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Ottawa prepares to squeeze large US tech companies over lost revenue for Canadian news agencies

Proponents of the Canadian news media sector have hailed the federal government’s clearest pledge yet to press web giants for compensation. However, there is evidence that this will be a long and difficult process.

Big US tech companies like Facebook and Google have long been accused of pulling advertising revenue from Canada’s struggling news organizations without paying the outlets for their copyrighted content.

In its speech from the throne on Wednesday, the Liberal government put it this way: “Web giants are taking Canadians’ money and enforcing their own priorities.”

In Governor General Julie Payette’s speech, the government vowed, “Things must and will change.”

Canada’s Minister of Cultural Heritage, Steven Guilbeault, has been signaling his intention to take over the Silicon Valley company for months. However, given the COVID-19 pandemic and an economic crisis, there was no guarantee that this would remain a legislative priority.

Bob Cox, editor of the Winnipeg Free Press, said after the speech that he was encouraged by the government embassy.

Some news outlets in Canada benefited from Ottawa’s wage subsidy program during the pandemic, as well as a tax credit-based bailout, but the loss of revenue for web giants is seen as a longer-term threat. Friends of the Canadian Broadcasting Company estimate the downsizing in journalism has topped 3,000 since the COVID-19 strike. (Adrian Wyld / The Canadian Press)

“We have had the feeling for a long time that we are contributing a lot to these platforms and not getting anything in return,” he told CBC News in an earlier interview. “Because we are in this essentially powerless position, we ask the government to intervene.”

His newspaper is one of myriad media organizations across the country at risk from a persistent loss of advertising revenue, compounded by the pandemic.

A report by the Canadian Journalists’ Association at the end of April showed that 50 branches had recently closed and 78 employees had been cut, resulting in a loss of 2,053 jobs.

Friends of Canadian Broadcasting, an advocacy group, now estimates that the downsizing in journalism since the onset of COVID-19 early in the year has exceeded 3,000.

Some news outlets benefited from Ottawa’s wage subsidy program during the pandemic – and previously from a tax-credit-based media bailout – but the loss of revenue for web giants is seen as a longer-term threat.

“This is a six-alarm fire and the government must act immediately – this Parliament – to impose the rule of law on these Silicon Valley giants who are crumbling our industries,” said Daniel Bernhard, executive director of Friends of Canadian Broadcasting .

Cox and Catherine Tait, President and CEO of CBC / Radio-Canada, were among the Canadian media managers who signed a joint letter to all federal party leaders in February calling for fairer competition, copyright and tax rules for online content.

Now comes brass nails. We look forward to specific guidelines from @ JustinTrudeau to 1) ensure tech companies pay their fair share of taxes and 2) are held responsible for the hateful and illegal content they post 3) support Canadian public and private media 2/3

– @ friendscb

Media, technology companies have complicated relationships

Guilbeault has been working on a plan to remove the imbalance between Canadian news organizations and the web giants. Currently, platforms like Facebook and Google can exchange headlines and clippings of news articles without directly compensating the outlets.

In addition, the technology companies sell advertisements for content that they did not create.

It’s a complicated relationship, however. Local and national media also rely on web traffic controlled by search engines and social media platforms – some of the most visited websites by Canadians.

In a blog post on Thursday, Google underlined that “Canadians are sent to news sites for free millions of times a day”.

“Helping journalism survive and thrive is of the utmost importance to us,” said the company.

CLOCK | Regulations for tech giants to “pay their fair share,” says the minister:

Cultural Heritage Minister Steven Guilbeault tells CBC’s Thomas Daigle of a plan to get digital giants to compensate Canadian media. 1:49

However, the Minister of Cultural Heritage had a warning for such companies.

“The days when the [tech] Companies could decide almost anything … are over, “Guilbeault said in a recent interview.

While legislation could come as early as fall this year, few details are known about how the government plans to address the issue.

The Speech from the Throne provided this vague hint: “The government will act to ensure this [web companies’] The income is shared more fairly with our makers and the media. “The speech also alluded to the fight against” avoidance of corporate taxes by digital giants “.

Guilbeault admitted that he was facing “an uphill battle”. Experience abroad confirms this.

Experiences in other countries offer lessons

In France, Google refused to comply with a 2019 European Union directive to pay for the use of news clippings. Instead, the platform removed article excerpts from search results and left only the links.

The matter was hardly resolved. At the beginning of this year, the French competition authority ordered that Google should return to the negotiating table.

Michael Geist, a law professor at the University of Ottawa, said he also doesn’t expect Facebook to work together easily.

University of Ottawa law professor Michael Geist points to Australia, which released a draft code this summer containing quick reprimands from Google and Facebook, in anticipation of the battle brewing with tech giants in Canada. (Guillaume Lafrenière / CBC)

“The risk if we focus on licensing links is that messages for Canadians will disappear from social media services,” he warned overall.

Geist pointed out Australia, which has a population about two-thirds the size of Canada and may offer the best preview of the battle brewing here.

A draft code published by the Australian Competition and Consumer Commission in the summer was rebuked by both Google and Facebook. The plan would allow news publishers to negotiate compensation with the tech companies if their content is republished.

In response, Facebook “reluctantly” threatened to ban the sharing of news articles on its platforms in Australia. Critics pointed out that it is still possible to post false stories.

For its part, Google said the Australian strategy had “endangered” the search engine and sister platform YouTube.

We answer your questions about how a new regulation could affect you. #AFairCode. Thread ↓ (1/5) pic.twitter.com/vLTUWs0CdN

– @ googledownunder

“I think the idea is right – there has to be some kind of fair exchange,” but identifying the right process is challenging, said Andrea Carson, associate professor at the Department of Politics, Media and Philosophy at La Trobe University in Melbourne. Australia, which received a scholarship from Facebook to research misinformation online.

“I’m not sure if any country has any best practices in place at this point.”

Guilbeault has monitored such efforts overseas and expected other governments to follow suit soon.

“When it’s two, three, four, five [countries]I think it will be impossible for Facebook to boycott everyone, “he said.

Platforms like Facebook and Google can exchange headlines and snippets of news articles without directly compensating the Canadian news agencies. The technology companies can also sell advertisements for the content that they did not create. (Jeff Chiu / The Associated Press)

A statement released by Facebook on Thursday did not directly address the issue of compensation to news organizations in that country. “We welcome new rules for the Internet that support innovation, free speech and the digital economy,” a company spokesman said in an email.

A representative from Google Canada said the company looks forward to continuing to work with the company [Department of Canadian Heritage] Explore new ways to support Canada’s creative and media ecosystem. “

Guilbeault is working on requirements for streaming services to contribute more to Canadian content as well. Regulations are also in the works for social media companies to address harmful content – for example, getting rid of hate speech faster or inciting violence in any way.

“We’ve worked hard over the decades to have a safe Canada in the real world, and that’s what we’re trying to translate onto the Internet,” said Guilbeault. “At the moment, one could argue that this is not really the case.”

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