UPDATED: Gov. launches Online News Act, will mandate bargaining between outlets and web giants for compensation

New legislation from the Government of Canada will mandate negotiations between news organizations and global web giants like Facebook Inc. and Alphabet Inc.'s Google, in order to establish commercial deals for the sharing of news content, to be backstopped by final offer arbitration from the CRTC. News organizations will be able to bargain collectively under the act. Under the Online News Act, Bill C-18, introduced Tuesday in the House of Commons, news organizations will have to qualify for designation. According to briefing materials provided by the Department of Canadian Heritage, the news outlets that qualify for designation will be assessed on four different criteria by the CRTC: entities that regularly employ two or more journalists in Canada; operate in Canada; are engaged in the production of news content; and are not significantly engaged in producing content that promotes its interests or reports on the activities of an organization. Those organizations which are already designated as a Qualified Canadian journalism organization (QCJO) under the Income Tax Act are automatically qualified to engage in collective bargaining under the Online News Act. Digital platforms can avoid the mandated bargaining, however, if they manage to strike deals ahead of time with news organizations. Those deals will be assessed by the CRTC along the following six criteria: Provide fair compensation to the news business for the news content that is made available by the digital news intermediary; Ensure an appropriate portion of the compensation be used to support the production of local, regional and national news content; Do not allow corporate influence to undermine the freedom of expression and journalistic independence enjoyed by news outlets; Contribute to the sustainability of the Canadian news ecosystem; Contribute to the sustainability of independent local news businesses; and Involve a range of news businesses reflecting Canada’s diversity of languages, racialized groups, Indigenous communities, and local news and business models. It remains unclear how the initiatives launched in recent years by both Google and Facebook will affect negotiations between those platforms and news organizations, and whether or not those deals will qualify those platforms for an exemption from negotiating with those outlets involved in existing deals. "The bill does specifically provide that those agreements can be taken into account in the context of a platform applying for an exemption from the regulator," a government official told reporters on a technical briefing call. "It will be up to the platforms and the news businesses to determine whether they need to reopen and renegotiate some of those existing agreements in light of the six factors outlined in the bill," the official said. "If a platform wishes to benefit from an exemption at a global level, those voluntary agreements that they've reached have to respond to those six factors." The new legislation, the official added, will add an extra layer of scrutiny to those previously inked agreements, which are often covered by non-disclosure agreements. According to senior government officials from the Department of Canadian Heritage, broadcasters and other news outlets that are not already designated as QCJOs will have to apply separately for designation. Officials explained that because Youtube is set to be brought under the authority of the Broadcasting Act through Bill C-11, the video platform would not be subject to negotiations under the Online News Act. The mandatory bargaining will be governed by a code of conduct, and will carry an undue preference provision that will allow for complaints to be arbitrated by the CRTC, alongside the ability to levy administrative monetary penalties of up to $15 million per day for non-compliance. If the act is passed, Canadian Heritage will develop Governor in Council (GIC) regulations on designation and exemption criteria. Within six months, platforms can apply for exemptions, and will publish guidelines on how news organizations can apply for designation. Within a year, the CRTC will publish its decisions on exemptions and designations, alongside bargaining process regulations, and will develop its undue preference and code of conduct regulations. In a Tuesday press conference, Heritage Minister Pablo Rodriguez said that the department chose the CRTC as the regulator in charge of offer arbitration because the regulator has experience in arbitration. "The CRTC has already experience in arbitration in the broadcasting system. So they already do that. even in this case, their participation will be very limited," Rodriguez told reporters. Despite recent complaints in the telecom sector about delays at the CRTC, the legislation does not place any deadlines on the regulator when it comes to adjudicating complaints or policing the code of conduct, according to senior Heritage officials. The CRTC can establish its own timelines under the act, a senior government official said on the technical briefing call, but the act does not explicitly establish deadlines for the adjudication of complaints. Rodriguez said that the CRTC will be given extra resources to handle the new workload, based on what the regulator tells the department it needs. In a Tuesday evening release, Quebecor Inc. voiced support for the legislation. "The creation of a payment system is necessary in view of the Web giants' market dominance. These platforms use the content produced by Canadian news organizations to generate a significant portion of the interactions on their networks, and should be required to pay a fair price for it," the release said. Through its Quebecor Media subsidiary, Quebecor owns a number of news properties in both broadcasting and publishing. "Like other sovereign jurisdictions, Canada is taking action to protect the intellectual property produced by its news media," Quebecor CEO Pierre Karl Péladeau said in the release. "This bill recognizes that the use and dissemination of news content without payment by foreign platforms is unfair and harmful to our society. The advocacy group FRIENDS (formerly Friends of Canadian Broadcasting) also praised the legislation Tuesday. "We are pleased to see that the government is ensuring that broadcasters like the CBC are compensated for their content, as every type of journalism has fallen victim to the news theft epidemic," FRIENDS executive director Marla Boltman said in a release. "With this legislation, Canada is clearly picking up where Australia left off and there is real potential for us to emerge as a leader when it comes to protecting news and journalism, and ultimately, our democracy," Boltman said. The Fédération nationale des communications et de la culture (FNCC-CSN), a labour federation representing some 6,000 workers across 80 unions, also praised the bill late Tuesday. Updated with reaction to the bill. – Reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca

UPDATED: Gov. launches Online News Act, will mandate bargaining between outlets and web giants for compensation

Broadcast | April 5, 2022

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UPDATED: Gov. launches Online News Act, will mandate bargaining between outlets and web giants for compensation

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