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May 5, 2022updated 30 Sep 2022 11:17am

Duopoly battle moves to Canada as Google and Meta face new Australia-style regulation

By William Turvill

Canada’s news publishers are braced for an aggressive response to their government’s plan to make Google and Meta pay for news content.

Justin Trudeau’s government laid out the details of its Online News Act last month. Canada now looks set to become the second country (after Australia) to introduce legislation that effectively forces the Duopoly to pay publishers for their content.

Ahead of the introduction of Australia’s News Media Bargaining Code, Google threatened to withdraw services from the country, while Meta (then known as Facebook) briefly blocked news content from its social media sites.

With several other countries around the world – including the UK and US – looking at similar legislation, Google and Meta’s response to Canada’s proposed Online News Act will be closely observed by the global news industry.

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What is Canada’s Online News Act?

The Online News Act, formally known as Bill C-18, will require “digital news intermediaries” to negotiate with news publishers for the use of their content.

Like Australia’s News Media Bargaining Code, therefore, it effectively forces Google and Meta to negotiate content-licensing deals with news companies. It also permits publishers to collectively negotiate with the platforms.

The Canadian Radio-television and Telecommunications Commission (CRTC) will be in charge of deciding which tech platforms are subject to the act. Some in the news industry are hopeful that other tech giants could be subject to the rules.

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As under the Australian rules, if a designated tech platform cannot agree a deal with a publisher, it is threatened with the prospect of baseball-style arbitration.

In Australia, the News Media Bargaining Code is believed to have resulted in publisher content deals worth more than AU$200m a year.

Meta response Canada Online News Act

Rachel Curran, Meta’s public policy manager for Canada, has said her company has “some pretty serious concerns” about the Online News Act.

Speaking before the House of Commons’ public safety committee in Ottawa last week, she did not rule out the possibility of Meta blocking news in Canada as a result of the act.

“I can’t comment definitively on our future action with respect to that bill especially since we’re still evaluating it,” she said in response to questioning by Conservative MP Raquel Dancho.

“I think I would say that we’re still looking at all of the options based on our evaluation of the legislation,” she added. “We were not consulted on the content of it, and so we need to review it in pretty close detail before we decide what our future response will be.”

Curran’s refusal to rule out a news ban in Canada sparked a forthright response from the nation’s heritage minister, Pablo Rodriguez, who oversees media issues.

“They made the same threat in Australia and at the end of the day they stayed,” he told reporters, according to The Canadian Press. “It wasn’t well received by the Australian people and I don’t think it would be well received by the Canadian people.”

Rodriguez denied Curran’s claim that Meta had not been consulted on the contents of the Online News Act. “They lied,” he told reporters, according to The Canadian Press. “Facebook yesterday in committee said they had not been consulted, which is not true.”

When contacted by Press Gazette for this story, a Meta spokesperson shared a statement from Curran that was first issued in April when the Online News Act was announced. “We are currently reviewing the proposed legislation in detail and look forward to engaging with stakeholders once we more fully understand what the bill entails.” 

Google versus Canada: This is ‘the kind of regulation that breaks the internet’

Richard Gingras, vice president of news at Google, has described the Online News Act as “troubling” and “unfortunate”.

Speaking at a conference hosted by the Sociedad Interamericana de Prensa (Inter-American Press Association) on 20 April, he also hit out at large publishers and industry associations that have been pushing for such legislation.

“I’ve engaged as best I can with publishers in Canada, with the Canadian government,” said Gingras. “We’re continuing to analyse the legislation in Canada. There are troubling aspects to it. It does include a link tax, which is unfortunate.”

Acknowledging that both Canada and Brazil have recently tabled similar legislative proposals, Gingras said: “What troubles me is I feel we’re going down a road that is in neither of our self-interests with the kind of regulation we’re seeing. The kind of regulation that breaks the internet. The kind of regulation that brings government into the news industry when over the years – especially in South America, in Latin America – that’s the last thing you ever wanted to see.”

