Author: hughstephensblog

(Since the majority of my readership is outside Canada, I have gone into somewhat more background detail in this post than is probably necessary for Canadian readers, who may wish to skip the parts covering some well-rehearsed details of the legislation).

As Canada’s disastrous wildfires continued their destructive path, with 2/3 of the population of the North West Territories (which is roughly the size of France, Spain and England combined) under evacuation orders and with large scale wildfires in British Columbia, with lives and property at risk and with limited access to critical, possibly life-saving information in remote areas served by limited transportation arteries, Meta (which through its Facebook platform is a major site where Canadians access and share news reports), remained unmoved despite pleas from both provincial premiers and federal ministers requesting that it suspend the blockage of news sources that it imposed on Canadian users in early August. This was the company’s response to Bill C-18, which was enacted in June as the Online News Act (ONA). The Act, although passed, will not come into effect until proclaimed on a date no later than 180 days after passage, or December 19, 2023. In the meantime, and even beyond the date of proclamation, the Canadian Radio-television and Telecommunications Commission (the CRTC-the telecoms and broadcast regulator) will be developing implementing regulations, based on public input.

For readers outside Canada, recall that the ONA is based largely on similar Australian legislation (The Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Act 2021) which required dominant internet platforms (Google and Facebook) to reach agreements with Australian media outlets to compensate them fairly for use of news content on the platforms. After threatening to block news or pull out of Australia, the two platforms in the end managed to reach agreement with a sufficient number of Australian media enterprises to avoid designation under the Bargaining Code. Australia declared victory.

Canada took a similar approach, with some modifications,  including requirements for greater transparency. Instead of having the minister “designate” platforms subject to the legislation, the Canadian legislation requires the platforms to self-designate if they meet certain criteria. Those criteria have now been clearly established, in draft regulations issued by the government on September 1. The law will apply to a “digital news intermediary” (defined as a search engine that aggregates news content and pathways to the content of news outlets corresponding to search queries made by visitors; or a social media service that facilitates interactions between users and news content through a social network) that has total revenue from all sources in the previous calendar year exceeding $1 billion and which has had, during the previous calendar year, an average of at least 20 million unique visitors in Canada per month to the search engine, or at least 20 million active users in Canada per month to the social media service. The definition fits Google and Facebook (but not Instagram), and no others at this point, although it is possible in future that a search engine like Microsoft’s Bing might qualify if it increased its number of users.  

The definition of digital news intermediary is thus dependent on three primary factors; amount of global revenue, penetration of the Canadian market and whether it uses Canadian news content. The terms “aggregation” and “facilitation” in the regulations include not only repurposing or excerpting the content, but also linking to it. While some critics of the ONA have claimed inclusion of links is unprecedented (while trotting out the usual red herring that this will undermine and “break” the internet) and that setting value on content accessed through links constitutes a “links tax” (this a favourite phrase of C-18 critic Michael Geist of the University of Ottawa), this is not correct. First, it is not unprecedented. The Australian legislation also covered links, as media blogger Howard Law has clearly demonstrated. Second, the internet works just fine in Australia. In the end, the platforms were able to accommodate the Australian legislation.

In Canada, however, to date this has proven impossible. Meta has chosen to “comply” with C-18 by blocking news rather than enter negotiations with news content providers. This is presumably part of its ploy to avoid self-designation (which it must do within 30 days of the Act coming into force if it falls under the Act), even though it meets the other criteria. The legislation, unfortunately, was drafted in such a way as to provide this explicit escape hatch to the platforms. Both Google and Facebook opposed the legislation and warned that they might block news, so this is not a complete surprise although the process is not yet over, especially when it comes to Google.

One of the complaints of the platforms was the “uncapped financial liability” C-18 would present. The legislation imposes final offer arbitration if news content providers and digital news intermediaries cannot reach agreement. Under this system an arbitrator selects one of the two final offers presented by the contesting sides. In theory this could expose the platforms to an uncertain degree of financial risk, making planning difficult if their offer was considered too low and the arbitration process ended up favouring the news content providers. To address this concern, the September 1 draft regulations clarify the expectations for revenue contribution by the platforms.

The formula consists of the intermediary’s global revenue times Canada’s share of global GDP times four percent. Thus the intermediary’s contribution to Canadian journalism is expected to be around 4% of its Canadian revenues, while being subject to some other criteria such as fair agreements being within 20% of average relative compensation, committing to the production of news content, protecting journalistic independence and including independent local, Indigenous and official language minority community news businesses. While technically the new regulations set only the minimum contributions required, in fact they amount to a de facto cap on contributions because once the minimum is met, the platforms can request, and will be granted, an exemption from the application of the Act and will not be subject to the arbitration process. Based on the 4% figure, the estimated contributions from the process were identified as $172 million a year from Google and $62 million (Canadian dollars) a year from Facebook. This provides a degree of certainty, as requested by the platforms, but will this end the impasse?

As the blog MediaPolicy.ca noted, “Canada gives Big Tech what they asked for on C-18”, although Michael Geist expressed the contrary view, declaring that the draft regulations just increased the chances of no news on Meta and Google in Canada. According to him, the global implications could run into the billions for Google alone, and “no country in the world has come close to setting this standard”. I am not so sure about that. The Australian government reported that its legislation had resulted in payments of US$140 million (AUD$200 million) to Australian news organizations in its first year. CAD$234 million, the supposed price tag for the two platforms in Canada totals US$170 million. Given that the Canadian economy is about 25% larger than that of Australia in terms of total GDP, and its population is 50% larger, the 15% increase in expected financial contribution would seem, in fact, to be very much in line (in fact smaller proportionally) with the contribution made by the platforms Down Under. The question is, however, whether Google and Facebook are prepared to replicate the Australian experience in Canada (and elsewhere), or are having second thoughts about the implications of the deal they struck. Maybe being “second mover” is not such an advantage for Canada after all.

Now the argument has been removed that the ONA’s financial obligations for the platforms are unlimited, the real issue stands in the open, bereft of its camouflage. Are the platforms willing to pay a small share of the revenues they generate in Canada (and elsewhere) to support journalism in order to be able to continue to display news? The essence of the argument requiring payment is that curated, professional news content has value (in terms of attracting and retaining viewers, which can be monetized through online ad sales, which is where Google and Facebook dominate, controlling 80% of digital advertising). That content is expensive to produce, and the ad revenues that once provided much of the financial support for journalism have migrated to the online intermediaries. A viable Fourth Estate is essential for the effective functioning of democracy so, as the argument goes, those who have benefited from this content and who have reached a quasi-monopolistic dominance, should be expected to make a financial contribution toward its maintenance.

The logic is compelling; even the platforms seem to agree with this proposition since both have instituted various grant programs to provide support to journalism. The key question, though, is what form should the financial support take and who gets to decide how much it should be? The platforms want to be in the driver’s seat and make those decisions. They don’t like governments telling them what to do. Should the support be on terms set by the platforms, where they negotiate ad seriatim with various news content providers, on their terms while keeping those terms secret, or should there be a transparent framework where the media providers can negotiate as an entity (if they wish), backed up in extremis by the stick of possible arbitration? That is what Australia did, and what Canada is trying to do.

But will it work? It depends on who holds the most leverage-a sovereign government or two giant hi-tech internet companies. Normally, in the final analysis, a government in a modern country like Canada would prevail, but it is a high stakes game. For the platforms, who may be regretting the deal they struck in Australia, now may be the time to dig in. For Meta, that seems to be the case. Their objection seems as much ideological as financial, although the financial concerns cannot be ignored given the development of legislation similar to C-18 in the US (the Journalism Competition and Preservation Act, and parallel legislation in California) , the UK, New Zealand and no doubt soon in other countries.

Facebook insists it derives little or no value from hosting news content, and instead provides a benefit to news organizations by giving them exposure. It is an unfortunate fact that many consumers in Canada and other countries access and share news primarily through the Facebook platform. According to the Canadian government, 69% of Canadian consumers access news online. That does not mean they all use Facebook; they can just as easily go directly to various news sites operated by the media, but there is no question that Facebook is a convenient way to share news, by posting links or snippets. Facebook has made it that way, and there is not much real competition. That is the unfortunate reality as over the years, Meta has bought out any viable competition, giving it a virtual monopoly. It may be that Meta has decided it can get away with thumbing its nose at Canada, and that, in Canada and potentially elsewhere, it will purge its platform of news, betting that people will still come to it for social interactions. Maybe their gamble will be right. And maybe it will be a good thing if consumers start going directly to news sources instead of mindlessly logging onto Facebook for all their needs. Possibly, (and hopefully, from my perspective) there will be a lessening of dependence on this one platform, and consumers will spend more of their online time elsewhere. If Facebook’s revenues suffer, it is what they asked for and what they deserve.

