Canada’s Online News Act received royal assent but is not yet law, though it is already stirring up controversy with Google and Meta saying news will no longer be available to Canadians on their platforms.
Meta and Google have been in the news lately in response to Canada’s Online News Act receiving royal assent on June 22, 2023. The Act is not yet in force, but it is stirring up a lot of controversy. Perhaps you’ve seen the notice on Facebook from Facebook Public Affairs saying users will no longer be able to share news online?
The Online News Act will come into force as law by an Order in Council. The Act gives a 180-day period for this to happen. It says any section not yet in force at the end of the 180 days will automatically come into force at the end of this period.
So, what exactly is the Online News Act and why the big fuss?
What is the Online News Act?
Section 4 of the Act articulates its purpose:
The purpose of this Act is to regulate digital news intermediaries with a view to enhancing fairness in the Canadian digital news marketplace and contributing to its sustainability, including the sustainability of news businesses in Canada, in both the non-profit and for-profits sectors, including independent local ones.
In short, the goal is to sustain the news business in Canada by regulating digital news intermediaries. Operators of digital news intermediaries will pay news businesses for making news content available to online users.
Before we dig deeper, let’s look at a few definitions in the Act:
- Digital news intermediaries are online communications platforms, including search engines or social media services. For example, Google and Facebook. They make the news content produced by news outlets available to people in Canada. Online communications platforms that allow people to communicate privately with each other, such as Messenger, are not digital news intermediaries.
- Operators are individuals or organizations that operate a digital news intermediary. For example, Meta, which operates Facebook, Instagram, Threads, etc.
- News outlets are undertakings or distinct parts of an undertaking whose primary purpose is to produce news content. For example, CBC Edmonton or a local newspaper is a news outlet. They also include Indigenous news outlets and official language minority community news outlets.
- News businesses are individuals or organizations that operate news outlets. For example, Corus Entertainment, which operates Global News and more.
The Act does not apply to broadcasting activities or telecommunications service providers.
How does the Online News Act work?
The Canadian Radio-television and Telecommunications Commission (the CRTC) will administer the Act. It will regulate the relationships between operators and news businesses.
If the Act applies to its digital news intermediaries, operators must notify the CRTC. The CRTC in turn will keep a list of digital news intermediaries that fall under the Act. This list will be publicly available on the CRTC’s website.
The Act allows a news business to initiate a bargaining process with an operator. The goal of this process is for the two parties to reach an agreement whereby the operator will pay the news business for news content shared on its platform. The Act creates a duty to bargain for operators. It also describes a general bargaining process, though any regulations under the Act will presumably set out a more detailed process. The CRTC will also create a Code of Conduct for the bargaining process.
Rather than going through the bargaining process, an operator and news business can make an agreement between themselves. The operator can then apply to the CRTC for an exemption order. This order exempts the operator from the bargaining process and is good for 5 years.
When deciding whether to grant an exemption order, the CRTC will review the agreement to make sure it complies with factors set out in section 11 of the Act. Among other things, the CRTC is looking to make sure that the agreement provides for fair compensation to the news business, and that the new business will use an “appropriate portion” of the compensation to support the production of local, regional and national news content.
What’s the big fuss?
Right now, digital news intermediaries share news content on their platforms without compensating news outlets. For example, CTV Edmonton may have a Facebook page where they post current articles. Facebook users can also freely share those articles on their accounts.
Meta published the opening statement that its President of Global Affairs, Nick Clegg, planned to make at a hearing of Canada’s Heritage Committee. According to the statement, Meta’s position is that the Act is “based on a fundamentally flawed premise”:
Meta does not benefit unfairly from people sharing links to news content on our platform. The reverse is true. Publishers choose to share their content because it benefits them to do so, whereas it isn’t particularly valuable to us at all.
Meta further asserts that news publishers in Canada received an estimated 1.9 billion clicks from April 2021 to April 2022. They argue this is free advertising estimated to be “worth more than $230 million”. Meta has been clear that it will “end the availability of news content in Canada” if the legislation comes into force.
Google has also published several blog posts on its website about Bill C-18.
A similar scheme exists in Australia. Its news media bargaining code “is a mandatory code of conduct which governs commercial relationships between Australian news businesses and ‘designated’ digital platforms who benefit from a significant bargaining power imbalance.” It came into force in 2021. However, Meta argues Canada’s Act goes further in that it makes Canada “the first democracy to put a price on free links to web pages, which flies in the face of global norms on copyright principles and puts at risk the free flow of information online.”
The Government of Canada published a backgrounder to the legislation on its website on July 10, 2023. Next steps involve drafting regulations and public consultation on those draft regulations. With less than 180 days to go before the Act becomes law and so much controversy already, the question is … what will happen in the meantime?
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DISCLAIMER The information in this article was correct at time of publishing. The law may have changed since then. The views expressed in this article are those of the author and do not necessarily reflect the views of LawNow or the Centre for Public Legal Education Alberta.
About Jessica Steingard
