Publishers, broadcasters clash with Google, news collective over Online News Act exemption

As the CRTC reviews Google’s application for exemption from the requirements of the Online News Act, some news publishers are weighing their industry’s urgent financial needs against their concerns with the collective responsible for administering the funds. The Alphabet Inc. subsidiary applied for an exemption back in June, following an announcement that it had made a deal with the Canadian Journalism Collective (CJC) to distribute its $100 million annual contribution to news organizations. Google stated that by holding an open call for organizations that wish to receive a share of the funds, selecting the CJC as the bargaining group it would deal with, and coming to an agreement that would see the CJC equitably distribute the money, it should be granted a five-year exemption from the mandatory bargaining requirements of the Online News Act. The ultimate goal of the act, which passed into law in June 2023, is to facilitate fair commercial agreements between Canadian news organizations and major online platforms, including search engines and social media sites. If granted an exemption, Google would not be forced to negotiate deals with news businesses and would avoid penalties associated with violating that provision of the act. However, several prominent Canadian media organizations and their advocates — including News Media Canada, the Canadian Association of Broadcasters (CAB), and CBC/Radio-Canada — are raising doubts over the CJC’s ability to handle the responsibility of administering the funds. Unsatisfied with both the terms of the agreement between the CJC and Google as well as the CJC’s bylaws, the groups filed interventions with the CRTC calling on it to force the two parties to make some changes. The three groups argued that an interim exemption of one year, instead of the full five-year exemption that Google is requesting, would give the CJC and Google time to meet their proposed conditions without delaying the distribution of funds. “Once the commission is satisfied that the CJC has an appropriate structure in place to administer the funds, we recommend that the commission issue a full exemption order,” said the CAB. The trio propose a series of conditions to the interim exemption, including requiring the CJC to “remove” its mandate to advocate for growth and innovation in the industry, limit administrative fees to 0.5 per cent of Google’s contribution, and make changes to its dispute resolution mechanisms and governance structure — which is currently planned to be made up of 19 board members, an executive committee, a publishers council, a broadcasters council, and an advisory panel. CJC defends role, emphasizes independence Pointing to the “precarious state” of the Canadian news ecosystem, the CJC defended its mandate in response to arguments from intervenors such as the CAB and Friends of Canadian Media that its mandate has extended too far and that its sole purpose is to manage the funds. “We recognize that the journalistic capacity in the current system is insufficient and, therefore, failing to meet the needs of the entire Canadian public, especially in rural, suburban, low income, racialized, and language communities that are underserved relative to more affluent, urban markets,” said the collective. “This is why the CJC-CCJ must not only contribute to preservation of the existing news ecosystem but also promote growth and innovation, and be positioned to meet the changing circumstances of the news ecosystem as it evolves over time.” In an email to The Wire Report, CJC spokesperson and interim board director Jean La Rose maintained that the collective’s “interpretation of its role is supported by the Online News Act.” La Rose also serves as president of APTN affiliate company Dadan Sivunivut Inc. “The act requires that the agreement Google strikes ‘involves a range of news outlets … that reflect a diversity of business models … contribute to the sustainability of the Canadian news marketplace,’” said La Rose, pointing to provisions found in the legislation. He added that, according to the act, the agreements must “ensure a significant portion of independent local news businesses benefit from them … and they encourage innovative business models in the Canadian news marketplace.” “Fulfilling the objectives of the act requires the CJC-CCJ to weigh and balance sometimes conflicting business interests between, for example, large and small organizations, non-profits and for-profits, and new entrants and incumbents,” the collective explained in its reply comments. “The CJC-CCJ submits that it is also essential to consider the public interest and promote broad participation and news access to realize the intent of the act.” Google and the CJC are opposed to the critics’ demands. Both argued that the conditions proposed by News Media Canada, CAB, and CBC would be an overreach that goes beyond the scope of the Online News Act and its regulations. “The commission should decline to impose such conditions in light of the CJC-CCJ’s rapid progress to date…, and should respect the independence of the CJC-CCJ and its mandate to act in the best interests of the news businesses that it represents,” the collective asserted. Google argued that the CJC was created outside of the act’s bargaining process and is not subject to the CRTC’s regulatory oversight. It added that the CRTC’s role is strictly to “oversee the financial relationship” between online platforms and news businesses, arguing that if it were supposed to intervene in agreements, the act would have tasked the commission with reviewing draft agreements for approval before they are signed. “This is a clear indication that Parliament intended a limited role for the commission with respect to the agreement and the operation of the CJC,” wrote Google. To support the CJC as it establishes itself, Google has committed to “voluntarily provide” an upfront payment of $250,000. “These funds will ensure that CJC is able to continue setting up its organization with all of the appropriate governance and guardrails,” the company said. This has “rendered moot” the argument that an interim exemption is needed to give the CJC time to “properly arrange itself,” asserted Google. Google says interim exemption would not speed anything up “The issuance of an interim exemption will not trigger Google’s obligation to release any funds,” the company argued, continuing its push against any exemption from the act for a term shorter than five years. Google noted that there is no mention of an interim exemption in the signed agreement and that its terms, including the $100 million payment, are based on the condition that a full exemption order is granted. Echoing the CJC’s statements around the importance of its independence, Google also argued that it would be unfair for its exemption to hinge on the internal operations of the CJC. “If the commission determines that a change to the agreement is needed before the criteria for exemption are met, then Google will consider such changes in good faith,” said the company. “However, it cannot unilaterally impose changes on CJC.” “Parliament clearly did not intend for the CRTC to regulate all of the internal operations of the CJC,” argued Google, “so it is beyond the jurisdiction of the CRTC to attempt to do so through the agreement.” The CAB fired back in direct response. “This is incorrect,” it argued, “the act has prescribed clear authority to the commission relating to the exemption order, which is intentionally outside the scope of the bargaining process.” According to the Online News Act, the exemption order “may contain any conditions the commission considers appropriate.” Additionally, an interim order “must contain conditions respecting the measures being taken by the operator and may contain any other condition the commission considers appropriate…” News Media Canada shared the CAB’s sentiments, arguing that the CRTC does have the authority to direct the parties to amend their agreement and — despite what kind of exemption order it decides to issue — can include any conditions it deems necessary, “including conditions that relate to the administration of the collective.” Google insisted that the agreement it signed with the CJC meets all of the necessary criteria. It assured critics that the CRTC is “fully capable of repealing an exemption order at any time” if any issues do arise. Delays risk harming news businesses, Google argues “A less than five year exemption would ultimately hurt the news businesses themselves,” said Google. Such a move would introduce unnecessary uncertainty into the process and would put more administrative burden on the CJC and the news outlets that rely on the funds, the company continued. “Having a steady and reliable source of funding for a five-year period benefits the news businesses, who will be able to set longer term goals for how they plan on using the funds to support the Canadian news landscape,” said Google. “Any shorter exemption could add a barrier to news organizations’ ability to invest in themselves, as well as in sustainable and innovative initiatives that would benefit all Canadians.” Google declined to provide The Wire Report with further comment on the proceeding. – Reporting by Phalen Tynes-MacDonald at pcreed@thewirereport.ca This story was updated to include statements from CJC spokesperson Jean La Rose.

Publishers, broadcasters clash with Google, news collective over Online News Act exemption

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By Phalen Tynes-MacDonald
| September 4, 2024

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Publishers, broadcasters clash with Google, news collective over Online News Act exemption

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