Google’s situation is different. It has competition, it needs to maintain a viable search engine in Canada, and Google Search will lose effectiveness if it cuts off the population of a country the size of Canada from contributing algorithmically to its search results for news. Google has also been less categoric about whether it will block news search in Canada, although it has threatened to do so. It has also played hardball with the Canadian media by beginning to terminate some of the revenue-sharing arrangements it had already reached (arrangements that the ONA would specifically recognize as part of Google’s contribution). At the same time, Google is looking over its shoulder at Microsoft which is not (yet) covered by the ONA because it does not have sufficient penetration. In Australia, Microsoft made a point of endorsing the legislation and the Bargaining Code; in Canada it has said that if it were to “qualify” for designation under the ONA it would comply with the legislation as it applies to its products, (presumably not by opting out, as Google is threatening to do).

The domestic political situation in Canada is also different from that which existed in Australia, where there was broad all-party support for bringing the platforms to heel. Unfortunately, that same solidarity does not exist in Canada, and the platforms will not hesitate to exploit these political divisions. The opposition Conservatives under a previous leader were onside with making big tech pay its share, but under current Conservative leader Pierre Polievre, C-18 has become one more stick with which to beat the government. There is no question that the Trudeau government’s management of the file could have been handled better, but Polievre has distorted the C-18 debate to become one of government intervention versus free expression. He has also enlisted the legislation in his crusade against the publicly funded CBC (which would benefit significantly from C-18 because of its extensive news operations). Defunding the CBC—seen by many on the right as a left leaning media organization—is one of Polievre’s favourite talking points. At present, the Conservatives are up in the polls and the platforms may be wagering that if they can wait out the Trudeau Liberals (an election must be held by the fall of 2025 at the latest), a new government might reverse C-18. They are eager for a chance to push back on what seems like a growing international tide of jurisdictions willing to take on Big Tech.

Back to the question posed in the title of this blog posting. How likely is it that the new regulations clarifying the revenue expectations of the platforms will bring about an end to the news blocking? The new measures give Google what they were asking for and given where Google stands on this issue (with Microsoft breathing down its neck), it has every reason to find a response that will satisfy the intent of the ONA. However, nothing, it seems, will satisfy Meta short of the complete withdrawal or gutting of the Act, and that is not going to happen. It is politically untenable for the Trudeau government to back down. My conclusion, therefore, is that the new regulations have helped move things forward with the biggest player, Google, but with respect to Facebook, probably nothing will lead Mark Zuckerberg to change his mind (although one never knows for sure).

The stakes are high for Canada and for the Trudeau government. They are also high for other countries contemplating similar moves to require the big internet platforms to make a financial contribution to the sustenance of professional journalism. The end result may be a welcome infusion of some financial resources to the stressed journalism sector from Google, along with a change of behaviour for Canadian consumers who may no longer be able to find or share news sources on Facebook. Although Facebook  has made itself seem indispensable to many as a vehicle of information exchange, by shooting itself in the foot through its blockage of news, it may just be starting a trend of encouraging consumers to look elsewhere for their information needs.  If that helps bring people back to direct news sources, and provides some competition for Facebook, that won’t be a bad outcome. And that may be an outcome replicated in other countries as they come to grips with the same issues and the same players.

© Hugh Stephens, 2023. All Rights Reserved.

On August 3, almost 30 organizations,[i] representing 50,000 Canadian writers, visual artists and publishers released an open letter to newly appointed Heritage Minister Pascale St. Onge urging her to tackle “meaningful copyright reform”. That is the code-word for the need to end the current free-riding by the education sector–elementary, secondary and post-secondary–in Canada (outside Québec) on the works of Canada’s authors, artists and publishers, a situation exacerbated if not created by the addition in 2012 of a broad limitation on copyright protection for the purposes of “education”. The result has been nothing less than catastrophic for Canada’s creators and educational publishers, resulting in a massive transfer of value from creators of original content to educational providers, who have used the education fair dealing exception to cease licensing most content used for teaching purposes. I highlighted this problem in a recent Globe editorial (“Why We Need Copyright Reform Now”) and in my just-released book, “In Defence of Copyright”. Québec is the one part of Canada that still respects the value of content produced by authors, Québecois, Canadian and others, and its educational institutions have continued to license content from the copyright collective that serves the Québec market, Copibec. Not so in the rest of Canada.

As I noted in the Globe and Mail, the perhaps well-intentioned but misguided addition of the broad category of “education” to the list of specified fair dealing exceptions to copyright in back at the time of the last revision of the Copyright Act in 2012 opened the door to wide-scale unlicensed copying of hard copy and digital content by schools and post-secondary institutions, eager to pocket savings at the expense of creators. Students, who the institutions argue are the beneficiaries of this arrangement, have only seen their fees increase over this period.  Despite a decade of litigation, the situation is still not clear. The result is not only a drastic decline in revenues for authors, revenues that one would expect would accrue to them if their work is being used as part of the educational process, but also a significant decline in production of Canadian works and texts.

There is, however, a relatively straightforward solution, one proposed by the Parliamentary Standing Committee on Canadian Heritage (Recommendation 18). That is to disallow fair dealing under the “education” rubrique for education institutions and ministries when commercially licensed alternatives are available in the market. This modification will preserve the right of students to freely access materials for study and research while protecting the output of authors and publishers, ending the free ride by educational institutions. By the way, this will not give the publishers carte blanche to set prices. When content licensing is conducted through a copyright collective organization, if there is disagreement with users over the amount of copying taking place (and thus the amounts of compensation that should be paid for a copyright licence), the Copyright Board of Canada steps in to adjudicate and determine a fair rate or tariff per student per year at various levels of the educational establishment.

The Trudeau government made a commitment in recent mandate letters to ministers to amend the Copyright Act “to further protect artists, creators and copyright holders”. Those instructions were in the mandate letters of Industry minister François-Philippe Champagne and previous Heritage minister Pablo Rodriguez. A new mandate letter for Minister St. Onge has not yet been released. While she has yet to receive her marching orders, given St. Onge’s previous background, one can assume she is likely sympathetic to creators’ concerns. Before entering politics in 2021 she was Secretary General then President of the Fédération nationale des communications et de la culture. According to her official bio,

“she worked to address the challenges facing the media, newspapers, and the cultural sector. In this role, she oversaw expert studies aimed at developing public policies, participated in the creation and adoption of programs to support the print media, and contributed to the implementation of policies and programs designed to help the media and cultural sectors adapt to shifts brought about by digital platforms.”

This seems like a solid background for a Minister of Canadian Heritage. However, in Canada the lead minister responsible for the Copyright Act is the Minister of Industry, Science and Economic Development, Mr. Champagne. Both ministers and ministries need to act, and act now. The cri de coeur from the cultural industries and from Canada’s writers, artists and publishers can no longer be ignored.

© Hugh Stephens, 2023. All Rights Reserved.

[i] (Access Copyright, Association of Book Publishers of BC (Books BC), Association of Canadian Publishers, Association of Manitoba Book Publishers, Book Publishers Association of Alberta, Canadian Artists’ Representation (CARFAC), Canadian Authors Association, Canadian Publishers’ Council, Canadian Society of Children’s Authors, Illustrators and Performers (CANSCAIP), Coalition for the Diversity of Cultural Expressions, Copibec, Copyright Visual Artists – CARCC, League of Canadian Poets, Literary Press Group of Canada, Manitoba Writers’ Guild, News Media Canada, Playwrights Guild of Canada, Regroupement des artistes en arts visuels du Québec (RAAV), Saskatchewan Writers’ Guild, SaskBooks, The Writers’ Union of Canada, Union des écrivaines et des écrivains québécois (UNEQ), WritersNL, Writers’ Federation of New Brunswick and Writers’ Guild of Alberta)

In Defence of Copyright is available at leading local bookstores (if in Canada enter your postal code here) and online through Indigo, McNally Robinson and Amazon.

