Canada’s Online News Act: Parliamentary Hearings Continue (My Testimony)

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The Standing Committee on Canadian Heritage began hearings late last month to review draft legislation (Bill C-18: The Online News Act) that will follow Australia’s example, with some minor tweaks, to require large digital intermediaries (think Google and Facebook for starters) to negotiate financial compensation with news content providers for the platform’s use of news content to attract users, and thus increase their ad revenues. Among the first witnesses was Prof. Rod Sims, former Chair of the Australian Competition and Consumer Commission (ACCC). Sims was the architect of Australia’s successful News Media Bargaining Code. That Code, when enacted into legislation, allowed collective bargaining on the part of media organizations and required “final offer” arbitration between the parties (Australian news media entities and the designated digital platforms) if deals could not be reached voluntarily. In the end, the arbitration provisions of the Code were not invoked as the platforms instead chose to reach “voluntary” agreements with content providers. In his testimony, Sims stressed the benefit that these arrangements had brought to Australian media, both large players and small outlets, including country weeklies, in terms of additional revenues that have translated into increased employment opportunities for journalists.

While Google and Facebook eventually acceded to the Australian legislation after initially threatening to shut down Search in Australia (Google) or to remove all Australian news content from its platform (Facebook)–a clumsy move that seriously backfired, as I wrote about here—they continue to fight the Canadian legislation by deploying many of the same arguments as were trotted out in Australia. As part of this campaign, an influential tech industry association in Washington, DC, one in which both Google and Facebook play lead roles (the Communications & Computer Industry Association, or CCIA), recently published a paper claiming that C-18 would violate Canada’s trade agreement obligations under the USMCA/CUSMA and the Berne Convention. (See my post of last week challenging these arguments).. Others have taken aim at the fact that C-18 has a broad definition of what constitutes “making available” when it comes to news content. “Making available” is the action of the platforms that becomes subject to negotiation with the news media outlets if they facilitate access to content from Canadian news providers. While hyperlinks are not mentioned in the legislation, neither are they excluded and it is apparent that links, headlines and snippets will be covered. In his testimony to the Committee, Michael Geist of the University of Ottawa, a notable C-18 opponent, claimed that inclusion of linking would run counter to Supreme Court jurisprudence on fair dealing, in addition to myriad other criticisms including echoing the CCIA’s questionable interpretation of Canada’s trade obligations as well as questioning the constitutionality of the legislation. These arguments are getting little traction.

Most of the discussion has been about the definition of eligible news businesses and whether really small media outlets can qualify to take part in collective bargaining with the platforms. Along with several other witnesses, I was invited to appear before the Committee on September 27. I focussed my comments on three areas where the legislation has been attacked by its critics, arguing that these criticisms are inaccurate and off base.

A copy of my opening statement to the Committee (with minor additions—like others, I had only five minutes) follows:

”Good Morning. I would like to thank the Committee for giving me the opportunity to present my views on this important issue. I am speaking today in an individual capacity.

In my comments I will be speaking in support of this Bill. In doing so, I would like to address three criticisms that have been brought against it.

One is that the measures proposed by C-18 to stem the decline in journalism are taking aim at the wrong target, the large digital intermediaries, on the grounds that they do not benefit financially from including news content on their platforms, and even if they do, they are already voluntarily providing some financial support to some media.

The second is that the ambit of the Bill is too broad because its definition of “making available” includes some content that would normally be considered fair dealing under the Copyright Act, such as links, headlines and snippets.

The third is that, if implemented in its current form, C-18 would violate Canada’s international trade obligations under the Berne Convention and the Canada-US-Mexico Agreement (CUSMA). I believe all of these criticisms are inaccurate.

I write a weekly blog on international copyright issues and have noted that a number of governments, in the face of fierce opposition from the platforms, have had to resort to legislation in order to level the playing field between news media publishers and the large digital intermediaries.

In 2014 both Germany and Spain passed laws requiring Google to pay news producers for use of their content. Google’s response in Spain was simply to close down Google News, its news aggregation platform, and in Germany to delist any publishers who refused to give Google access to their content without payment. The EU tackled this issue through creation of a limited 2 year press publishers right. Google and Facebook have since come to the table and struck deals with publishers for access to news. France has been particularly successful in this regard.

