We decided to look back at the Heritage Committee Hearing on Bill C-18 (Link Tax).
We’ve been following with insane detail what is going on at the Senate hearings with regards to Bill C-11 – even going so far as to creating a whole vlog devoted to this emergency situation. While covering this massive looming threat to the internet, it is far from the only one in Canada.
You might recall that there is also Bill C-18 – Canada’s Link Tax law. Back in April, we offered an analysis of the legislation. In short, it compels search engines and platforms to pay a tax for linking to any news article. However, it sets ‘eligibility’ requirements to ensure that small news outlets, like us, do not qualify. As a result, establishment news organizations effectively steal money from uncorrupted sources like us, getting an unfair advantage in the process. Even worse is that the same law could be a massive financial windfall for troll farms and state sponsored misinformation campaigns. It’s a massive disaster of a bill that only a Heritage Ministry could love.
So, what does it mean for us in particular? It would incentivize a search engine like Google to downrank us in search results. A large majority of our effort up to now is to find different ways to be found on Google. As a result, what trickle of money we do get would very likely get completely cut off, robbing us of any real chance of growing beyond this being a one person operation. All this because mainstream media suck at their job and couldn’t figure out how to adapt to the online world.
Unfortunately, we couldn’t follow the link tax debate closely as of late because what resources we did have was focused on the Bill C-11 debate. C-11, of course, is much further along in the process and is, therefore, a much more pressing issue to cover. Thankfully, the Senate are apparently on a one week break which allows me to cover what was said during that hearing.
The video itself can be found here. While we will try to provide a thorough summary, in terms of thoroughness, nothing will beat the actual video or official transcript. However, we are happy to provide the summary as well as some additional analysis as well. So, with that, let’s take a look at this one.
Opening Statements
Jen Gerson of The Line opened with her remarks. She says that the first major concern with Bill C-18 that she has is that it is predicated on a lie. Specifically, it’s based off of an ancient grievance that online aggregators and social media networks are unduly profiting off of publishers work by “publishing” their work. Of course, we know that this isn’t true. In fact, the value proposition runs in exactly the opposite direction. Publishers are the ones who benefit when users post a link to their content on Facebook, Twitter, and the like. This free distribution drives traffic to their website which they can monetize through subscriptions and advertising.
This, she explains, why media companies encourage sharing with links below articles, it’s why they spent untold sums on SEO (Search Engine Optimization), and it’s why they spend money to boost stories on these platforms. If you need evidence that these intermediaries are more valuable to publishers, and not the other way around, then you need to only look at the existence of this bill in the first place.
Negotiations, she notes, is sustainable when the outcomes of those negotiations serve the interests of all parties involved. If that were the case, then there would be no need for the federal government to oversee these deals. Digital news intermediaries would be happy to negotiate for the use of their content because they perceive value out of those deals. Instead, she suspects that what we see here is a form of rent seeking behaviour where struggling media organizations are using every last iota of their dwindling social and financial capital to lobby for subsidies and regulation like C-18.
She says that she fears that C-18 is going to backfire spectacularly, undermining the very problems it is trying to fix. For example, if organizations like Facebook or Meta by simply restricting access to mainstream news content, or news articles, on their sites, as the company has openly threatened to do, who do you think is going to be most harmed by that decision? Facebook? No. It will be Canadian publishers themselves who will be harmed by losing access to a major distribution hub.
When that happens, she explains, do you think that news links from Facebook or Twitter will somehow create a digitized version of the glory days where Canadians wake up every morning, logging in to their daily newspapers, or are we risking the opposite effect? Would it actually strip mainstream media outlets from social media platforms where many Canadians live their online lives? She fears the latter outcome. If you make it costly for digital news intermediaries to publish mainstream news content, they are going to make the very obvious financial choice. That is, they are going to distribute less mainstream news content, pushing more and more Canadians into information silos on places like Discord, Slack, and Signal – platforms that the federal government has little hope regulating in this fashion.
Her second major concern is that the more the federal government tries to help the media, the more it risks hurting their credibility. She respects that C-18 attempts to create a framework that avoids subsidies, but this is not a neutral market-based approach. When the federal government tries to save the media, the media become a legitimate target of partisan attacks which undermines their democratic role and function.
