Sedating Democracy’s Watchdogs: Critical Reflections on Canada’s Proposed Online News Act

Abstract

In April 2022, the Government of Canada introduced Bill C-18 (the Online News Act). This Bill is one of the recent attempts by governments in several countries to address a perceived crisis-level disruption to newspapers’ finances by requiring internet platform operators to pay for newspapers’ content displayed on their platforms. As of the writing of these comments, the Bill has passed the third reading at the House of Commons and is now awaiting review and voting by the Senate.

The stated purpose of Bill C-18 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.” It seeks to accomplish this goal by “establish[ing] a framework through which digital news intermediary operators and news businesses may enter into agreements respecting news content that is made available by digital news intermediaries.”

The key element of Bill C-18 is empowering an “eligible news business” or “group of eligible news businesses” to initiate a regulated bargaining process (either individually or collectively) with an “operator” of a “digital news intermediary” and imposing a corresponding duty on such operator to participate in the process, coupled with a duty on all participants to bargain in good faith. The bargaining process consists of three steps. It begins with bargaining sessions. If the parties are unable within a reasonable period to reach an agreement in the bargaining sessions, they enter mediation sessions, and if the mediation sessions do not result in an agreement within a reasonable period, then either party may initiate final offer arbitration.

The underlying assumption behind the proposed legislation is that fundamental unfairness exists in the relationships between news publishers and internet platforms. Essentially, the Bill’s animating narrative draws a connection between newspapers’ declining revenue (both from advertising and from readers’ subscriptions), the growth of digital advertising and of Google’s and Facebook’s dominance thereof, and the fact that newspapers’ content can be accessed freely via Google News or Facebook users’ postings. The logic runs as follows: By providing links to newspapers’ stories, Google and Facebook freeride on that content to attract readers to their platforms (and away from newspapers). As readers have migrated, so have advertisers. Faced with dwindling advertising revenue and confronting platforms with unmatched bargaining power, newspapers have no choice but to acquiesce to the sharing of their stories through these platforms because without readers’ traffic to their websites, they would lose even more advertisers. Hence not only the need to force platforms into a negotiation process that could result in payment obligations imposed on them through mandatory arbitration but also the need to allow newspaper publishers to bargain collectively.

In the following comments, I wish first to question the logic behind the proposed legislation and then to highlight and discuss three noteworthy elements of Bill C-18: (1) how it relates to and departs from copyright (and how it contemplates payments for actions and in circumstances that exceed news publishers’ entitlements under the Copyright Act); (2) the difference between collective administration of copyright and the Bill C-18’s collective bargaining model; and (3) the sweeping immunity from scrutiny under the Competition Act afforded to such collective bargaining. Finally, I will share my biggest concern about Bill C-18’s proposed solution: its sedating impact on the watchdog role of the press.