[Bill C-18] regulates digital news intermediaries to enhance fairness in the Canadian digital news marketplace and contribute to its sustainability. It establishes a framework through which digital news intermediary operators and news businesses may enter into agreements respecting news content that is made available by digital news intermediaries. The framework takes into account principles of freedom of expression and journalistic independence.
— Parliament of Canada
David vs. Goliath
Google, Apple, Facebook and Amazon (GAFA), often called the web giants or tech giants, have built a content sharing environment that has revolutionized the world of communications and online advertising.
At the same time, this altered media reality has siphoned advertising revenue away from traditional media outlets.
In fact, the web giants have been accused of anti-competitive practices and have been taken to court, investigated and even sanctioned by market regulators and governments.
Countries such as France and Australia have taken action and are trying to impose a regulatory framework that will require digital platforms to fairly compensate media companies, newspapers and magazines for their news production.
In Canada, GAFA's advertising revenues from print media content are estimated to be between $200 million and $600 million per year, with most of that money diverted to the U.S.
Reality here at home
The backdrop to this story is that many newspapers in Quebec have shut down their operations in recent years due to factors such as dwindling advertising revenue, thereby putting many journalism professionals out of work.
In an open letter in February 2021, a broad spectrum of Quebec publishers (La Presse, Journal de Montréal, Journal de Québec and news coops such as Le Droit, Le Nouvelliste, Le Soleil, Le Quotidien, La Tribune and La Voix de l’Est) called out the government for not taking action.
Australia forging ahead
Was it Australia’s initiative that motivated Ottawa to go forward with this new bill?
In 2021, Australia passed landmark legislation requiring digital platforms to compensate the media organizations whose content they carry. Since then, a number of major Australian media groups such as NewsCorp, which is part of Rupert Murdoch's empire, have signed agreements with Facebook and Google for amounts estimated at tens of millions of Australian dollars.
However, the Australian legislation leaves GAFA with plenty of leeway. The system of negotiation by mutual agreement, rather than a binding scale, allows them to set the compensation amounts themselves and choose which media organizations they want to deal with.
It’s considered a major step forward, nonetheless.
European Copyright Directive
While the Australians were requiring GAFA to financially compensate media outlets, in 2021 the European Union adopted a directive extending the concept of neighbouring rights to news publishers.
Implemented as legislation first by France then by other member states, these rules have enabled various European news agencies and publications to sign flat-rate agreements with Google and Facebook for the use of their content.
- • See also: What are neighbouring rights?
What’s happening in Canada?
On April 5, 2022, the federal government introduced legislation that, if passed, will force digital platforms like Facebook to enter into "fair" compensation agreements with newsrooms to indemnify them for advertising revenue earned from sharing their news content.
“Thanks to this legislation, the web giants will be held accountable,” stated Pablo Rodriguez, Canadian Heritage Minister, at a press conference to present the much-anticipated Bill C-18.
— Translated from Radio-Canada
Shared news content generates massive revenues for social media operators. Meanwhile, Canadian Heritage estimates that 450 news outlets were forced to shut down between 2008 and 2021.
Bill C-18 introduced by Pablo Rodriguez sets up a framework for rebalancing the bargaining power between the so-called web giants and the news media organizations.
According to the minister, if the legislation’s impact here is comparable to what took place in Australia, the amounts paid to Canadian news outlets could be somewhere between $150 million and $200 million.
The platforms subject to Bill C-18 will have six months after its adoption to reach voluntary agreements with media organizations and demonstrate to the Canadian Radio-television and Telecommunications Commission (CRTC) that those agreements are satisfactory.
Among other things, Bill C-18 is intended to ensure that the agreements provide “fair compensation” to news businesses and help ensure the “sustainability of independent local news businesses.”
— Department of Canadian Heritage
Sustainability for smaller media outlets promotes the diversity of news sources and press freedom, which is fundamental to our democracy.
Once the bill receives royal assent, the Governor in Council will issue regulations specifying the Online News Act’s scope of application and exemption criteria.
The CRTC will determine the measures and procedures for implementing the Act, including the negotiation process and the designation process for news businesses.
Throughout that timeframe, the digital platforms and the news organizations will be able to negotiate commercial agreements outside the legislative framework.
But it could be a long wait: the legislation is scheduled to come into force on January 1, 2024.