The CRTC has released a timeline of how it expects to implement the Online News Act. This apparently involves holding consultations starting next month.
There’s been a development in the failed Online News Act. The CRTC, the Canadian regulator tasked to administrating this legislation has decided to hold consultations on implementing the legislation. Those consultations are said to take place early next month.
The Online News Act has been an unmitigated disaster, failing in pretty much every way imaginable. The new law is, of course, Canada’s link tax law. Lobbyists pushing this legislation had long insisted that the platforms depend on news content and actively “steal” their content to keep their business model afloat. This despite the mountains of evidence saying otherwise. Obviously, the platforms responded by saying that, no, they don’t depend on news links in the first place and they don’t “steal” the media’s content. The lobbyists responded by saying it’s a “bluff” and encouraged the government to move full steam ahead.
The lobbyists talking point collapsed when Meta dropped news links in Canada. Those lobbyists responded by saying that Meta would come crawling back within days when their traffic collapsed. That talking point hit a brick wall where the reality is that publishers need platforms far more than platforms need publishers. That played out to the letter as Meta never came “crawling back” to negotiate deals. Instead, Facebook’s traffic remained unchanged while user engagement for publishers collapsed. To this day, Meta is still blocking news links with their earnings continuing to rise and their stock value soared six months after.
Google, meanwhile, was gearing up to drop news links. Meta’s decision to drop news links in Canada has cost the publishers an estimated $230 million in value. While that is incredibly damaging, the value of a websites presence on Google is arguably much greater. A pullout for Google could very easily prove fatal for the news industry. Heck, I was contemplating options should Freezenet get kicked out of Google in the process. The Canadian government, however, realized that they were about to be known as the government that murdered the Canadian news sector. As the deadline approached, the government folded, giving up practically everything and working out an originally asked for $100 million fund model instead. This in exchange for not dropping the news sector from Google results across multiple services. The move ultimately killed the link tax law thanks to the governments last minute panic and surrender to Google.
While small websites like Freezenet would live to fight another day, the damage is quite severe. In all, the publishing sector now operates at a $130 million per year loss between what happened with Meta and Google. The link tax concept is officially dead as well. In response, the Canadian government used its last tool in the tool chest: a massive bailout for the sector. This was pretty much the only thing the government could do under the idea that such a move would finally “save” journalism jobs and make the news sector whole again despite this whole sorry affair being a legislative blunder of epic proportions.
Those bailouts, however, ran into one problem: the media companies themselves. While the media lobbyists talked a big game about this whole thing being about saving journalism jobs, it was all a big blatant lie in the end. The truth in the matter is that the big media companies had no intention of retaining those jobs in the first place. After getting everything they wanted, the CBC slashed 10% of its workforce. this was followed up by Bell slashing 9% of its workforce despite making $435 million in profits in a previous quarter. The outcome repeated what happened in Australia where NewsCorp became the biggest beneficiary of Australia’s link tax law only to slash 1,250 jobs after. The cuts definitively proved that this was never about saving Canadian journalism jobs, but rather, getting free handouts from the government.
Regardless, Bell’s decision to unleash its wave of pink slips caused a rift between the media companies and the Canadian government. High ranking government officials in the Canadian government lashed out at Bell in response, effectively calling the move a deal being broken. Obviously, there was never any strings attached despite my recommendations to guard against this very activity. In the end, even the government realized, at least in that particular moment, that they had been hoodwinked, falling for the media companies lies hook, line, and sinker.
Ultimately, pretty much everything about the Online News Act has been a total failure. The link tax concept is dead, it has become obvious that this was never going to save journalism jobs, and the media companies themselves are now operating at a loss as a result of all of this. You might think that this part of the debate is largely over, but that isn’t necessarily the case. Apparently, the CRTC has announced that they will be conducting consultations on how best to implement this law. Those consultations are said to start as early as next month on top of it all:
Our Plan
While the regulations provide a path for platforms to receive an exemption from the formal bargaining process, the Canadian Radio-television and Telecommunications Commission (CRTC) must still be prepared to administer the formal bargaining process and must implement other provisions in the Act. The CRTC will launch public consultations to gather the views of Canadians and interested parties on the regulatory framework.
By early March 2024
The CRTC will hold a public consultation on the formal bargaining process, undue preference and information gathering. The CRTC expects to launch the public consultation by early March.Spring 2024
The CRTC will issue a call for proposals for an independent auditor, who will prepare an annual report on the impact of the Act on Canada’s digital news marketplace.Platforms have to notify the CRTC if the Act applies to them no later than June 16, 2024.