He said that “asking a search engine to pay for links is self-defeating” and claimed it would “reduce the ability of citizens to find diverse sources of journalism”.

“Do large publishers recognise the impact on new and diverse voices, or is that the objective those large publishers are looking to achieve?”

He later added: “It makes me sad to hear an association or industry lobbyist make false claims while purporting to defend journalism.” It was not clear what claims Gingras was referring to.

Asked about Canada’s Online News Act, Google spokesperson Jenn Crider said: “We are carefully reviewing the legislation to understand its implications. We fully support ensuring Canadians have access to authoritative news and we look forward to working with the government to strengthen the news industry in Canada.”

Canada’s news industry: ‘It’s spin to suggest this is a link tax’

Paul Deegan, the chief executive of News Media Canada, an industry body that represents publishers across the country, challenges Gringas’ framing of the Online News Act.

“It’s spin to suggest that C-18 is a link tax,” he told Press Gazette. “This vital legislation simply allows Canadian publishers to negotiate collectively with platforms backed up by the teeth of baseball-style arbitration.

“With the prospect of the Trudeau government taking action, both Google and Meta negotiated content licensing agreements with several Canadian publishers. This legislation will allow more publishers to receive fair market compensation for their content, so they can reinvest in quality journalism.”

He was also critical of Meta’s refusal to rule out a news ban in Canada. “Pulling or threatening to pull services didn’t work in Australia and it certainly won’t work in Canada. This is very good legislation that improves on the Australian model and balances the needs of all stakeholders.”

The terms of the Online News Act have drawn criticism in Canada from academics like Dwayne Winseck and Michael Geist, as well as Jesse Brown, the publisher and editor-in-chief of Canadaland, a growing multimedia news startup.

Brown takes issue with the financial support that has been offered to the Canadian news industry through government tax credits and is now wary of the Online News Act, which he believes would “lock-in legacy news [organisations] at the expense of startups. It also locks in the power of Google [and Meta], putting a critical part of our democracy on their permanent payroll.”

On 11 April, he tweeted: “Taken as a whole, the level of market interference has expanded and expanded to the point where small independent news [organisations] face an existential crisis. This may mean: join or die. That includes Canadaland.”

David Skok, the founder, CEO and editor-in-chief of another news startup, The Logic, has come out in support of the Online News Act. He says that he is wary of government intervention in this area, but describes the act as a “necessary evil” because Google and Meta are already striking cash-for-content deals with some Canadian publishers, creating a market imbalance.

“We are currently being left out and shut out of all of these conversations,” Skok told Press Gazette. “And as a result of that it’s distorting the marketplace.”

In a recent letter to readers of The Logic, Skok also challenged several arguments that have been made against the legislation. His conclusion: “Big Tech companies have already struck deals with Canadian publishers. These deals are already distorting the ecosystem. Bill C-18 seeks to rectify that imbalance.”

What happens now?

Canada’s news media is pushing for the legislation to be introduced next month, before their parliament breaks for the summer. Two industry sources acknowledged privately that the process is unlikely to complete before the autumn.

The bill’s first reading was made in the House of Commons on 5 April. After its second reading in the Commons, it will be considered by a parliamentary committee. This is a stage at which Google, Meta and other parties may suggest amendments to the bill.

News companies may challenge sections of the legislation. For example, one industry source said they were uncomfortable with part of the law that could be used by the CRTC to compel news companies to provide unspecified information required “for the purpose of exercising its powers or performing its duties and functions under this act”. The potential inclusion of Canada’s public broadcaster, CBC, could also be challenged.

Public comments from the tech giants suggest they will take issue with the Online News Act in its current form. If they follow the same pattern as in Australia, Google and Meta will soon begin making threats about withdrawing services from Canada.

Deegan of the NMC, which has long campaigned for legislation of this kind, is confident Ottawa will not be swayed and that, ultimately, other countries will follow Canada’s example. “Publishers throughout the Americas see Canada as a forward-looking democracy and they are excited by this legislation that builds on the Australian model.”

Photo credit: Reuters/Dado Ruvic

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