She explains that we say a few examples of this over this very week with the leader of the official opposition, Pierre Poilievre raising money off of Parliamentary Press gallery reporter, David Aitken. Poilievre also took pot shots at another journalist, David Smith, on Twitter. These attacks on media are strategic and popular. Journalists are not well liked by the public who have a negative opinion of the press corp who are seen as being on the take. She then cites a Reuters report that noted the sinking trust in the media, where trust had sunk to a 7 year low in 2020. She notes that this is a continuation of a downward trend. The opposition leader has concluded that attacking the media benefits him and she doesn’t think he’s wrong in that calculation.
To that end, she says she has real concerns of making media depend on revenues that is subject to the government that’s in power. A future government, say, one that is led by Poilievre, will have no problem undoing C-18 and other subsidies. The industries dependence on these revenue streams makes them pawns of partisan politics whether they wished to be or not.
Her last beef with C-18 is that it will inevitably favour incumbent players over innovative models, small outlets, and new startups. We saw that when a similar bill was enacted in Australia where the biggest beneficiary was Rupert Murdoch and foreign entities.
her last point is that she would point out that the appropriate mechanism the Federal government dealing with issues like misinformation and disinformation is through the CBC, not through creating an entirely separate legislative framework.
Dr. Michael Geist then opened with his remarks. He delved into the CMAC scandal, calling for an investigation to ensure that this never happens again. He then notes that he has been very critical of Bill C-18. He says that the criticism doesn’t stem from doubts about the importance of a robust, diverse news sector. That success is critically important to ensuring an (engaged?) where citizenry can hold their democratic institutions to account.
Rather, he has concerns about the methods. He has spoken positively about the governments tax programs (audio quality gradually got worse, even suddenly dropping to static. Video feed is then dropped. Feed eventually returns in middle of Dr. Geist speaking.)
Dr. Geist says he has limited time, so he wanted to highlight four issues. First, the use of news. The approach to the use of news articles extends far beyond what a reasonable person would consider use. Section 2(2) covers both any reproduction of any portion of a news article and facilitating access by any means. That means, the first part, that even producing a headline or sentence summary is covered even though that can be freely used as covered by the quotation rights under the Berne Convention.
Second part means that linking or indexing to the front page of a news site, not even an article, is treated as compensable activity. That just can’t be right. Treating mere linking as a thing of value requiring compensation- (a point of order was raised due to a frozen video feed. Hearing was paused with Dr. Geist seemingly being audibly frustrated with the tech issues).
Rod Sims of the Australian National University then opened with his remarks. He said that based on his experience with the Australian code, Bill C-18 should be strongly supported. He said the Australia approach was to address the ‘massive’ imbalance between the media companies bargaining power and the platforms. Google, he claims, needs news to maximize user attention and enhance their advertising revenue which they depend on. They don’t need the content of any particular news outlet. Each news outlets needs to be on the platform. This market failure, he says, means bargaining deals cannot be done and those bargaining deals cannot be done for the news media that platforms benefit from having on their platforms. The outcome is less journalism (if that were true, Freeznet wouldn’t exist.)
He then spoke platitudes of the need for news and said that while some market failures don’t need legislation, the Australian News Bargaining Code was needed (how else can Murdoch afford another solid gold Humvee?) Prior to the Code, outlets were simply unable to negotiate any form of payment for their content. With it, arbitration can happen if negotiations didn’t yield an appropriate result.
Australia’s Code, he claims, has been extremely successful in achieving its objective (for mainstream outlets to freeload off of Google’s success). The deals work out to $2 million per arm. He says that there are three essential elements in the Australian Code that appear to be in C-18. First, arbitration if negotiations are unsuccessful. Second, non discrimination where if a deal is done with one outlet, then they must be done with all (factually incorrect due to stupid eligibility requirements). Third, the ability to collectively bargain (not universally granted, so misleading).
He noted Google and Facebooks threats to pull out of the country, but when the legislation was passed, those threats were not carried out (because they foolishly thought that the Code would indirectly eliminate all future competition in their spaces – something both are having second thoughts on now).
He then said that there are two criticisms of the bill. The first was that it was only the large media outlets that got deals and that the smaller players missed out. This is simply false, the facts are very clear (very clear indeed). Australia has four similarly sized media players and they all got deals. The medium sized ones, with two exceptions, got deals. Most of the small players got deals and journalists are getting good money for their work. The second criticism is that the money didn’t create money in journalism, that’s not true, it did. Signs of that are everywhere. The Guardian Australia added journalism positions.
