Human rights protest, USA - unknown date, (CC0 1.0) https://www.rawpixel.com/image/6111479/human-rights-protest-usa-unknown-date

Human rights protest, USA - unknown date, (CC0 1.0) https://www.rawpixel.com/image/6111479/human-rights-protest-usa-unknown-date

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Shakedown Complete: The Story Behind Bill C-18’s Shameful Legislative Review Process and the Race to Mandate Payment for Links

Later today, the House of Commons will vote to approve Bill C-18, the Online News Act, sending it to the Senate just prior to breaking for the holidays. While Canadian Heritage Minister Pablo Rodriguez and media lobbyists will no doubt celebrate the milestone, it should not go unremarked that the legislative process for this bill has been an utter embarrassment with an already bad bill made far worse. The government cut off debate at second reading, actively excluded dozens of potential witnesses, expanded the bill to hundreds of broadcasters that may not even produce news, denigrated online news services as “not real news”, and shrugged off violations of international copyright law. All the while, it acknowledged that mandated payments for links are the foundation of the bill with officials stating that individual Facebook posts accompanied by a link to a news story would be caught by the law. As for the purported financial benefits, the government’s own estimates are less than half those of the Parliamentary Budget Officer, who also concluded that more than 75% of the revenues will go to broadcasters such as Bell, Rogers, and the CBC. The end result is a bill that will undermine competition and pose a threat to freedom of expression, while potentially leading Facebook to block news sharing in Canada and Google to cancel dozens of existing agreements with Canadian news outlets.

As I’ve chronicled for months, Bill C-18 is the product of an intense lobbying campaign from some of Canada’s largest media companies. While the Globe and Mail broke from the pack at the last minute, years of one-sided editorials – even devoting full front pages to the issue – had its effect. Indeed, Canadian newspapers would be exhibit #1 for how government intervention in the media space has a direct impact on an independent press. From the moment of its introduction, the consequences were immediately obvious as payments for links serves as the foundation for a law that treats “facilitating access to news” as compensable. Canadians can be forgiven for thinking the bill is about compensating for reproduction of news stories. It is not, since the platforms don’t do that. Instead, it is about requiring payments for links, indexing or otherwise directing traffic to the news organizations who are often the source of the link itself. In most circumstances, recipients pay for the benefits that come from referral traffic. With Bill C-18, the entities providing the referrals pay for doing so.

Further, the bill is about far more than struggling Canadian newspapers as it expands eligibility into broadcasters such as the CBC, foreign news outlets such as the New York Times, and hundreds of broadcasters licensed by the CRTC that are not even required to produce news. The end goal is negotiated payments for links, backed by the threat of a one-sided arbitration process overseen by the CRTC in which the arbitration panel can simply reject offers if it believes it fails to meet the government’s policy objectives. That isn’t a commercial deal, it is a shakedown.

Any hope that the bill would get a rigorous review at the Standing Committee on Canadian Heritage were quickly dashed. The committee initially scheduled just four hearings – eight hours – to review a complicated bill with multiple stakeholders. While I was pleased to appear (twice as it turned out), the government largely relied on non-Canadian critics of tech companies, inviting few independent Canadian experts or independent media companies. Independent and digital media companies were concerned with the bill as many feared being excluded altogether, yet were scarcely given an opportunity to appear. Rodriguez did show up, though much of the time was devoted to questions focused on Canadian Heritage funding an anti-semite as part of an anti-hate program since he had previously refused to answer questions on that issue before committee. Moreover, Rodriguez opened his statement by deceptively citing data that over 400 news outlets had closed since 2008, but neglected to mention that the same study had found that hundreds of new news outlets had opened during the same period. Faced with mounting concern from small and independent news outlets, Rodriguez simply claimed that smaller news outlets were less interested in the bill.