The platform for exchange of ideas and expression provided by the internet is, as I think everyone today now knows, a two-edged sword. It can empower thinkers and promote freedom, but it can also provide a platform for anonymous spewers of hatred and misinformation in all its forms. The question of who is responsible for managing this powerful tool, and the role of governments in ensuring responsible management, is at the heart of online safety (aka online harms) legislation in various countries. Australia and the EU have taken the lead. Australia passed an Online Safety Act in 2021, targeting cyber-bullying, image-based abuse and promotion of terrorism. The EU has enacted a Digital Services Act, which is slated to come into effect in early 2024. The UK is grappling with a draft Online Safety Act. In the US, regulatory efforts are lagging although a Kids Online Safety Act is currently under consideration in Congress but it only relates to a limited number of harms aimed at minors.

In Canada, a first effort which was presented for public consultation in 2021 was pulled back in the face of widespread criticism that it was too broad and would stifle free speech. If the internet is a two-edged sword, so is the idea of regulating speech on the internet. Most responsible people recognize that some limits are necessary, but equally there is concern about where the line is to be drawn, and who gets to make those decisions. When does combatting harmful speech (harmful speech can be both lawful or unlawful) cross over into censorship? While decisions over what to proscribe and what to allow, even if hurtful or damaging to some individuals, is complex and controversial, the situation becomes even more complicated and difficult to combat when state actors misuse the internet to advance their own political agendas. As the Canadian consultation document on Online Harms noted,

“Online platforms are increasingly central to participation in democratic, cultural and public life. However, such platforms can also be used to threaten and intimidate Canadians and to promote views that target communities, put people’s safety at risk, and undermine Canada’s social cohesion or democracy.”

This problem was highlighted in this year’s annual report of PEN Canada, “Digital Transnational Repression”. PEN Canada, for those of you who don’t know, is the Canadian chapter of  PEN International, the London-based organization dating back to 1921 that advocates for freedom of expression for writers and journalists globally. The report highlights the cases of four expatriated women who now live in Canada, from Iran, Turkey and China.

Farah (not her real name) was a university student in Iran who was arrested and prosecuted by the Iranian authorities for human rights activities before she sought exile in Canada. Maryam Shafpour, also from Iran, was a human rights activist and blogger who spent two years in prison on charges of anti-regime propaganda, who came to Canada after her release. Arzu Yildiz was a court reporter in Turkey (aka Turkiye) who fled after an arrest warrant was issued alleging terrorist propaganda because of her social media postings about torture of suspects arrested after an aborted coup in 2015. She eventually sought refugee status in Canada. Sheng Xue left China after the 1989 TianAnMen Incident and has lived in Canada since then. She is active in leading human rights activities in support of dissident and minority groups in China. What all these women have in common is that they have been targets of digital transnational repression, in other words they have been victims of online harassment and threats perpetrated, directly or indirectly, by state actors.

According to PEN Canada, Farah has been the target of smear campaigns on social media, including false allegations regarding her sexual behaviour and fabricated videos and photos intended to defame and harm her reputation. Maryam has also been attacked with posts and videos telling fabricated stories about her sexual, financial and political activities. Attempts to ruin reputation and credibility seem to be a prime aim of many misinformation campaigns. Arzu, labelled a terrorist by the Turkish government, wants the opportunity to clear her name in a Canadian court. Sheng Xue has also been the target of online campaigns to try to destroy her reputation. In the pre-internet era, the threats were by phone or mail. Abuse is conducted through Groups on WeChat, China’s most popular social media platform. Fake photos have been posted on Twitter. WeChat has been in the news in Canada lately as a result of a report from Global Affairs Canada that Conservative MP Michael Chong was the target of a concerted campaign on WeChat to discredit him during a recent by-election in May. The Global Affairs report stated that;

“Between May 4 and 13, 2023, a coordinated network of WeChat’s news accounts featured, shared and amplified a large volume of false or misleading narratives about Mr. Chong. Most of the activity was targeted at spreading false narratives about his identity, including commentary and claims about his background, political stances and family’s heritage.”

The report noted that it could not be proven unequivocally that China ordered and directed the operation while indicating that China’s role in the information operation is “highly probable”. It also stated that the false narratives violated WeChat’s user code of conduct but there was no indication the platform had applied its own content moderation standards. This is not a surprise. To get WeChat to call out a Chinese government or United Front covert activity on social media is about as likely as Donald Trump admitting that he lost the 2020 Presidential election.

Research on the forms of digital transnational repression reported on by PEN Canada has been led by the University of Toronto’s Citizen Lab, an interdisciplinary “laboratory” focussed on research related to information and communication technologies, human rights, and global security. While NGOs like the Citizen Lab can call out abusive behaviour by non-state and state actors, victims have very limited recourse. Attempts by the four women featured in the PEN Canada report to have the authorities take action inevitably ended nowhere. Where does one turn? Local police forces are basically not interested, or do not have the resources or knowledge to do anything. Inaction is justified on the basis of protecting freedom of expression. Security and intelligence services are not much better at providing support, if you can even get them interested.  It takes a victim with the profile of Mr. Chong (who was the target of Chinese political interference during the last general election, leading to the recent expulsion of a Chinese diplomat) to get anyone’s attention. The laws of Canada, and most democratic countries, are not fit for purpose when it comes to combatting online harms and hate speech, let alone personal attacks and misinformation directed at individuals whom the overseas regime wishes to silence or discredit.

Will Canada’s eventual Online Harms legislation deal with this problem? Platforms already can be compelled to remove defamatory content if they have knowledge that the content meets the legal definition of defamation, as Google recently found out when it was fined $500,000 by a Quebec court for refusing to remove listings about a person wrongfully accused of pedophilia. Google had argued that language in the new NAFTA Agreement, the USMCA/CUSMA gave it equivalent protection to that which it enjoys in the US under the notorious Section 230 (of the 1996 Communications Decency Act). This is the much-abused US legislation that has allowed internet platforms to avoid any civil liability for harmful content made available on their services. At the time of the conclusion of the USMCA/CUSMA I argued that Section 230 did not apply in Canada, a conclusion that the recent court decision has validated. However, to force platforms to block defamatory content requires time and deep pockets. Given the platforms general unwillingness to comply, and to fight in court every attempt to make them do so, success in forcing them to belatedly act comes only to the persistent and well-heeled person, who is usually forced to go to court to force the platforms to do the obvious right thing.

Online Harms legislation will put greater onus on the platforms to monitor for harms and to take corrective action, according to set of defined criteria. But how broad or how narrow should the criteria be? Here again is the perennial problem of the two-edged sword. Even PEN Canada, which vigorously advocates for protection for writers and journalists, and which has featured the problem of digital transnational repression, does not have an agreed position on the legislation. In its annual report, it states;

“PEN continues to monitor the (Canadian) government’s efforts to introduce legislation to address misinformation and online harms. The freedom of expression issues in regulating online communications are obvious, but cut both ways. We see how bullying behaviour silences voices in the digital commons, to the detriment of free expression, but also recognize the dangers of government regulation of online speech…PEN believes that action is needed to address online harms which are doing so much damage to our democracy. But we believe we should move with caution, transparency, and sensitivity to the public’s right to freedom of expression, to avoid threatening that which we are trying to protect.”

That pretty well sums up the dilemma.

When state actors abuse the guarantees of freedom of expression built into democratic societies, it is an unfair fight. They take advantage of freedoms of communication that they themselves deny their citizens, and use those freedoms to target, intimidate and possibly silence those who speak out against repression through personal attacks, misinformation, innuendo, and so on. The police, the platforms and even the judiciary are not of much help in protecting against this form of abuse. Online safety or online harms legislation needs to find a surgical approach (using a scalpel rather than an axe) to address these forms of abuse while protecting the underlying principles of freedom of expression.

© Hugh Stephens, 2023. All Rights Reserved.

Like many people, my daughter is interested in acquiring a hybrid vehicle, to save on gas and to help save the planet. Among the models she has been looking at is the Toyota Prius, so when I saw a review of the 2023 Prius in the Driving section of my local paper, the Victoria Times-Colonist, I thought I would send it to her. I went to Google Search and typed in “Times Colonist Toyota Hybrid” (using the key words from the headline of the review). To my surprise and annoyance, I did not get a link to the review. Instead, I received the following message, or something like it, “No News Coverage Available. Try Again Later”. WTF?

The only explanation I could think of was that I had been caught in Google’s experimental blocking of Canadian news for users in Canada. This test blocking is part of its campaign to resist the intent of Canada’s new Online News Act (Bill C-18) which requires Google (and Meta) to reach agreements with Canadian news providers to compensate them for use of their news content when such content is made available by the platforms. That was the intent of the legislation, modelled on similar legislation introduced in Australia a couple of years ago. However, if the two internet giants decline to negotiate for use of news content, their other option is to ensure that no Canadian news is available on their platforms. This is the route that both Google and Meta have said they will follow. I was learning first-hand what it’s like to be blocked from access to news.  