(Dr. Geist was back and the chair tried to only give two minutes for him. Kevin Waugh raised a point of order, asking for 4 minutes due to the technical interruptions and that the committee needs to hear from Dr. Geist. Everyone agreed and 4 minutes was granted to Dr. Geist. Audio was just as bad and Dr. Geist switched to his podcasting equipment. So, it is apparently possible for Dr. Geist to have a bad day.)
(Summary continues where Dr. Geist left off before the technical issues as some of the information provided was repeated.)
he said that treating mere linking as something as a thing of value requiring compensation runs counter to Supreme Court Jurisprudence on the importance of linking and threatens the lifeblood of the free flow of information on the internet. If Google or Facebook copied full articles, then he could understand the argument for compensation. Indeed, those companies have struck deals to pay for exactly that. When Dr. Fry posts a link on her Facebook page to and MSN.ca article or Mr. Julian posts a link on his Facebook to a Canadian Press article, as they did this Summer like millions of other Canadians, he doesn’t think we are anywhere near a new making available standard that should require compensation.
Second, he explains, the government has claimed that the bill represents minimal government intervention, yet the reality is that there is an astonishing number of rules and bargaining standards established by the government or the CRTC in the bill which has a real world impact on government interference blurring the news editorials and business divides.
Third, he notes, at a time when there are rightly concerns about misinformation and low quality news sources, bill C-18 risks increasing misinformation. For example, the definition of news content contains no standards or links to professional journalism. Instead, the language, which he notes is different in the English and French versions of the bill, could incorporate blog posts, opinion pieces, and other content. The governments approach on qualified Canadian journalism organizations has detailed guidance on what constitutes news to ensure tax breaks go to high quality journalism. Bill C-18 does the opposite.
Moreover, he explains, the Bill creates potential liability for platforms that use algorithms to demote content. To be clear, we need algorithmic transparency. However, the provision of undue preferences may mean that platforms may refrain from demoting low quality journalism for fear of liability.
Fourth, he points out, the bill is offside with several treaty and constitutional obligations. For example, Section 24, which excludes copyright limitations and exceptions from the bargaining process may violate Section 10.1 of the Berne Convention which has a mandatory rate of quotation that expressly includes newspaper articles. Further, the bill is filled with potential CUSMA (or USMCA) challenges. For example, Section 51 of the bill features what amounts to a ‘must carry’ obligation designed to prevent the platforms from linking to third party content.
Dr. Geist further explains that while self-dealing anti-competitive measures targeting anti-competitive conduct from the platforms is welcome, these provisions do beyond that and are vulnerable under CUSMAs performance requirements under 14.10.
Dr. Geist explains that with regards to constitutional concerns, the bill isn’t broadcast or communications and it is not copyright. How does it fit within federal powers? The government claims that powers involving anything over the internet, there are no real limits on jurisdiction. As for the Charter statement, it inaccurately claims that the bill supports news organizations when the internet platforms monetize their content even though that is not what the bill says or provides.
Benoit Chartier of Hebdos Québec then opened with his statement (sharing his time with Sylvain Poisson). He notes that his digital platforms gets a total of 20 million pageviews per month and close to 15 million separate visitors per month (so, uniques probably). He noted that one of his newspapers is celebrating a birthday and the best possible gift, according to him, is C-18. He said that journalism is important in the face of misinformation flowing on social media.
Poisson continued the remarks. After the note about the pandemic having an impact on journalism, he says that the crisis has been exacerbated by the arrival of Facebook and Google. Content aggregators which the internet gave birth to have multiplied at very little cost without producing original content with little or no investment in journalistic resources and few ethical rules for information. Some news sites, and the proliferation of social networks, encourage the mixing of genres, but not the credibility of sources. They disseminate rumours or fake news and this famous fake news overrun networks and goes against he responsible and accountable press and journalistic rigour that they ardently defend.
We giants, he claims, has cannibalized their revenues (no they haven’t) without assuming the social and fiscally responsibilities that goes with it by controlling the algorithms. They have disrupted the business model and diminished the real value of information (Yeah, that’s all Google’s fault and totally not the fault of Fox News and the outlets they inspired). Above all, they have succeeded in attracting 80% of advertising investments of local and regional businesses without any tangible benefits in the communities. In just a few years, without any tax contribution, these web giants have eroded the revenues of traditional media (maybe it was a mistake to assume the internet was just a fad then?) that for decades have invested time and money into the communities, encouraged their professionals (not my personal experience), supported their institutions, and served the interests of their fellow citizens.