We know that when Australia decided to “bell this cat”, Google and Facebook mounted a vigorous lobbying campaign and threatened to pull out of Australia. Google also tried unsuccessfully to get the US government to take up its case. In the face of the legislation, however, they backed down and managed to conclude revenue sharing agreements with most Australian media outlets.

In the United States, Congress is currently debating the bipartisan Journalism Competition and Preservation Act (JCPA) which seeks to do much of what C-18 is aiming to accomplish.

I mention these examples to underline that C-18’s objective of helping to preserve a viable professional journalism sector by requiring negotiations for compensation for use of news content by the largest digital intermediaries is not unique; in fact, it is very much in the mainstream of activity taking place in a number of western democracies.

Another criticism of C-18 is that its definition of “making available” is too broad because it includes some actions, such as linking to content, or featuring headlines or snippets, that are normally considered fair dealing under the Copyright Act. There are well established legal precedents in Canada and elsewhere that under most circumstances (but not all) hyperlinking to content is not a violation of copyright. C-18 address this in Section 24, “For greater certainty, limitations and exceptions to copyright under the Copyright Act do not limit the scope of the bargaining process”. (The preceding sentence was not included in my remarks owing to time limitations). It has also been argued that posting hyperlinks provides a benefit to news outlets. Indeed, news outlets do derive a certain benefit from the referral–just as the platforms derive benefit from using news content to attract more users, and thus sell more ads. Under C-18, the balance of respective benefit will be worked out in negotiations between the parties.

While posting hyperlinks, headlines or snippets does not normally constitute a copyright infringement, by the same token C-18 does not deny digital platforms their fair dealing rights. Put another way, their rights under the Copyright Act are not diminished or changed by C-18. However, it will be a violation of the Act if they do not bargain in good faith with respect to making content available. Use of fair dealing exceptions is not a licence to ignore other laws, whether it be the Online News Act, defamation laws or any other legislation. As for the argument that this will interfere with the posting of links by users, such as members of this Committee, that is false. The requirement to bargain over the use of links is restricted in the Bill solely to digital news intermediaries, with a very precise definition.

Likewise, the criticisms that C-18 will violate Canada’s international trade obligations, including the Berne Convention and CUSMA, leading to potential trade retaliation from the United States, do not stand up to scrutiny.

The legislation is drafted in such a way that it does not target US companies, but rather companies with certain market characteristics of size and dominance. Likewise, it does not seek to protect Canadian digital intermediaries that compete directly with Google or Facebook. In addition, the section on non-discrimination does not impose any “must carry” requirements that could violate CUSMA. In the case of Berne, which contains a “right to quotation” under Section 10(1);

 “It shall be permissible to make quotations from a work which has already been lawfully made available to the public, provided that their making is compatible with fair practice, and their extent does not exceed that justified for the purpose, including quotations from newspaper articles and periodicals in the form of press summaries”,

there is nothing in C-18 that derogates from the quotation right. However, use of quotations from news content providers could be a factor in the bargaining process. (The wording of Section 10(1) was not included in my remarks).

Quite apart from not having a strong legal argument to challenge the Bill under either CUSMA or Berne, it is highly unlikely that any government, including the US government, would take up a trade challenge either under CUSMA or the WTO. A key factor is the reality that even within the US high tech sector, not to mention other corporate sectors in the United States, there is no unanimity of views on legislation like C-18. In the case of Australia, when Google threatened to pull its search engine from the country, Microsoft stepped in offering to fill the gap, stating at the same time that it was ready to comply with the new Australian code. In the face of such divided corporate interests and views, it is most unlikely that the US government would be interested in pursuing a controversial trade challenge, one that would in any case be on shaky grounds.

(The reasons why the US government would be most unlikely to take up a trade challenge were not included in my introductory remarks owing to time limitations)

I will end my comments here and look forward to any questions. Thank you.”

There will likely be further hearings later this month to hear from Google and Meta.

© Hugh Stephens, 2022. All Rights Reserved.

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