So, what to do? Simple. I immediately clicked on the Bing icon on my phone (which I had downloaded as a backup just in case Google pulled this stunt on me), and voilà, there was the story. Admittedly it was in Press Reader, not my favourite format, but at least I had all the information I needed. Bing also provided a link to the original syndicated review, which had appeared in the Detroit News, as well as the same review in an Automotive Magazine. I was surprised to have received the “no news” message as I had read that those who were victims of Google’s blocking experiment, like communications professional Michael Gendron, were able to tell they were part of the exercise only because the news offered to them was only from non-Canadian, mainly US, sources. So, under Google’s blocking regime, if you want the latest information on the wildfire possibly blocking a major road artery in your local area, and you Google it, you would get only general news about Canadian wildfires sending smoke to blanket US cities. Interestingly, when I tried again a bit later, Google decided to let me access the story I had been seeking, taking me directly to the Times Colonist site. Why all this happened I don’t know, but I do know that I have never not been able to access news stories before on Google, except in China, but there the blocking was done by the Chinese government, not by the platform.

The closest analogy to the current situation in Canada is Australia, where Google threatened to block access to its search function by Australian users. Google’s tactics in Australia were a combination of carrot and stick, as I wrote about here, with Google reaching agreement with some Australian news providers, only to suspend those agreements because it opposed being subject to the Australian News Media Bargaining Code. Then, it threatened to block Google Search for Australian users. The Australian government pushed back against these tactics, but the situation took a turn for the worse for Google when Microsoft announced it would be happy to step into the breach and play ball with Australia.  (Google’s Tussle Over Payment for News Content in Australia: Microsoft Scrambles the Cards–With Positive Implications for Canada and Others). This stance taken by another powerful American company also undercut any likelihood that the US government would intervene on Google’s behalf.

With regard to Canada, Google and Meta have been striving to get the US government, in the form of the US Trade Representative (USTR), to intervene regarding C-18, arguing that it violates the new NAFTA, the USMCA/CUSMA. Their lobby group in Washington produced a paper last year when C-18 was still in process arguing that the legislation violated Canadian obligations to provide US companies with “national treatment” (like for like with domestic companies in like circumstances). Their arguments were wrong then, and are still wrong although that hasn’t stopped them from trying through their advocates in Congress to pressure USTR to launch retaliation under the USMCA/CUSMA. Apart from the fact that there is no violation of national treatment under the CUSMA because C-18 does not seek to discriminate in favour of Canadian online platforms that compete with Google and Meta, it is most unlikely that the US government would champion the cause of these two particular US companies given the wide range of US commercial and political interests engaged in the overall Canada-US relationship, the possibility of similar legislation to C-18 passing in the US, and the general unpopularity of the tech giants on Capitol Hill. A good summary of the current status of the issue in Washington was provided recently by the US publication, Inside US Trade. (Full disclosure; I am quoted).

At this stage, no-one knows for sure what will happen regarding Google’s threats to block access to Canadian news. I am still betting on the fact that a compromise is possible and that Google in particular will realize it has more to lose by blocking news in Canada than in coming to a reasonable accommodation with Canadian news providers. If that doesn’t happen and Google follows through on its threat to block news—thereby damaging its reputation internationally not to mention compromising the basis of its algorithms that govern search, based on user requests—then the solution for Canadian users is easy. Go find an alternative. It could be Bing, Yahoo, DuckDuckGo, or others. They all work, but Microsoft’s Bing is the other (relatively) big guy on the block. Google, by its own stupidity and cupidity, just reminded me that there is an attractive, valid alternative.

© Hugh Stephens 2023. All Rights Reserved.

P.S. If you are wondering why Microsoft does not face the same choice as Google when it comes to reaching agreement with news content providers or blocking availability of news, it has to do with market dominance–referred to in the legislation as “significant bargaining power”–(as a result of dominating viewership and thus advertising markets), or lack thereof. However, in the case of Australia while Microsoft was in the same position of not being subject to the News Media Bargaining Code, in its announcement it said that should its market share grow to the point that the Code was applicable to it, it would comply with the Code’s requirements because it was important to support professional journalism.

I am pleased to announce that my book, “In Defence of Copyright”, published by Cormorant Books in Toronto, is now available to pre-order through local bookstores, Indigo (stores and online) in Canada, and online through Amazon, and will be in stores as of August 19. If you live in Canada, you can enter your postal code (here) and locate the closest independent book store where it can be pre-ordered or will be available. You might ask why we need a book defending copyright. It’s a good question and one that is at the root of why I wrote it.

Many people have a general idea of what copyright is although fewer seem to understand its real purpose. It is not to make authors, publishers, record labels or movie studios rich (although one of its premises is to provide a fair reward for creative effort and taking on the risk of distribution). It is not to force cash-strapped students to purchase expensive textbooks (although they should pay a fair price for the valuable content produced by others that they consume). It is not about preventing people from downloading content from the internet (although that is an element of copyright protection). It is to strengthen our society by establishing the conditions for the creation of content that enriches and improves our lives, whether it be literature, art, music, movies, television shows, photography, architecture or even the software that runs computer programs. Copyright constitutes a fundamental pillar of our democratic way of life by giving “authors” (those who create the content that we consume) the rights to control how and where their creative works are used.

I wrote this book because of the myths I have come across when talking with people about copyright. Some young people, unduly influenced I think by social media, seem to think that copyright is a barrier placed by big corporations between themselves and content they want to access. They seem to think it is there to make their lives difficult, to deny them what is “rightfully” theirs for the taking. Others, who should know better, argue that it impedes fair access to education. Still others claim that it prevents people from building on and using pre-existing knowledge. And then there are those who, while well able to afford the minimal price of obtaining legitimate copies, openly brag of their prowess in getting for free that which they know they should be paying for, because “no-one gets hurt”. These people, most of them perfectly upright and law-abiding citizens in every other aspect of their lives, should reflect on the long-term and indirect consequences of their payment-evading “skills”.

These myths need to be addressed, and that in part is what I have tried to do. Copyright in no way limits learning or new ideas; it simply protects an author’s expression of an idea. And yes, sometimes the terms for access require payment, although there is a very wide range of exceptions allowing unauthorized (permissionless) but legal use. Even with this plethora of exceptions, however, there are some who would stretch copyright to its breaking point, as I also discuss. As a concept it is remarkably simple, (it requires only originality, expression, and fixation—i.e. being expressed in a material form of some kind) –and today is established automatically upon creation, yet it can be very complex in its application as the imposing corpus of copyright law attests. This book is not written to expound on complex legal cases, although it refers to some key legal decisions to explain concepts. Rather it is written for the lay reader, the interested public, the informed but non-specialist practitioner and for anyone who wants to understand the basic concepts of copyright, illustrated through various examples (many of them drawn from this blog) written in a way that is, I hope, entertaining.

The book starts with my personal explanation about how I came to have a deeper understanding of the true importance of a good copyright regime in contemporary society. Chapter One provides an overview of what copyright consists of, with a focus on the role of the author, (shorthand for all creators, whether writers, artists, songwriters, performers and so on), from both an economic and moral point of view. Chapter 2 delves into the history of copyright, explaining its roots particularly in British and US jurisprudence, how it has played out in Canada, and its international dimensions. Chapter 3 looks at copyright’s limitations and exceptions, addressing the essential issue of user’s rights. In Chapter 4 I discuss piracy, its antecedents, its manifestations today, and its consequences with three case studies in Chapter 5. The sixth chapter looks at what I call “Contested Uses”, the legal and social debates about the application of copyright protection to specified uses, such as Google’s indexing of books, “Controlled Digital Lending” by libraries and the Internet Archive, use of news snippets and content by online platforms and the ongoing saga of widespread unauthorized copying of copyrighted educational materials by educational institutions in Canada. Chapter 7 deals with emerging issues related to copyright, specifically artificial intelligence (AI), blockchain technology and Non-Fungible Tokens (NFTs) and the application of copyright to Indigenous Cultural Expression. I wrap up with my summary defending copyright, followed by a selection of several of the most popular blog posts from this blog over the past seven years. (I am not going to tell you which ones; buy the book!).