He then says that they, therefore, support Bill C-18’s approach of addressing the market imbalance between global web platforms and news media publishers (which amounts to freeloading off of them for reasons of entitlement). In their view, collective bargaining is the only way to medicate this clear imbalance of powers.
(When the chair turned to News Media Canada, there was the realization of an error in the paperwork. One witness was actually representing The Logic, not News Media Canada.)
David Skok of The Logic then began his opening remarks. He commented that he didn’t want to be there. his job is to report on what parliamentarians do there, it’s certainly not to be a part of it. Yet, he feels like he doesn’t have a choice. He talked about how the Fourth Estate is in crisis. He says we all know about decline in journalism because all you have to do is look at your own news feeds to see hot takes and sources amplifying hot takes. He then said that journalism costs time and money unlike those hot takes.
From there, he commented that a select few media publishers are already being paid out by large tech companies which has turned this into an anti-competitive market. As a result, he says that this risks starving the journalism sector of the innovation it desperately needs. When The Logic tries to compete against an outlet being bankrolled by the wealthiest family in Canada, one being further undermined by secret deals by these large companies, how does that help foster journalism innovation?
After that, he says that the online news act seeks to rectify this imbalance (it does the opposite). He claims it’s a backstop forcing publishers and platforms to come to the table for fair and transparent agreements (it’s not fair if the money was never really the publishers money to begin with) that don’t privilege those with negotiating power (sorry, the bill still does this). C-18 is a pro-competition bill (that is a straight up lie), but it is also good for journalism (no it is not). Without regulation, publishers that have already signed these secret deals are depending on the good faith of tech firms to keep them in place (they never should have got them in the first place).
As an editor, he says, how much of those deals are worth? What was bought? What happens when it is time to renew those deals? How are those tech companies expected to be reported on fairly when those publishers depend on them for their pay role? (That’s actually a great argument against C-18, whether this guy realizes it or not) Currently, we cannot answer any of those questions because they are all covered under non-disclosure agreements.
He then claims that Bill C-18 forces those deals out in the open (provisions in the bill actually makes these disclosures voluntary), and that is good for journalism. As the saying goes, sunlight is the best disinfectant (very happy to be providing it here, thank you.) He is optimistic of the future of their craft. It takes time for news to regenerate. It takes time for young journalists to relearn what has been lost after decades of job cuts (not the platforms fault), and it takes time for today’s startups to become tomorrows leaders (probably the first thing I actually agree with him on).
He says that if there is one thing to take away today, its that all of this innovation requires a level playing field (Step one: scrap Bill C-18). Bill C-18 seeks to correct an existing imbalance (it makes matters worse) which is why it needs to pass (so you can freeload off of the success of another business).
(I never knew who this “journalist” was before seeing this video today. It was quite remarkable seeing someone blow up all of his own credibility as a journalist over the span of a mere 5 minutes. Bad research into the bill, hilariously bad lies, and hypocritically railing against hot takes in the process. It’s kind of impressive in that train wreck kind of way.)
Paul Deegan of News Media Canada then opened with his remarks. He claims that there are three reasons why this legislation is needed. He spoke about the need for journalism today such as holding government to account.
The second reason is the alleged imbalance between news outlets and tech giants (so, that debunked talking point surfaced). He talks about the market cap of Google and Meta (which is actually irrelevant in this debate). Then, he says that those two companies take up 80% of the ad market.
Third, he claims, with the prospect of legislation, Google and Meta started picking winners and losers by negotiating license agreements with a dozen or so publishers (so, getting everything they wanted is somehow a bad thing). He hilariously said to not get them wrong and they are happy for their fellow publishers, but we now have a situation of haves and have nots (which means we should actually void all of these deals and ban these anti-competitive arrangements altogether, but publishers are not after real solutions). This isn’t fair to smaller publishers who are getting left out in the cold.
He then outlines three reasons why they support this legislation. First, it allows them to negotiate collectively (through the use of anti-competitive cartels that does nothing to spur journalism and competition).
Secondly, it includes an enforcement mechanism that involves “baseball” style arbitration (so that no matter what, the media outlets can freeload off of the success of the platforms while never having to worry about competition or any need to innovate ever again because anything that truly competes will get starved into submission). He then cites Australia’s News Bargaining Code as a success story (which destroys his credibility in the debate). Sure, the largest media monopolies benefit the most from this, but this is fine because smaller outlets got settlements too (an astonishing admission of how problematic the Australian example is critically flawed).
