Canada is set to force digital giants – like Facebook and Google – to share profits with Canadian media when they make money from their content.

Bill C-18, also known as the Online News Act, was introduced on Tuesday and is the Liberal government’s latest attempt to prop up Canada’s struggling news industry.

The new requirement, however, will not apply to platforms that do not represent a “significant trading imbalance”, such as Apple News or platforms covered by other legislation, such as YouTube, officials said.

But if the bill becomes law, platforms like Facebook and Google can expect to see some of the profits they make from the news go to the organizations behind the content – albeit to the designated regulator, Canadian Radio-Television and Telecommunications. Commission, to decide which outlets get a slice of the pie.

The criteria the CRTC will use to determine which organizations are considered news organizations include, first, whether an organization is designated as a Canadian Qualified Journalism Organization (QCJO) under the Income Tax Act.

If a media outlet does not check this box, it can still qualify if it:

• Employ two or more journalists in Canada
• Operate in Canada
• Are engaged in the production of news content
• “Are not significantly engaged in producing content that promotes their interests or reports on the activities of an organization”

Private and public broadcasters who “produce and publish original news content online” can qualify for a share of the digital giants’ revenue. This means that Radio-Canada, which received more than $1 billion from the government in the 2019-2020 fiscal year, could also benefit from this law.

According to the government, 450 private news outlets shut down last year while Google and Facebook capture 80% of online advertising revenue.

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If the bill becomes law, digital platforms will have about six months to strike a deal with news outlets — or apply to the CRTC for an exemption from the legislation.

The CRTC will publish its decision on whether or not to grant those exemptions — and whether agreements reached privately between digital giants and news outlets meet its standards — within a year, senior government officials said.

But not everything in the bill is that transparent. According to the text of the bill, the CRTC must maintain a list of news organizations that are “eligible” for this revenue sharing and publish this list on its website.

However, in the same breath, Bill C-18 states that the eligible news organization is “not included on the list unless it gives its consent.”

On top of that, when pressed on whether the requirement to share profits with credible news outlets might lead these digital platforms to favor non-news content — like meme pages that can spread misinformation — on their platforms, senior officials said they are “starting from the premise” that digital platforms want to ensure that the services they provide to Canadians are “healthy, inclusive” and provide “trustworthy” information.

Canadian Heritage Minister Pablo Rodriguez reiterated that position during his Tuesday press conference, adding that there are penalties for platforms that choose to favor certain media over others in the algorithm.

That fine, he said, could be up to “$15 million” — the maximum monetary penalty the CRTC will be empowered to impose, per day.

Just as the legislation will not apply to everyone claiming to produce media, neither will it apply to all digital platforms. There are specific criteria that require Facebook and Google to comply with the legislation – and exempt YouTube and Apple News.

The bill will only apply to digital platforms that allow “accessing and sharing news content on their platforms” and that have “a significant bargaining imbalance with news companies”.

This imbalance is determined by a number of factors, including the size of the platform, the market in which the platform operates, and the position the platform occupies in its market.

Shortly after the government announced its plans, backlash from affected industries set in.

Google Canada said it was “still reviewing the legislation to understand its implications.”

“We fully support Canadians’ access to authoritative information and look forward to working with the government to strengthen Canada’s information industry,” said Lauren Skelly, spokesperson for Google Canada.

Meta – Facebook’s parent company – issued a similar, wait-and-see reaction to the development.

“We are currently reviewing the proposed bill in detail and look forward to engaging with stakeholders once we have a better understanding of what the bill entails.” said Rachel Curran, head of public policy for Meta.

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Stakeholders who would end up on the other side of the bargaining table, however, were clearer in their feelings about the bill.

The Canadian Association of Broadcasters – of which Global News is a member – called Bill C-18 “an important step in recognizing the value of broadcasters’ news content”.

“A healthy and independent press is a cornerstone of Canadian democracy,” said Kevin Desjardins, president of the Canadian Association of Broadcasters, in a statement sent to Global News.

“The fair and equitable remuneration of broadcasters for the use and exploitation of their news content is an essential element in ensuring that broadcasters can continue to sustainably fund newsgathering and provide Canadians with news and information that informs citizens and supports our democratic institutions.

News Media Canada also welcomed the bill, saying it allows news publishers to “bargain collectively with digital platforms and services, drawing on the teeth of final offer arbitration.” baseball-style”.

“This approach has been a resounding success in Australia, where publishers big and small are signing meaningful content licensing agreements,” said Jamie Irving, President of News Media Canada.

“Reliable news is needed now more than ever, and real news reported by real journalists costs real money. This law levels the playing field and gives Canada’s news publishers a fair chance and does not require no additional taxpayer funds.

However, the bill lacks the teeth to save the news industry, according to two media experts.

Media money problems are long-standing and this latest proposal is a band-aid to a gunshot wound, said Dwayne Winseck, a professor at Carleton’s School of Journalism and Communication and director of the Concentration Research Project. Canadian media.

“I just think this is all real dog breakfast, to be honest with you,” Winseck said.

“This bill is loaded with expectations and sold as a bailout – that, I think, (is) really dishonest.”

Media revenues plateaued around 2006, Winseck said, and the industry was hit hard by “ill-conceived” mergers, recessions and declining consumer interest.

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According to Peter Menzies, former CRTC vice-chairman and former newspaper publisher, this bill will do little to address these larger issues.

“It’s a pure shakedown from what I can see,” Menzies said.

“Entities that are losing money have successfully lobbied the government and used their own platforms in biased ways to campaign for money earned through innovation and the efforts of other entities.”
This bill, he said, will likely provide “no more than $100 million spread across the country.”

“I don’t see it doing anything other than supporting failing business models at the expense of innovators and entrepreneurs,” Menzies added.

The former CRTC vice-president also feared that the government’s decision to give the CRTC the role of regulator was a step in the wrong direction.

“The CRTC has absolutely no track record in publishing or business models of user-generated content, making it the absolutely wrong organization to involve in oversight,” he said.

“Frankly, it’s just a ridiculous selection.”

Menzies feared that by tying a government agency – albeit an independent one – to the media, the bill could “accelerate the fall in the level of public trust in its news providers”.

“Without trust, the media cannot survive,” he said.

“In the long run, this will probably do more to kill journalism than save it.”