While of particular interest to Canadian readers, this book is written for a wide audience in other English-speaking countries. It is certainly not a textbook but could be useful at an undergraduate level for students interested in gaining a broader background on copyright’s place in law and society, for example students enrolled in communications or creative writing courses, and as general reading for those interested in gaining a deeper appreciation for the role, function and effect of copyright today, in Canada and elsewhere.

Roanie Levy, CEO & President of Access Copyright, has read an advance copy and posted a very generous review on her LinkedIn page.

https://www.linkedin.com/feed/update/urn:li:activity:7092158736739291136/

She enjoyed the book. I hope you will too.

© Hugh Stephens, 2023

In Defence of Copyright

Identifiers: Canadiana (print) 20220263930 | Canadiana (ebook) 20220284040

ISBN 9781770866799 (softcover) | ISBN 9781770866805 (HTML)

Cormorant Books, Inc, Toronto

$19.95

I will confess to having kept a diary for many years. What started out as a way to keep track of holidays and so on became a persistent habit that I have been unable to break to this day. It’s not as if I go back and re-read them regularly, but a diary is enormously helpful in settling disputes over where we were, and when, at any given time in the past. Aha. I knew it was 2015 and not 2016 when we saw Aunt Maud. And, of course, it brings back the immediacy of whatever was happening that day. It is sometimes surprising what gets into a diary (an overcooked steak on a barbeque for example) while world events can go sailing by with scarcely a mention. (That is what newspaper archives are for).

The other day I came across an article in my local newspaper titled “Do you know where your diary is?”. The author, a self-described “amateur sleuth”, wrote about a diary museum she had discovered in Italy, the Piccolo Museo del Diario. The author mentions that the Little Library Museum is part of Italy’s National Diary Archive, home to over 10,000 fragments, memoirs, photos and archives. Most are from “ordinary people”, which is the case all over the world. There are some famous diaries that have been published, such as the Diary of Anne Frank, but most diaries remain unpublished, and many are simply a monologue between the diarist and the daily blank page. Diaries can be very personal, revealing confidences, as well as factual on-the-ground reports of what actually happened from the perspective of one observer, or they can deliberately omit unpleasant facts and rewrite events of the day to suit the fancies of the diarist. Most are not intended to see the light of day, but what happens when you move on? Will someone else read them? Will that person decide to publish them, or excerpts of them? What if they are publicly displayed in a museum, like the Piccolo Museo del Diario? Who really owns the content of a diary?

You will probably not be surprised to know there is a copyright element to this puzzle. Whether published or unpublished, the diarist will hold the copyright to the contents of the diary for it was he or she who created it. Whatever they wrote is an original form of expression of various ideas, and it exists in a tangible form. Voilà. All the essentials for copyright are there. That copyright will persist for a number of years after the death of the writer, for a full seven decades in the case of most western countries today. The diaries themselves could be sold–this might happen if they were the work of someone famous–but even under these circumstances the purchaser does not hold the copyright. The copyright holder controls the right to reproduce and distribute excerpts from the diary. Most posthumous copyrights are held by the heirs to the estate of the diarist, which facilitates the creation of family histories. However, as one professional archivist has noted, in a blog post on Copyright Fundamentals for Family Historians,

“I may have a diary my mother wrote, but she still retains the copyright of its contents. If I wanted to publish this diary, in whole or in part, I would need to ask permission first.”

And if your mother is not around to ask, unless you are the designated heir to her estate, you would need to ask permission of whoever that is, or, if you are sharing the estate with someone else, a sibling for example, you would need to get that person’s permission to publish. Many diaries, however, are in the public domain, their copyright having expired. So, if you are going to quote from the letters of Pliny the Younger describing the eruption of Vesuvius and the destruction of Pompeii in AD79, you are on firm ground.

Letters are also protected by copyright, as Megan Markle, Duchess of Sussex, clearly proved with her successful lawsuit against the British tabloid Daily Mail for publishing excerpts from her private letters to her father. The Mail was ordered to pay substantial financial remedies to offset Markle’s legal costs for violating her copyright. A separate action regarding violation of privacy also went against the Mail although the award for damages in that case was symbolic.

If you don’t want your diaries read or worse, published, after you are no longer here, then burn them. Otherwise, your heir or heirs will call the shots. Moreover, at some point in the future, when your copyright has expired, they will be in the public domain and freely publishable by anyone. This is assuming that anyone at that stage would actually be interested in publishing your catalogue of daily doings and impressions. It’s most unlikely. My advice to diarists: Write for yourself, not the future.

© Hugh Stephens, 2023. All Rights Reserved.

When does “compromising” to find a solution that works for both parties become synonymous with “caving” (in)? Only when you take a perverse delight (one might even call it schadenfreude) in gloating, “I told you so”, when the Canadian government’s policy initiative (C-18, the Online News Act) runs into opposition from the giant internet platforms at which it is aimed. The Online News Act (ONA) requires the behemoth internet platforms Google and Facebook (Meta) to contribute financially to news media organizations when they use (make available) news content on their platforms. To no-one’s surprise (because it will cost them some money), Google and Meta don’t like the legislation and have pulled out all the stops to oppose it, as they did with similar legislation in Australia. This includes threatening to block Canadian news content on their platforms, including already taking preliminary steps to test blocking processes for a random selection of Canadian consumers.

A compromise involves making mutual concessions to reach an agreement between two parties. Caving (in) usually means abject surrender. It is clear that the current standoff between the government and the platforms will only be resolved through compromise on both sides, as I pointed out in a recent blog posting. (When the Irresistible Force of the Canadian Government Meets the Immovable Object of Meet and Google: What Happens Next for the Online News Act?).

To recall, for those who have not been following all the permutations of a government’s attempts to corral these two internet giants and encourage them to negotiate “fair compensation” for their use of news content produced by others, there are several possible outcomes. One is that the platforms fail to bargain with news providers in good faith, using their massive economic leverage to dictate terms. In that event, the legislation will be triggered and “final offer arbitration” will be invoked through the establishment of an arbitral panel. Under final offer arbitration, the panel (which will be selected by the two parties based on a roster provided by the CRTC) will select one of the two final offers put forward by the opposing parties. The intent of this process is to level the playing field between the internet giants and small media players, and encourage negotiation of balanced agreements, since absent good faith negotiations the ultimate step could be arbitration.

A second outcome is that the platforms and news media organizations reach agreements that both sides consider fair. That is what happened in Australia. This outcome is truly win-win and is the whole point of the legislation. The platforms have already reached agreements with some media organizations, although they are now threatening to terminate these agreements because they don’t like the way the Online News Act is framed, just as they did as part of their pressure tactics in Australia. (Google in Australia: Dangle the Carrot and then Yank it Away).

A third outcome, and the one that is currently being brandished by the platforms, is to comply with the ONA by opting out, that is, not using, or making available, any news content on their platforms. If they are not using news content, there is no legal obligation to pay for it. Since the Act only applies to “designated news intermediaries” (all of which are Canadian), the platforms can, in theory, comply with the Act by ensuring that consumers in Canada are unable to access Canadian news content. For example, when consumers search “Forest fire warnings” on Google, no Canadian news sources will come up. Canadians might be able to find some news on Google about forest fires in their region from US sources (although this is unlikely), but local news will be blocked, and the utility of the search engine will be compromised. What will consumers do? They will have to access another search engine, such as Bing, Yahoo or DuckDuckGo, or go directly to trusted news sources. These alternative search engines may not be the first choice of consumers, but they will produce the information needed, in the process familiarizing users with products other than those produced and controlled by Google. Moreover, by selectively blocking a range of search requests from users in just one (fairly large) country, Google will be compromising the algorithmic settings it uses to rank search requests. What a triumph for Google! It will have alienated a large consumer base, damaged both its reputation and technology, put the public potentially at risk and entered into headbutting with a G7 government that has various means to deal with recalcitrant companies (such as a Digital Services Tax, long under discussion). Why not find a solution that avoids all this? It is called “compromise”. Google and Meta need to compromise, just as the Canadian government needs to demonstrate some flexibility if both sides want to reach a win-win outcome.