He concludes by admitting that Google and Meta have important roles in the news media ecosystem, but they are large companies that retain users in a walled garden designed to extract value from content. They “simply” want that value so they can re-invest in their newsrooms.
Round One Questions
Questions began with John Nater. He notes that both Gerson and Dr. Geist mentioned a value proposition in their opening statements. He asked Dr. Geist if he could elaborate on how this bill is going down an a skewed path in terms of where the funding will be directed to.
Dr. Geist responded that we’ve heard from several witnesses emphasizing that their materials, their work, their news content is being used and they should be compensated for that. If this is use most Canadians would consider use – i.e. Google or Facebook copying their articles onto their own sites and running ads against them – one can well understand why that would be the conclusion. However, the definition that is used in this legislation goes far far beyond that. It speaks to merely facilitating access to news – putting it in an index with even just a portion of the work.
So, if you link to the front page of the Globe and Mail or the National Post or the Toronto Star, that’s facilitating access to news. If you got merely a link uploaded by a member of this Committee or himself or someone else, that link is considered facilitating ‘access to news’. He doesn’t think that is use in the way people would think of it, and when we say that publishers aren’t being paid fairly, that’s the kind of thing that they shouldn’t be paying for. There’s no copyrights in it, so if we are talking about compensating for use, the legislation ought to reflect that and he doesn’t believe we have a definition that comes anywhere near close to doing that.
(This is exactly how I see the legislation. The media has constantly conflated linking and “use” throughout this entire debate. Those are two separate things entirely. If someone posts a link on Twitter to a news article, this is what the media is claiming to be ‘using their work’ or ‘reproducing their work’ or ‘using their work without compensation’. There is absolutely no precedence anywhere else in copyright law in Canada that says that merely making a reference to a work is something that needs to be compensating. As a result, we are completely upending very core aspects of copyright law in the process – not to mention attacking core building blocks of the internet’s infrastructure which is mere linking to material. It’s completely insane.)
Nater asked for thoughts from Gerson on that.
Gerson responded that she wished she could be a bit more candid with what we are talking about. When we say that Google and Facebook are in competition with news media outlets, we are not in competition for content, we are in competition for ad revenue. That is why the business media’s business model fell apart. It wasn’t because Google and Facebook started “stealing” the content, it’s because Google and Facebook started providing a better platform for which individuals could advertise on. They managed to provide more attention. So, she wished they could be a bit more candid about that.
The second thing she points out, last she checked, four in every 1,000 links shared on Facebook are news content (we can confirm that this is an accurate statement). Most links are cat videos or pictures to kids. The idea that Facebook in particular needs us – if you believe that, you are setting yourself up for a financial fall. You are going to make yourself dependent on a business that doesn’t need you.
Google, she notes, may be a little bit different, however, we all know about the fables of social media like MySpace and other kinds. We know that these things have a temporary life span and we also know that people evolve in their social media use and their social media habits, so what are you going to do when Facebook increasingly becomes a place for Boomers sharing cat videos and a majority of internet activity is happening on forums like Discord, Telegram, and other forms of semi-private organizations and that’s where links are being shared if they are being shared at all.
So, she concludes, bluntly, you are setting yourself up for a dependency for ad revenue that can’t and won’t be sustainable in the long run. She has some real concerns about that.
(These are very good points. As another witness inadvertently alluded to, the idea that your ad revenue is dependent on these platforms raises real concerns about long term credibility. Are you really going to trust a news outlet to fairly cover something happening with Facebook if a massive chunk of their revenue comes from Facebook? So, over top of the concerns about the long term viability of making these so-called “deals”, you also have questions about additional headwinds of mainstream news outlets credibility in the process – something that has badly afflicted the big news outlets already in this debate alone.)
Nater commented that, under this bill, it is noted that the CBC would be included in that. He says he finds it interesting that this program would also be administered by the CRTC. Just last week, the governor in council sent back the CBC’s license renewal to the CRTC, so it is interesting that the CRTC will also be in charge of all of this. So, he asked Dr. Geist about his thoughts of the inclusion of the public broadcaster and also the CRTC being the one to administer it.
Dr. Geist responded that he doesn’t think this is the CRTC’s bailiwick in terms of the role it plays. It sets an enormous number of standards and he believes that there is reason for concern for that.