Despite a long list of excluded stakeholders (including Facebook), Liberal MPs quickly indicated that they had heard enough. In fact, it was only after Facebook warned that it was considering blocking news sharing in response to the bill, that the government agreed to add several additional meetings. The most notable development during the hearings did not happen in the committee room, but rather was the release of the Parliamentary Budget Officer study on the bill and its estimate of $329 million in new revenues. While the government embraced the initial estimate, soon after the PBO quietly revealed that more than 75% of the revenues would go to broadcasters such as Bell, Rogers, and the CBC. The committee never called the PBO to appear nor did the government reveal its own estimates. Those came weeks later during the clause-by-clause review, when officials admitted that their best guess was $150 million, or less than half of the PBO figure. Assuming the same 75/25 breakdown between broadcasters and newspaper outlets, that would leave about $37 million to split among hundreds of news outlets with Postmedia and Torstar taking the lion share of the revenues.

Once the clause-by-clause review began, the bill went from bad to worse. Notable developments included:

  • The government explicitly admitting that the bill treats as compensable user posts on Facebook involving news content that includes a link to the source article.
  • The government rejecting concerns that provisions restricting the applicability of copyright limitations and exceptions such as fair dealing violate Canada’s obligations under the Berne Convention that mandate rights of quotation.
  • The government rejecting amendments to remove payment for links, arguing that such an approach would create a “loophole” in the bill.
  • The government expanding the criteria of “eligible news outlet” by adding community, campus and indigenous broadcasters, who qualify based on a CRTC licence, rather than any external review or news production criteria. In fact, these broadcasters – which number in the hundreds – may not even be required to produce news.
  • The government rejecting proposals to expand eligibility to outlets with a single journalist, thereby excluding some smaller community entities.
  • The government removing any guardrails on inclusion of the CBC within the framework, thereby undermining the public interest mandate of the public broadcaster.
  • Liberal MP Lisa Hepfner saying the quiet part out loud by claiming that online news outlets weren’t news. After apologizing, Hepfner never spoke up again at committee.
  • The escalation of trade tensions as the U.S. raised concerns with potential discrimination against U.S. entities in the bill.
  • After criticizing tech companies for not disclosing the details of existing agreements with media companies, government MPs rejected a proposal to require greater transparency by acknowledging that “this is private information between two private organizations.”

Despite all of these issues, Bill C-18 will pass with support of the NDP and Bloc. The bill will head to the Standing Senate Committee on Transportation and Communications, where, with multiple former journalists (Senators Wallin, Simons, Miville-Duchêne among them), the committee can be expected to give the bill a more extensive review. Even with that review, the die is cast as the government will pass this legislation. When it does, it will leave the CRTC enmeshed in years of hearings, Facebook potentially following through on blocking news sharing, and Google walking away from dozens of agreements. Meanwhile, the expected big payday won’t arrive for most, with less dollars shared with far more demanding outlets. And yet for all that, there is a serious price to be paid in frayed trade relationships, the harms that come from government interference in media, and the setback for the free flow of information and expression that arise from government putting a price tag on sharing information online through the simple act of providing a link.

10 Comments

  1. After Bills C11 and C18 why should anyone trust this government? It’s clear they value the interests of media organizations over the interests of Canadians. Worse yet, they then try to justify their actions with xenophobic arguments about protecting Canadian culture, and by defaming critics of the Bills.

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  3. Nearly a decade ago, I started building Freezenet with a very different plan than most. A good portion of building it up was based on the idea that, one day, the URL for my website might get banned from social news websites and social media platforms. It was the goal that the website could one day stand on its own without the help of the likes of Facebook and Twitter. What I would never have known at the time was that this might have actually been an absolutely brilliant idea for very wrong reasons.

    My suspicion was that a few larger players in my field would see me as finally being in a moment of weakness and that it would be an opportunity to finish me off and potentially scare me off of writing news entirely should I choose to depend on social media for the main source of traffic. However, as Bill C-18 clears more hurdles, it has become clear that all of this prep work was actually a very viable defence against Facebook potentially following through with their threat of banning all links to news sources in Canada. My site would be almost completely immune to those negative impacts (whittling the negative impacts down to nothing more than a rounding error), allowing me to continue on this effort as many other online operations stand to suffer greatly.

    This debate and knowing the situation I’ve built up has been complete insanity to me.

  4. Pingback: Liberals halt debate on online news law C-18, send it to the Senate | True North

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