Canadian government to introduce law compelling big tech to pay for news

Canada’s federal government introduced a law on Tuesday to mandate tech giants to pay news publishers for using their content on their various platforms.

The Online News Act, or House of Commons bill C-18, would oblige ubiquitous technology companies such as Google and Facebook, as well as other online platforms that reproduce or share news content, to compensate those news agencies or go through arbitration led by the Canadian Radio-television and Telecommunications Commission (CRTC). Companies such as Facebook, Google, and other digital platforms that have “a bargaining imbalance with news organizations” would be required to enter into “fair commercial agreements” with newspapers, news magazines, online news organizations, private and public broadcasters, and non-Canadian news media that meet certain criteria.

These content providers will now be empowered to enter into agreements with large technology companies without any government intervention.

According to a primer distributed to reporters, the compensation to be paid by these tech giants must be used to finance the creation of news content to ensure the “survival of the Canadian news ecosystem.”

News agencies have been particularly affected by the dominance of companies such as Facebook and Google, which have swallowed up more than 80 per cent of online ad revenue in Canada. Ad revenue is the lifeblood of news agencies, and with the technology giants accounting for the lion’s share of revenue, other news agencies are weakened, especially now that classified ads and print subscriptions are no longer sellable.

Culture minister Pablo Rodriguez said Canada’s news agencies should be adequately compensated for helping Google and Facebook attract more users.

Google and Facebook use news content on their sites “without really having to pay for it. With this bill, we’re seeking to address that market imbalance,” Rodriguez said.

Rodriguez also said that the companies have been informed of the legislation and that both are reviewing the proposed law. They have committed to investing US$1 billion each over three years to fund journalistic efforts worldwide.

Canada is adapting the Australian model to keep Big Tech in check. Australia is the first country that has effectively forced Big Tech to pay for the use of third-party news content.

News Media Canada chairman and vice president of Brunswick News, a New Brunswick-based newspaper chain, Jamie Irving, welcomed the development, saying the law would “level the playing field and give Canada’s news publishers a fair shot and doesn’t require additional taxpayer funds.”

However, several sectors have criticized the proposed legislation, saying it undermines press freedom and will make more news agencies dependent on CRTC-brokered deals with big technology companies.

“This represents nothing less than a government-backed shakedown that runs the risk of undermining press independence, increasing reliance on big tech, and hurting competition and investment in Canadian media,” said Michael Geist, a Canada research chair in internet and e-commerce law at the University of Ottawa.

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Jim Love, Chief Content Officer, IT World Canada

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