Summer/Fall 2024
The CRTC will begin publishing decisions setting out the regulatory framework.The CRTC will hold a public consultation to establish a code of conduct for bargaining.
The CRTC will also recruit qualified independent arbitrators and begin information gathering.
The CRTC will update its regulatory plan as needed, including its plan for examining exemption requests as they are received from online platforms. The exemption requests will be subject to a public proceeding in which all interested parties can participate. The CRTC will issue its decisions in a timely manner.
The CRTC went further by saying this on their website:
Have your say
Canadians, industry representatives and affected parties will be invited to comment and help build the regulatory framework through public consultations. All comments received will form part of the public record and will inform the CRTC’s decision. For the first public consultation, the CRTC will want to hear from you on:
- How the bargaining, mediation and arbitration processes should work, including when and how to initiate each phase, how arbitrators should be chosen, and the scope of final offer arbitration.
- The scope of what behaviours should be considered undue preference or disadvantage under the Act.
- What data the CRTC should collect to fulfill its mandate under the Act, including information necessary to allow the independent auditor to prepare its annual report on the impact of the Act across the Canadian digital news landscape.
We encourage all interested parties to prepare for the upcoming consultation process and to follow the conversation on our Twitter and LinkedIn accounts.
If you wish to participate in this consultation, and you have questions about our processes, we are here to answer your questions.
On the surface, this is just plain bizarre on multiple levels. After all, what is there left to discuss at the regulatory level? There’s only two players that this law affects: Meta and Google. Meta has dropped news links and is out of the legislation and Google has worked out a fund model with the Canadian government. That’s… everyone, right?
Well, late last year, we noted that the Canadian government was begging for Meta’s return. That lasted only two days as the Canadian government then demanding that the CRTC “regulate” Meta. The Canadian government has been on the warpath for revenge against Meta for… following the law. The government wants Meta to follow the law not in that way. It’s kind of incomprehensible how the Canadian government is going to get Meta to restore news links and get them to pay the ransom payments as there really isn’t any viable legal mechanism to help them force the issue.
Still, it’s probable that this is an angle that the CRTC, under order from the not arms length government, is probably attempting to pursue thanks to the language of “undue preference” on the CRTCs site. The problem is, even if the CRTC somehow finds some way of legally compelling Meta to show news links (which would be quite the legal accomplishment), Meta also has the option of simply leaving Canada altogether. This has the prospect of causing further damage in this already demonstrably proven fatally flawed legal thought exercise in the first place. Instead of the media sector seeing significant harm, there would be the possibility of everyone else seeing those damaging effects as well.
It’s entirely possible that the lobbyists will warp and contort the concept of “undue preference” to try and argue that Facebook dropping news links will represent “undue preference”. The problem here is, obviously, who are being unduly preferred in all of this? This isn’t one website getting preferential treatment altogether. Instead, everyone is equally suffering under the new law. There is no limit to the arrogance of the lobbyists, so it would be of little surprise if this is how they intend on approaching this.
Another thing you’ll probably note in the posting is that there is little information to work with here. This is a continuation of the CRTC doing everything in its power to keep the public out of the consultation process as much as possible while pretending to be open and transparent on what they do. After all, the CRTC did this with the Online Streaming Act hearings by intentionally keeping deadlines comically short, pushing public feedback out of the consultation process. More recently, organizations from all sides are calling for clarifications on up and coming consultation processes (a request that appears to have been denied).
Ultimately, the CRTC is just following the standard procedure of ensuring that government access is simply a lobbyist affair and little more. This while pretending to solicit public feedback when that really isn’t what is happening.
Other parts of the hearing announcement was simply something they had to do anyway, regardless of what a fruitless exercise this all is. The regulator had to figure out a way to put together an annual auditor report so they can offer the public minimal information, restricted largely to totals only. The arbiters were basically required by law in the first place. Supposedly, that is about information gathering. We already know what information they are going to gather, though. Meta has exited the marketplace and no further action required. Google has already worked out a deal with the federal government, no further action required. Really not that hard.
Ultimately, this is going to be an exercise in futility for the most part. The CRTC is going to find that there is no practical way of extracting any further revenue from this. There’s no playing cute with the law and attempting to rope other platforms into this law as that is outside of the scope of the law. So, really, the only thing I can see coming out of this is either nothing of real note or Meta will be motivated to simply block Canada entirely. That’s really the only two outcomes I can see at this moment coming from this. We’ll, of course, see if there are any surprises to come out of this, but at the moment, there is little reason to believe that much will come from this outside of maybe figuring out how to divvy up the Google media slush find (spoiler alert: it’s going to largely go to the largest players).
Drew Wilson on Twitter: @icecube85 and Facebook.