He also said that, frankly, the inclusion of broadcasters is problematic. There is another example of different definitions in the English version of the bill and the French language version of the bill with respect to broadcasting. If you talk to digital first operatives, they will tell you that the CBC is a competitor of theirs in those local communities and to provide them with additional revenue effectively forces their hand. Even if those small and independent players don’t want the money, they got little choice but to participate in this system. It’s basically forced negotiation for those kinds of companies too.
Lisa Hepfner opened by saying how she was a print media journalist for many years (since the 90’s) before getting into public life. Over that time, she saw the decline in journalism. She said she’s pleased with Australia taking the lead in addressing this “imbalance”. She then asked about what journalism is like today vs before the Australian Code. This as she gushed over the presence of Sims.
Sims responded by saying it’s gone from pessimism to optimism. He spoke about The Guardian Australia going up by 50% and is just a middle player backed by the UK version of the Guardian (so, a foreign player).
Hepfner responded by saying that even smaller players have benefited from his legislation.
Sims responded by saying there’s no doubt about it and all the commentary critical of it is “misinformation”. He spoke about one corporation that has 180 news rooms and they got a great deal. So, he said that it is a myth that this has only helped the large players – complete misinformation. (I facepalmed too).
Hepfner responded by noting that the law, as she understands it, is being reviewed. What does Sims say that are improvements that he foresees coming from it?
Sims responded that one improvement could be a little bit more transparency. Specifically, aggregate level information of what deals are being struck.
Hepfner asked if C-18 is an improvement on his legislation.
Sims responded by saying he hasn’t really gone through the bill, but the transparency is an improvement.
Hepfner asked sims has any reactions from the criticisms he’s heard from other witnesses this afternoon.
Sims responded by saying that there is misunderstandings with what has really happened here – that Google and Facebook have opposed themselves with their audiences. He claims that there is no doubt that Google and Facebook benefit from news media (not the criticism). You don’t have to advertise against it to benefit, you just get eyeballs to your site, that’s how they make money (not really. Personal information would be a much stronger candidate for that.), they provide free services, and make money through targeted advertising. They haven’t replaced journalism, they are just destroying journalism (that’s defamatory). They are certainly damaging it (a second defamatory statement).
He further claims that this is about journalism. This is about Facebook and google having business models that provide free services to get eyeballs for targeted advertising. By getting free services, Google and Facebook aren’t paying for content either and that’s the problem (false statement number 3 as proven by Gerson and Dr. Geist). They are taking content, they are monetizing it, and not paying for it (false statement number 4).
Martin Champoux commented that Bill C-18 was highly anticipated by the media across Canada (of course, who could argue with free money for doing nothing?) He noted that Gerson commented that bill C-18 was based on lies (it was created on a premise that it is a lie, but that is accurate) and that media outlets are using their efforts to take advantage of these platforms. He asked if two of the witnesses could talk about the economic situation of print journalism.
Chartier responded by saying that what the earlier witness said was completely false and he can’t understand someone saying such a thing (it was the truth, but you are a mainstream journalist, so I guess you wouldn’t understand why someone would speak the truth). He then commented that there is a serious erosion of ad revenue and this has had an impact on their ability to employ journalists across Quebec. He says that Bill c-18 is a question of survival. Simply put, if C-18 does not come into effect as a law in Canada the situation will increasingly become dangerous for the survival in Quebec print media.
Poisson chimed in, saying that strong words are being used such as “lies”, “cat videos”, and certain platforms like Discord and Telegram and they only reach 0.5% or 1% of users on social media. These words are used, why? To normalize or downplay the impacts of web giants (false statement number 1). Facebook and google spent the last year to work against their efforts and against C-18 (that’s what happens when you lobby for stupid laws that force unfair business practices to become normalized). They have acted in all number of ways (so did the media with their massive lobbying efforts, you are just pissed off that they hit back). If their impact on news media was not so great, they would not have made such an effort to act against this (false statement number 2).
Champoux turned to Sims and said that it struck him when Gerson said that if they acted against Facebook and Google, that they could pull news media off of their platforms altogether. Also, this could lead to larger amounts of money to large companies and smaller companies to the detriment of smaller media companies. Based on his experience in Australia, is that argument valid? (yes)
Sims responded that Google and Facebook do need media (not really that much). There’s just no doubt about that. They changes news feeds to just feeds and it’s obvious why they changed that (finding meaning in nothing, are we?). They want eyeballs, they need media because people will do searches on Facebook and Google (red herring argument). There is no doubt that, for the bills, the beneficiaries are the smaller players (false statement 5. Freezenet and similarly small outlets will not benefit based on the current drafting of this bill). The larger players do better on subscriptions where the smaller ones simply cannot). The Australian Code has disproportionately benefited the smaller players (Unlikely).
