul Deegan, CEO of the organization, asked parliamentarians to now turn their attention to other issues impacting the news industry, namely updating the Competition Act to ensure the Competition Bureau can “act upon abuses and anti‑competitive business practices” when it comes to online search and advertising in Canada.
Media companies and organizations celebrate a “positive first step”
News Media Canada, in its statement, welcomed what it called “an important first step to level the playing field and address the significant market power imbalance between publishers and platforms.”
In their own statements, other media industry organizations – such as the Canadian Association of Broadcasters and FRIENDS – and executives at major publishers – including Postmedia CEO Andrew MacLeod and Torstar’s VP of government and public relations Ryan Adam – echoed the belief that the bill was a positive “first step.” Adam added, however, that Torstar still had some lingering concerns, namely when it came which tech platforms would be compelled to pay for news content, specifics around the arbitration process and “the appetite for tech platforms to negotiate in good faith.”
Phillip Crawley, CEO of The Globe and Mail, expressed disappointment that issues the publisher raised during committee hearings were not implemented in the final bill. Chief among them was the degree of regulatory authority the CRTC would be given over the news industry and their negotiations in commercial deals, which creates a risk of the regulator “fishing for” confidential business information and government overreach threatening the newspaper’s editorial independence.
“We hear the minister telling us they won’t be using those powers,” Crawley says. “This government might say this is something they’d never do, but once something comes into law, you never know what another government might do down the road.”
Shannon Lewis, president of the Canadian Media Directors Council, said in an email that “it is crucial that we strike a balance that benefits both publishers and platforms, and that all stakeholders benefit with a fair and equitable value exchange. The ultimate purpose of this legislation is to invest in the newsroom and journalists, but smaller publishers may not receive sufficient investment to drive innovation and attract talent.” She said that the CMDC, through its Canadian Media Manifesto, would remain engaged with the bill’s implementation process.
Meta will block news from its platforms, Google looks to “avoid an outcome that no one wants”
In an updated blog post on its website, Meta said that it planned to follow through with its plans to end news availability on both Facebook and Instagram at some point prior to the Online News Act taking effect. More details will be shared with users closer to when the change comes into effect.
Google, on the other hand, did not close the door on a potential resolution with the government, but is prepared to follow through with its own plans. Company spokesperson Shay Purdy said in a statement to Media in Canada that the company is “doing everything we can to avoid an outcome that no one wants,” referring to the company’s plan to block news from its platform. Purdy said none of the company’s concerns have been addressed, but that it would continue to “urgently seek to work with the government on a path forward.”
