Question Period Note: News Publisher Remuneration

The Speech from the Throne, delivered on September 23, 2020, reiterated plans to ensure that revenues of online platforms is shared more fairly with Canadian creators and media. On October 22, 2020, News Media Canada released a report on the Sustainability of Journalism in Canada. It underlines the importance of credible news to a democracy, details the deteriorating state of the news sector in Canada and recommends that Canada pursue a model similar to Australia, putting in place a framework that would allow news media organizations to collectively bargain with online platforms. A number of news articles have made reference to the findings of the report, underlining the estimates that news publishers could recover $620 million in annual revenues.

• A healthy news sector is central to any democracy. As outlined in the recent Speech from the Throne, we intend to ensure that the revenue of online platforms is shared more fairly with Canadian creators and media.
• We are aware of and monitoring the developments in France and Australia and are looking at options here in Canada.
• This work is part of a bigger commitment to put in place a regulatory framework where digital platforms contribute their fair share.

• It is estimated that Canada has an online advertising market of $8.8 billion. Advertising is a chief source of revenue for Canadian media organizations. Since 2008, the newspaper industry has experienced a significant drop in overall revenue from $5.5 billion in 2008 down to $2.7 billion in 2018, which represents a 51 percent revenue reduction in the last 10 years. Advertising revenues are migrating towards the major online platforms known as GAFA (Google, Apple, Facebook and Amazon).
• The current COVID-19 crisis has exacerbated the already-difficult financial situation of media organizations. Preliminary estimates suggest a decrease of approximately 50 percent in advertising revenues in the first three months of the crisis alone; which represents an industry-wide reduction of $375 million for newspapers. As a result of COVID-19, there have been 50 community newspapers that have ceased operations and more than 2,000 job cuts. It is not yet known how long the COVID-19 pandemic will continue and what the long-term impacts on advertising in Canadian media will be.
• Members of News Media Canada argue that digital platforms, primarily Google and Facebook, have had a disruptive effect on market competition and have exploited regulatory gaps to shift the balance of influence and power in their favour. The publishers call on Canada to follow the example of Australia, putting in place a framework that would allow news media organizations to collectively bargain with online platforms.
Calls for Action
• In the course of the recently completed (2019) statutory review of the Copyright Act, the INDU Committee called for a study to investigate several issues going to the sharing of journalism online, including the remuneration of journalists, revenues of press publishers, and competition in online markets (Recommendation 15).
• Recommendations from the Broadcasting and Telecommunications Review Panel Report (January 2020), included levies on certain broadcasting undertakings to contribute to the production of news content (Recommendation 71), and regulation of the relationship between social media platforms that share news content and news content creators (Recommendation 72).
• Encouraged by the developments in France and Australia, major Canadian news publishers and Friends of Canadian Broadcasting have called on the Government to implement similar measures.
Australia Mandatory Code
• On April 20, 2020, the Government of Australia issued a press release stating that it is accelerating its response to the Digital Platforms Inquiry report due to the COVID-19 pandemic and the resulting financial pressure on the Australia news media industry. It asked the Australian Competition and Consumer Commission (ACCC), the country’s independent competition authority, to develop a mandatory code between digital platforms and media businesses that will address the power imbalance over advertising revenues. The mandatory code would also include transparency provisions on matters such as the ranking and display of news content through algorithmic recommendations.
• On July 31, 2020, the ACCC released a draft code for public consultation and a series of questions and answers about the draft code. The consultation process closed on August 28, 2020. Officials are considering submissions before final legislation is introduced in the Australian Parliament.
• A number of media reports quoted a Facebook spokesperson saying that Facebook was “disappointed” by the Australian Government’s announcement, indicating that it had invested “millions of dollars” to support Australian publishers through content arrangements, partnerships, and training. Facebook also stated that COVID-19 has impacted every business and industry across the country, including publishers, which is why it announced a new, global investment to support news organizations at a time when advertising revenue is declining, referring to the $100 million Facebook has pledged to invest in the news industry. Facebook has threatened to no longer allow users to share news on its platforms if the Australian Government follows through with the code.
• A Google spokesperson also said that Google has been working since February with more than 25 Australian publishers for input on a voluntary code of conduct under the ACCC’s timeline. Google also said it sought to work constructively with industry, the ACCC and the government to develop a voluntary code of conduct, and will continue to do so in the revised process set out for a mandatory code. Google has launched a campaign of pop-ups and open letters criticizing the government’s approach, which is aimed at users.
French Competition Authority’s Decision Requiring Compensation for Uses of Digital News Snippets
• In July 2019, France transposed a “neighbouring right” for press publishers into its domestic law, as provided for by the recent European Copyright Directive (the Directive). This neighbouring right creates an obligation for news aggregators to compensate press publishers for use of snippets of their works online. In April 2020, France’s competition authority issued an interim order enjoining Google to negotiate in good faith with press publishers over payments for use of copyright protected content on its news, search and discovery pages – including retroactive payments going back to the introduction of the law.
• In Canada there is currently no comparable right in “snippets” of journalistic works shared online under the Copyright Act, and therefore no basis for the kind of claim of anti-competitive behaviour at issue here. For several years stakeholders have called for copyright solutions to foster remuneration for creators of journalistic works shared online. In April 2017, the Public Policy Forum published its Shattered Mirror report on news, democracy and truth in Canada. Proposals from approximately 40 news organizations and unions included that the use of copyrighted news material is tightened in favour of creators “without unduly stifling the social power of sharing on the Internet.”

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