Champoux commented that smaller players might have a harder time negotiating then larger players. In Australia, have smaller players been able to negotiate and complete deals or do they have to bargain collectively?
Sims responded that roughly half of them got together and bargained collectively and the rest have done deals individually. However, the really small ones have to bargain collectively (nice admission). That’s worked fine.
Peter Julian asked Sims to elaborate on the situation with small papers. He also asked for the portion of money that went to the medium and smaller players.
Sims responded that Google has done deals with essentially everybody. Facebook has done deals with almost everyone. As for how much, he didn’t know and the arrangements are confidential, so he cannot do that anyway (what a surprise). He said that the smaller players have benefited a lot from the code.
Julian asked about the organization mentioned and if it’s a conglomerate or a union of smaller players.
Sims responded that it’s a union of smaller players, but they are really small players.
Julian asked for maybe some information to be provided about the distribution of funding. He said that Sims is right to say that there is a lot of misinformation about the bill (that misinformation comes primarily from supporters of the legislation, mind you), but it would be good to provide that information so that the solid information can counter the misinformation.
Sims refused to comply citing confidentiality (LOL!). However, he commented that they are very pleased with the deals and encouraged the MP to follow-up with them on that.
Questions Round Two
Rachael Thomas noted that people in the table have said C-18 is about protecting journalism and others have said that it’s about protecting democracy. She then asked Dr. Geist to weigh in.
Dr. Geist responded that if this was a bill about journalism, then there would be a lot more support for it. We should be clear, it’s not. It mentions the word “journalism” once with respect to qualified journalism organizations and it has three sections that mention “journalist”. It’s not about journalism or journalists, it’s about funding some of these legacy media organizations.
In fact, Dr. Geist points out, there are no standards with respect to journalism at all and you need to contrast that with what the government has approved as QCJO (Qualified Canadian Journalism Organizations) which sets a wide range of standards to ensure that what you are producing, and incentivizing the production, is high quality journalism. There is none of that in this legislation. So, with the low standards of allowing entry into what is qualifying is incentivizing click bait – low quality journalism where people are paid based on the number of clicks that can demand to be part of this collective bargaining as you just heard.
Dr. Geist further explains that when we look to platforms to meet that out and get them to use algorithms to prioritize high quality journalism over the low quality journalism, legislation hits you again, creating liability when you emote that. So, the danger is that we are not supporting high quality journalism – we will be supporting legacy companies to be sure – but if this was about journalism, one would have thought you’d mention it in the bill more than a couple of times.
Thomas commented that one of the things that Dr. Geist pointed out is the lack of clarity in terms of terms used in this bill. For example, news content. Dr. Geist has gone on to say that Bill C-18 may not be constitutional. So, what impact would this lack of clarity have and why do you think we are in this situation? She notes that we have been here before with other bills with this Liberal government where the government repeatedly says “just trust us”. So, she wondered if Dr. Geist would care to comment on that.
Dr. Geist responded that he’s already noted a number of problems within the bill. There may well be others where the English version and the French version don’t align and creating confusion as to what the government intended with this bill. Beyond that, it is vulnerable with the agreement with United States quite clearly. It is vulnerable with Canada’s international obligations with respect to copyright. He finds it astonishing that we would effectively say, certain parts at least, that we don’t have rights to quotation. You have to set that aside for the purposes of negotiation. This is a must-have within international copyright law and that has been excluded. He notes that this is something you do not find in the Australian legislation. That is a made-in-Canada violation of international law.
Then, Dr. Geist continued, from a constitutional perspective, he struggles to see how this fits in with traditional powers of the federal government. As he says, not broadcasts, not telecom, not copyright, news isn’t traditionally found within that purview. What’s the likely outcome of this? There is no question that this will be challenged on a number of different levels. So, the idea that this will result in fast agreements and fast payouts strikes him as exceptionally unlikely.