Google has concerns about what they consider to be potential unlimited liability. They also want to be able to include in the calculation of compensation the agreements they have already reached with media organizations. They would like some assurances that if they bargain in good faith, they will be exempted from the application of the legislation. (They achieved the same outcome in Australia, earning de facto exemption because they were able to reach sufficient agreements with Australian media outlets). This strikes me as not unreasonable. In response, the government, in preparing for the drafting of regulations under the Act, has moved to clarify various issues through the recent release of a bulletin (The Online News Act: Next Steps). In this document, the Heritage Department clarifies that it will establish a threshold for contributions to the sustainability of the Canadian news marketplace, based on a platform’s estimated Canadian revenues, (i.e. no unlimited liability), reaffirm language already in the Act that non-monetary offerings to news organizations such as training be included and that existing agreements with news businesses can be included in the determination of fair compensation, and to clarify the definition of what constitutes a “significant portion” in terms of the number of agreements the platforms are required to reach with various categories of news organizations in order to gain an exemption. These are reasonable steps to address concerns expressed by the platforms, while maintaining the policy objectives of the legislation. For the record, this is called compromise, not caving.

As for Meta (Facebook and Instagram), judging by its confrontational rhetoric, this company may have decided that it is going to be an outlier, taking the news blocking route rather than being willing to compromise. Meta claims, correctly, that some news organizations post their own material to the platform and argues that it should not have to compensate news organizations when the post is at the initiative of the news organization doing the posting. This, however, is a red herring and has been seized upon by opponents of the legislation to try to discredit it. There is no provision in the legislation for compensation based on a specific number of links or clicks on links. Rather it is an overall process that takes into account the respective benefit enjoyed by news organizations from having their content on Facebook (and Google) and the offsetting benefit derived by the platforms from using news content to attract and retain viewers (thus increasing their exposure to online ads). If Facebook blocks users from posting news items, it will make itself a less valuable platform and forum for consumers. Ultimately there will be market consequences. Reaching reasonable agreements with news providers would be the logical way to proceed, but ultimately if Meta wants to shoot itself in the foot, it has the ability to do so. In Australia, after doing exactly that (Facebook in Australia—READY, FIRE, AIM), it decided that a wiser course of action would be to negotiate with news providers, thus avoiding designation under the Australian legislation.

I still believe there is time (around six months), the will (on the part of the government and possibly both platforms), and the means (drafting, consulting on and clarifying regulations) to reach a solution that will work for the platforms, the government and news media. Canada will not be the last country to try to ensure that the big platforms make a reasonable contribution to the news content that they freely use. The parlous state of journalism, one of the pillars of any functioning democracy, is a primary reason why several similar initiatives are taking place in various countries. The platforms would do well to come to an agreement with the Canadian government that they can live with–even though it means drawing on their resources to some extent beyond their present “voluntary” commitments–in order to show that reasonable compromise is possible. If the platforms get to “yes” under the Canadian legislation, they will not have “caved” any more than the Canadian government has caved; rather they will have found a way to meet their objectives (and maintain their business models) through dialogue and a dose of compromise. Wine with a little water in it is better than no wine at all, for both parties.

© Hugh Stephens, 2023. All Rights Reserved.

It seems that every day a new report emerges regarding concerns with artificial intelligence (AI) and how it will likely impact our lives. There have been dire suggestions that unless something is done, one day AI will take over, resulting in the end of humanity. There have equally been suggestions that, as with other technological advances in the past, AI will be accepted, normalized and incorporated into daily life. Society will adjust. Increasingly, however, there seems to be a recognition that there is an important role for government to play in creating the playing field on which AI will operate. In other words, establishing the rules of the game in order to control the worst excesses of unregulated AI.

A major question is how stringent those rules should be, and how to harmonize them between and among governments. Just as competition between companies is rapidly driving AI development, with some enterprises trying to gain competitive advantage by releasing AI applications early in the development phase while exerting very little control in the form of filters or limitations, equally there is a risk that among governments there will be a race-to-the-bottom as competing jurisdictions seek to present themselves as the most “innovation-friendly” in a bid to attract jobs and investment. The solution is likely some form of international regime to set minimum standards and ensure transparency. The situation today in some ways resembles the copyright free-for-all that existed in the 19^th century when it was every nation for itself. In the end, the benefits of universal standards and application were recognized, leading to the first international copyright convention, the Berne Convention of 1886. Since then, there have been many international agreements covering a wide range of fields, with international institutions growing out of the UN system.

Arguments have been made by AI industry leaders, like Sam Altman of OpenAI, for the creation of an international entity like the International Atomic Energy Agency (IAEA), to manage AI. (Others have argued that the IAEA model is not appropriate). Any form of internationally agreed regime is a far-reaching goal which, if it ever happens, will be preceded by more limited governance arrangements between leading creators and users of AI. Groups like the G7 and G20 have already issued statements on AI.  The G7 Leaders’ Statement issued at Hiroshima in May, included as one of its key objectives the intentions of the member states to “advance international discussions on inclusive artificial intelligence (AI) governance and interoperability to achieve our common vision and goal of trustworthy AI, in line with our shared democratic values.” To give effect to this, a working group will be established in cooperation with the OECD and the GPAI (Global Partnership on Artificial Intelligence) for discussions on AI before the end of 2023. These discussions could include topics such as “governance, safeguard of intellectual property rights including copy rights, promotion of transparency, response to foreign information manipulation, including disinformation, and responsible utilization of these technologies.”

The GPAI, referenced above, is a self-described “a multi-stakeholder initiative which aims to bridge the gap between theory and practice on AI by supporting cutting-edge research and applied activities on AI-related priorities”, comprising 28 member states plus the EU. There is no shortage of “talk-shops” to move toward some form of international regulation. When and to what extent these fora will succeed in producing some binding principles or rules remains to be seen. Until that happens much of the action will be at the national or regional level.

The EU is already taking a first step with the approval this month by the European Parliament of the AI Act, the first step in a long process to bring legislation controlling AI into force. It will need to clear the Trifecta process, meaning it needs to be approved not only by the European Parliament but also the Commission and EU Council, and there will likely be changes as it goes through the process. The current version incorporates not only controls on outputs but also deals with inputs, requiring firms to publish summaries of what copyrighted data is used to train their tools in order to address the issue of unrestrained scraping of websites containing copyrighted content.

Outputs and inputs are the two big issues, with most of the attention to date being focussed on the former. When it comes to controls on AI generated content, concerns have been expressed about AI’s potential to incorporate racial or gender-based bias into algorithms, or to spread misinformation or disinformation. It has also revolved around how AI is used in applications that could violate personal privacy, such as facial recognition technologies. These are all very legitimate concerns that are addressed in draft legislation being discussed in a number of countries, including the EU’s AI Act, but to date insufficient attention has been given to the questions of AI inputs. The EU Act is one of the first to specifically address this dimension.

(Canada’s Artificial Intelligence and Data Act, abbreviated as AIDA, is long on potential output problems but barely touches on the input question with the exception of a suggestion that AI systems should keep documentation regarding how requirements for design and development have been met and to provide documentation to users regarding datasets used).

The question of whether AI technology developers are free to help themselves to any and all data that they can access on the internet is far from settled. In the US, there are those who loudly proclaim that accessing data (including copyrighted and proprietary content) to feed AI algorithms is fair use, but that is a questionable assertion and remains to be decided legally. A number of countries have copyright exceptions for text and data mining (TDM) but there are a number of limitations in these cases, for example requiring that the output be used only for research and non-commercial activities. (Canada does not currently have a general TDM exception). Also to be taken into account is the fact that licensed databases for use in AI development are available in a number of content areas, such as publishing or news content, an argument for limiting the “help yourself” process currently being practiced. And then there is the issue of what data should be excluded, for example, personal health records.

One tool to manage the unlicensed content being used to feed AI machines is to require that tech companies maintain and publish transparent data on the material they have accessed, allowing rights-holders and individual citizens to identify whether and to what extent their content or personal data is being used without permission. While such information could be used to allow rights-holders to opt out of having their content accessed, the onus nonetheless should be on those taking the content to secure permission in advance. Even if a documentation requirement is implemented, a great deal of damage has already been done because existing AI models have already ingested vast quantities of content, almost all of it unauthorized.

While the EU is in the forefront, many jurisdictions are grappling with the AI issue. In Britain, the Sunak government is seeking to stake out a claim for the UK as a leader in AI regulation while making it a “go to” place for AI investment and development. Having “freed” itself from the “shackles” of EU membership, the UK wants to portray itself as a responsible middle ground between EU regulation and the still largely unregulated free-for-all that exists in the United States. (It’s not that Congress is not aware of the range of issues presented by AI. The question is whether anything is attainable in the current highly partisan political atmosphere.) Sunak has proclaimed that Britain will host a summit on AI regulation in the fall (focussed on safety), and has got the Biden Administration to agree to participate.

