Communication association proposes ‘safe harbor’ provision to retain tech giants in Canadian news market

International communications trade association, Computer and Communications Industry Association (CCIA), has voiced its concerns regarding the Online News Act and its potential implications for digital services providers in response to Canada’s consultation regarding proposed regulations for the implementation of the Online News Act. The Online News Act aims to establish a framework for compensating news businesses by forcing digital news intermediaries (DNIs), such as Alphabet Inc.’s Google and Meta Platform Inc.’s Facebook, Instagram and Threads, to pay outlets for the content that is made available on their services. Meta has already blocked Canadian news content on their platform while Google said it intends to do the same. To ease their concerns, Canadian Heritage proposed regulations to implement the act last month, shedding some light on what platforms and news organizations can expect from the legislation once it comes into force in December. The deadline for consultations was Tuesday. The CCIA contends that the act is based on a flawed premise—that mandatory compensation should be imposed on DNIs above the benefits they already provide to news organizations. “The referral traffic DNIs generate, sending users directly to sites where news organizations can monetize interactions through advertising and subscriptions, benefits news organizations to the tune of hundreds of millions of dollars annually,” CCIA wrote. The CCIA warned that Google and Meta are likely to leave the market and suggested that the government introduce a provision in the regulations that would allow DNIs that have exited to continue serving Canadian news outlets. The outlets would have to be willing to forego compensation in exchange for the services DNIs provide, such as hosting, indexing, and linking news articles. “To be effective, the regulations would have to create a ‘safe harbor’ for such voluntary arrangements and clarify that they would not, if available to all, constitute an undue preference,” CCIA wrote. Another major concern the CCIA raises is the scope of DNIs subject to the law. The CCIA questions the basis for targeting specific companies based on a combination of Canadian users and global revenues, arguing that this approach needs to adequately consider the diverse range of services that these companies offer, many of which are unrelated to news content. “There is no rational basis for assuming that having a specific number of Canadian users…justifies subjecting these particular firms to special obligations vis-a-vis Canadian news organizations.” The CCIA also criticized the proposed minimum contribution threshold for exemption — four per cent of global revenue from all sources that are attributable to Canada — equating it to a minimum tax for DNIs to access the Canadian news market. They argue that this contravenes the prohibition on performance requirements under the Canada-United States-Mexico Agreement (CUSMA) because it requires a payment to Canadian companies as a condition of market access. The four per cent rule also creates a problem by not setting a limit on how much money platforms might have to pay, CCIA added. A proposed regulation would allow any 10 news organizations with as few as 20 journalists to challenge a platform’s contribution. CCIA raised concerns that the organizations might try to get as much money as possible, forcing the platforms to either concede and pay a higher price or go through “the even riskier prospect” of final offer arbitration. Even if platforms follow all the rules and receive an exemption from the CRTC, they may still have to pay money to news outlets that weren’t part of those deals, CCIA argued, because the exemption doesn’t protect the platforms from claims of undue preference. “Accordingly, any news organization not party to a deal struck to qualify for an exemption (who may not even have sought such a deal), could, after an exemption order was issued, claim a right to compensation comparable to deals concluded as a basis for an exemption,” the CCIA wrote, noting that the CRTC should immunize exempt DNIs from undue preference complaints. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca.

Communication association proposes ‘safe harbor’ provision to retain tech giants in Canadian news market

News | October 3, 2023

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Communication association proposes ‘safe harbor’ provision to retain tech giants in Canadian news market

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