A coordinated approach among governments is essential to avoid the “weakest link” problem. The weakest link would be quickly exploited by some AI developers to gain an unfair advantage. This is already happening with respect to text and data mining (TDM) laws where some countries, Japan being one example, are being accused of throwing creators and rights-holders under the bus in the name of promoting innovation. (There is, however,  some question about how loose the Japanese TDM exception actually is). Singapore is another country where content concerns seem to play a very quiet second fiddle to the cacophony of tech interests. In the UK, initial misguided proposals to implement a limitless TDM exception, removing any possibility of licensing content for TDM purposes and in effect allowing expropriation of copyrighted content, were reversed after concerted pushback from the UK creative community.

It will not be easy for competing jurisdictions to hammer out a framework that will gain wide acceptance, particularly with the US, a global leader in innovation, being slow to the regulatory party. Developing nations with different governance models, like China, also need to be considered. China recently announced new measures to regulate generative AI and although the motivation is more to strengthen state control than to promote democratic values, according to the Carnegie Endowment for International Peace, “many of the regulation’s proposed measures map neatly onto the AI principles described in the consensus international AI policy instruments that are often sold as affirming democratic values, such as transparency, respect for individual rights, fairness, and privacy.” Perhaps that provides some hope for the achievement of an international agreement on use of AI, while allowing signatories a degree of flexibility in how the provisions are applied and interpreted. (After all, that flexibility is what allows many UN instruments to work today). What is clear is if there is to be an international agreement, while it may begin with “like-minded” states, eventually it will have to move beyond the usual suspects, especially to include countries where widescale AI development is likely to occur.

International regulation and agreement on common standards will not be an easy process. But the fact that so many international forums and national governments are seized of the issue is indicative of the recognition that now is the time to get ahead of the problem. So far, governments are playing catch-up, and that poses plenty of challenges. While individual jurisdictions will still jockey for advantage, there seems to be a growing acceptance that a series of regulatory silos is not going to serve national or global interests. How quickly that will be translated into concrete action is the big question. At the end of the day, some form of international coordination, if not regulation, is essential.

© Hugh Stephens, 2023. All Rights Reserved.

When an “irresistible force” meets an “immovable object”, the result is a classic paradox. That is, unless one of the two—or both—give way. If we assume the irresistible force is the Government of Canada in the form of Bill C-18, the Online News Act, and two giant internet platforms (Meta and Google) are the immovable object, then something has got to give. Right now, a massive game of “chicken” is underway between the two, as the Government of Canada has kept the irresistible force moving forward by rejecting amendments proposed by the platforms that would have significantly altered the implementation of the legislation. C-18 has been enacted into law– without the amendments. The platforms have responded by doubling down on their threats to block access by Canadians to Canadian news content on their services. They are carrying out blockages of news for some Canadian subscribers to “test the feasibility” of complying with the legislation by ceasing to use or link to news content, rather than entering into negotiations to compensate news outlets for using their content on their online services. Blocking news content would technically put them in compliance with the Online News Act although it would defeat the intent of the legislation, which is to establish a framework for commercial negotiations—bearing in mind the enormous and disproportionate market power of the internet giants– between Canadian news outlets and the platforms when the latter use (make available) news content to attract or retain viewers. 

Meta (Facebook and Instagram) has been the most strident stating on June 22, the day C-18 became law, “Today, we are confirming that news availability will be ended on Facebook and Instagram for all users in Canada prior to the Online News Act (Bill C-18) taking effect.” Google also noted its displeasure but indicated it would continue to have dialogue with the government in hopes of reaching an acceptable compromise. For his part, Heritage Minister Pablo Rodriguez, who is responsible for the legislation, has reiterated that he is open to discussion but will not give in to “threats”. While the Bill has passed Parliament and received royal assent, it will not come into effect until implementing regulations are drafted by the Canadian Radio-Television and Telecommunications Commission (CRTC), which will take about six months. This is where the paradox will likely be resolved.

Rodriguez has repeatedly referred to what happened in Australia, where a News Media Bargaining Code was created requiring major internet platforms (the same two, Google and Facebook) to reach content deals with Australian media, failing which the Australian Competition and Consumer Commission (ACCC) would oversee a process of binding arbitration. Google, which also faced and resolved similar demands in France, played hardball by trying to rouse Australian consumers against their own government by threatening to leave the Australian market. Facebook blacked out news feeds, a tactic that backfired. Australian ministers accused the companies of threats and blackmail, but in the end both platforms reached satisfactory agreements with Australian media, and both companies continue to operate Down Under. There are, however, some difference between the Australian situation in 2021 and the Canadian situation in 2023.

The first is that the platforms were able to avoid “designation” by the Australian authorities by coming to agreements with most Australian news outlets without being forced into government managed arbitration. This is important for the platforms who want to maintain that any agreements they reach are “voluntary”. In the case of the Canadian legislation, they are required to self-designate and if they do not–assuming they use news content–they will have to answer to the CRTC. The Commission could issue an exemption order if it was satisfied that the platforms had reached a sufficient number of voluntary and fair agreements, but Google and Meta want to keep the bargaining power in their hands. The Australian government blinked just a bit by allowing them to avoid designation. To this day, the News Media Bargaining Code has not been invoked for either company.

The other big difference is the economic position of both platforms which has changed somewhat since Australia brought in its legislation. Both are still extremely profitable, but both are facing some headwinds. In the case of Google, it is facing–for the first time in many years–some competition for its search engine as Microsoft launches AI-enabled search through Bing. For its part Meta, Facebook’s parent company, has just gone through two rounds of major layoffs, reducing its workforce by over 20,000 positions, and growth has slowed although Facebook continues to generate ad revenues well in excess of $100 billion.

Combined with some retrenchment and increased competition, the platforms are also facing the possibility that after Canada, other jurisdictions will come knocking at their door. Already there is draft legislation in California and at the federal level in the US, the Journalism Competition and Preservation Act, (JCPA) which would “allow news organizations to jointly negotiate fair compensation for access to their content by Google, Facebook, and other dominant platforms” has been re-introduced into Congress after almost passing last year. Whatever deal is struck in Canada, if there is one, will have an impact on how the platforms respond to US developments. (Meta has also threatened to pull its news content in California if that state law passes—but would they really take on California?).

So, where does that leave us with respect to our paradox and events in Canada? Will Pablo Rodriguez prove to be not entirely an “irresistible force” and/or will the platforms fall short of being totally “immovable”? While Rodriguez has received wide support from some parts of the Canadian media for the way he has handled C-18, the media does not all speak with one voice (as one would expect), resulting in some criticism of the minister. In particular, the Globe and Mail, which bills itself as Canada’s national daily, is a lukewarm supporter of the pro C-18 position taken by the news media’s industry association, News Media Canada. One of the Globe’s prominent columnists, Andrew Coyne, has taken particular delight in trashing the legislation. The fact that the Globe has reached a content deal with Google and Facebook is not immaterial.

Bell Media not coincidentally announced earlier this month that it was laying off 1300 journalists, closing six radio stations, eliminating all of its foreign bureaux but Washington, and consolidating news reporting, in effect gutting news coverage at most of its local TV and radio outlets. It attributed the cost-cutting measures to “unfavourable public policy and regulatory conditions that it can no longer wait out“, launching speculation that Bell had decided that there will be no funding coming from Google and Facebook. This week it was revealed that two of the other major press organizations, Postmedia, publisher of the National Post and Nordstar, publisher of the Toronto Star, are in merger talks. Rodriguez and the Trudeau government are under considerable pressure to deliver some relief for hard pressed news organizations as a result of C-18. What can Rodriguez do? The lever of pulling government advertising from the platforms is a thin reed. According to the Globe, the Canadian government spent just over $11 million on advertising on Meta last year. For a company whose ads sales top $100 billion, this amount is a rounding error. Spending on Google was even less at $8 million. More important for the platforms, however, is the reputational damage. It is not a good idea in the end to headbutt the government of a wealthy G7 country of 40 million. Not smart in the long run. Do the platforms really want to antagonize the people and government of Canada if there is a better way?

I have no crystal ball or inside sources, but my hunch is that this is not over. In fact, it’s never over ’til it’s over. (Did Yogi Berra really say that?) As much as Meta says there is nothing to negotiate, there is surely an elusive landing zone somewhere between the immovable object and the irresistible force, and both sides have around six months to find it. It’s not as if the Australian government refused to negotiate with the platforms. Australia did not back down from its overall objectives, but it agreed to modify the process, to the platform’s satisfaction. In drafting its regulations, the CRTC can surely find some wiggle room or ministerial discretion without amending the legislation. (Introducing amendments to water down the Act would open the government to charges of caving in to “US tech giants”). The estimated cash bonanza may be somewhat less than originally expected and perhaps not every news outlet in the country will benefit to the extent that they would like but at the end of the day, I believe it is still possible that a compromise will be reached allowing both the companies and the Government of Canada to claim victory. (Part of the problem in Canada is that in their zeal to be all-encompassing, Parliamentarians added amendments to widen the scope of those eligible for payments including campus and community radio stations that may not even produce news. This has weakened rather than strengthened the legislation).

The bottom line, however, is that the platforms derive value from news content, and they should be paying for it. Meta in particular has complained that it should not be required to pay news content providers for content that these same providers post to the Facebook platform. There is logic to this position. If one looks at just these transactions, it is illogical to expect payment for every post when the posts are being put up by the news organizations themselves. If that were the case, as David Common of the CBC observed when interviewing Mr. Rodriguez on this point, the CBC could simply hire staff whose sole job was to post news items to Facebook in order to claim compensation from Meta. Moreover, the news organizations themselves benefit from the exposure provided by Facebook. But no-one is arguing that the compensation be based entirely on these one-way transactions. It all has to do with commercial negotiations over what constitutes “fair compensation”, as laid out by the legislation. As I pointed out in an op-ed back in September of last year;

“Fair compensation negotiations will take into account the benefit that news publishers gain by posting links to the platforms. That benefit will be offset against the greater benefit the platforms gain by using news content to attract viewers and advertisers. That trade-off will normally be worked out during bilateral negotiations between the publishers and the platforms, with the government stepping in only if there is a failure to reach agreement.”

Engaging with news content encourages Facebook users to stay on the platform longer, which is what it is all about from Meta’s perspective, because this promotes greater exposure to ad content. That content had to be produced by someone. Meta (and Google) should not be getting a free ride. Exactly how much they should pay, however, is complex and is best determined through commercial negotiations, with the government (the CRTC) preferably staying very much in the background. It is in the interest of all parties to find the sweet spot. While playing “chicken” is one way to negotiate, it is a risky, high-stakes strategy. The sooner both sides get down to finding that sweet spot, the better it will be for all concerned—journalism, advertisers, social media platforms, search engines, government and most of all, consumers.

© Hugh Stephens, 2023. All Rights Reserved.

Update: This issue continues to evolve, almost daily. Since this blog was posted, Google has announced that it too will block news in Canada by removing links to Canadian news sites. Sites such as the New York Times, which maintains a news bureau in Canada, will also likely be blocked. Facebook, and now Google, have also served notice to those news sites with whom it has reached deals to provide financial support or compensation for news content, that it will terminate these arrangements. This is clearly an attempt to split the Canadian media and turn the “haves” (those who have already reached deals with the platforms) against the rest. If Google blocks Canadian news, it will be shooting itself in the foot as this will only encourage users to turn to alternative search engines, and is a dramatic escalation of the game of chicken that is being played. Pedro Rodriguez has called the platforms “deeply irresponsible” and “out of touch”. The outcome of this tussle is of enormous importance for the viability of responsible journalism in many countries.

Is this the final turn of the wheel? Stay tuned. Yogi Berra was right!

Whether the decision against Internet Archive in the U.S. will have a chilling effect on controlled digital lending practices in Canada remains to be seen.

Earlier this year, a U.S. district court ruled that San Francisco–based non-profit Internet Archive (IA) infringed the copyright of four international publishing houses when it loaned unlicensed digital copies of books online, a practice known as controlled digital lending (CDL). CDL is based on the premise that once a library has purchased a physical book it is free to make a digital copy of the work and loan that copy, provided the original work is removed from circulation. If two digital copies are loaned, there must be two books kept out of circulation by the library, a limitation called the “owned-to-loaned” ratio. Only one user may be given access to a single digital copy at any one time, and a separate digital copy is not loaned until the first one is “returned.” For publishers and authors, CDL amounts to blatant copyright infringement leading to the destruction of e-book markets and licensing. Many libraries see the issue differently, and the Canadian Federation of Library Associations has provided its members with guidelines for pursuing CDL. Until the recent U.S. decision, the CDL theory had not been tested in court.

Several arguments have been advanced to justify CDL, even though all concerned acknowledge that it requires making a full, unauthorized copy of the work. Its proponents argue they are simply bringing library lending into the digital age, and that digital lending is an extension of the first sale or exhaustion doctrine through other means (once a book has been purchased it can be loaned or resold multiple times without recourse to the original seller). This, and the fact that CDL is claimed to be a “transformative use” (along the lines of the Google Books online index case in the U.S.), constituted the essence of the fair-use defence presented by the Internet Archive. Transformative use is a U.S. legal concept under which use of a work is more likely to be considered fair if it adds something new, with a further purpose or different character, and does not substitute the original use of the work.

While the March decision has no direct applicability to Canada, and U.S. fair-use interpretations, while similar to Canada’s fair dealing laws, are not identical, had the decision gone the other way, it is very likely that CDL advocates in Canada would be citing the American precedent to argue for legality in Canada. The U.S. decision applies only to the practices of Internet Archive and is limited to the 127 works named in the suit (all of which are available in licensed e-book editions). The judge noted that Internet Archive remains free to scan and distribute all public domain works in its collection. The IA says it has digitized more than 675,000 unique texts from Canadian libraries. While it is not possible to know how many of these works are Canadian titles, a good proportion undoubtedly fall into this category. Likewise, it is impossible to know how many of these works are still protected by copyright. The fact that a book does not have a digital edition does not constitute grounds for making an unauthorized digital copy, although there is less likelihood of a legal challenge if an older, out-of-print but still copyright-protected work is digitized and loaned.

Part of the problem for CDL advocates is the way that Internet Archive made itself a ready target for publishers through some of its lending practices, including suspending the owned-to-loaned ratio for a few months, as well as questions relating to whether it can be considered a true library. Publishers are understandably reluctant to take legal action against bona fide libraries, yet there is no doubt that the CDL theory has been dealt a setback, if not legally undermined. The implications for Canadian libraries are still being assessed.

The Internet Archive established a Canadian branch in 2016, and since scanning began in Canada in 2004, it has worked with more than 250 Canadian institutions and libraries. Almost 80 Canadian schools, universities, and government entities are listed as partner libraries and have contributed part or all of their collections for digitization. CDL’s supporters claim that if CDL is not legal in Canada, it should be. As several Canadian librarians have argued in a recent paper in the Canadian Journal of Library Practice and Research, “CDL offers the opportunity for libraries to continue to meet their mandates of providing free and equitable access to knowledge in the digital environment.”

Jonathan Bengtson, chief librarian of the University of Victoria Library, says that while his university does not engage in CDL and has no immediate plans to do so, they will continue to work with the Internet Archive. CDL is only one aspect of Internet Archive’s work; their other projects include providing open access to a wide range of materials, notably the Wayback Machine, which allows users to see how specific websites appeared in the past. Susan Haigh, executive director of the Canadian Association of Research Libraries (CARL), believes the decision won’t change much in Canada in the immediate term. CDL has its limitations, and the use of CDL by CARL members within the Canadian legal framework has been “cautious,” she says. Nonetheless, Canadian libraries that have contributed their collections to the IA for digitization are indirectly supporting CDL by allowing their holdings to increase the number of physical copies on which the Archive bases its owned-to-loaned ratio. Canadian works sold in the U.S., including those with e-editions, will continue to be vulnerable to the IA’s CDL practices. At the same time, publishers in the U.S. feel vindicated by the decision, since their right to control the exploitation of works to which they hold the rights has been upheld in accordance with well-established U.S. legal principles. These same basic principles of copyright law exist in Canada.

Whether the decision against Internet Archive in the U.S. will have a chilling effect on CDL practices in Canada remains to be seen. Legally acquiring licences is still the best ethical and legal strategy to avoid unnecessary risk, while limiting digital scanning to out-of-print books used for research, thus avoiding direct competition with the marketplace. At the same time, publishers need to continue to work to make e-books as accessible as possible by licensing to libraries on terms that are not unduly restrictive in terms of distribution or cost.

This blog post first appeared as an Opinion piece published in Quill and Quire on June 7, at https://quillandquire.com/omni-category/opinion/

© Hugh Stephens, 2023