Thomas then turned to Gerson and commented that if she were to find the central point of her opening statement, it’s that there is a massively detrimental impact of government interference with regards to journalism and media. If you get rid of the government, you bring back trust – both with the trust of the public which is waning right now because they perceive the media as being bought off and reporting stories correctly. Politicians raise many of the same concerns. So, if you want a true return to democracy and democratic principles being protected, then we should allow the media to function independent of government. She wondered if Gerson could comment on this.
Gerson responded that she is a small media organization and she does not want money through this program and she does not want money from this government. She wants to be a self-sustaining business.
Now, she said, she has to take exception because some of the witnesses have misrepresented what she said (the understatement of the hearing). She responded to Sims saying that she didn’t say that only money went to Murdoch organizations, she said that a bulk of that money went to Murdoch organizations (agree with Gerson, that’s what I heard her say as well). I his testimony, he said that he doesn’t know (where the money went). Does he not think that some of that money in this Canadian law isn’t going to zombie organizations like Post Media? Of course it will. This is because they have the size, the mass, the legal authority to negotiate more.
Secondly, she pointed out, she didn’t say that it was a lie that media organizations are struggling. Of course they are struggling, we all know that. What is a lie here is that the media organizations that don’t benefit from the links involved. The media organizations benefit from the links.
Anthony Housefather noted that Dr. Geist point out that the bill is not about journalism. Does Skok believe this bill is about journalism?
Skok responded by saying “yes”.
Deegan was asked the same thing and he said “yes”. He then said that Dr. Geist should read Section 21a and said it’s right in the legislation (that’s one way to completely miss the point).
Chartier was asked the same question and he responded “yes”. This bill only has to do with journalism (no it doesn’t). It is the defence of journalism (it’s the defence of legacy media corporations and the status quo of yesteryear). It is the health of journalism (quite the opposite) and it is the raison d’être of journalism (leeching off of another unrelated business model and stealing money is the purpose of journalism? Since when???) It is nothing other than that. When he hears that all of the major companies are going to take all of the revenues (not what was said) because of this bill and that the small companies will not benefit, he is part of the small companies (no you are not). He needs this revenue (for a Porsche?). His team mates and employees need to be compensated by this type of bill (try making money yourself, ya dolt) and we represent 200 journalists (proof that you aren’t a small organization) all over Quebec and all producers in Quebec would agree.
Housefather then turned to Skok and said that there is a lot of myths about the bill. There is a myth that this will stifle innovation (not a myth, that is a fact). Does Skok believe this will stifle innovation?
Skok responded saying that this bill helps innovations exist (no, it removes the need for companies to innovate until the independent revenue streams dry up, making them subservient to the government). He claims that this is about re-litigating the past (the witnesses in question said no such thing), this isn’t about re-litigating the past, these deals have already been struck (ironically without the need for legislation). This has already happened. Google and Meta did not have to strike these deals – they are not link tax deals (this is the very definition of a link tax) – just licensing deals. They didn’t have to do that, they picked their winners already. What this bill does is that it helps to level the playing field (no, it allows the government to pick additional winners and losers, making the situation worse) and preventing those winners from getting a distinct advantage.
Housefather commented that another thing he keeps hearing is the compromising of journalistic independence. Will this compromise the independence of you and the people that work for you? (yes)
Skok responded that it does not and he personally recused himself of any coverage about this bill in September of 2020 when he found out he would have to be involved in this (no worries, leave it to the other journalists in your news rooms to act as cheer leaders). He doesn’t know what they report on, but sometimes they report on things that actually hurt his own personal interest (You know or you don’t, simple as that).
Housefather forwarded the question to Deegan. (the answer is still yes)
Deegan responded not at all. If General Motors were to run an ad in the Globe & Mail or the Toronto Star – he means if someone from GM were to phone up the Globe and said ‘hey I don’t like your coverage. I’m going to pull my advertising’, he thinks the publisher would tell them to go take a hike. (I’ve personally worked in media and that is absolutely not what would happen. Based on my personal experience, if the advertiser is paying big bucks, publishers, especially smaller ones – will bend over backwards to keep things smooth with the advertisers – even to the point of compromising their integrity as journalists. If a huge portion of revenue risks leaving the company – especially in this day and age – they would ask the advertiser how high they should jump. Publishers may have many things, but a spine isn’t one of them.)
Chartier answered the same question and he said no, in no way whatsoever. There is always protection between owners of news companies. Why would there be any problems flowing from this bill? (You are the same companies going to the government, cap in hand, and complaining that you are on the verge of bankruptcy. You tell me how money isn’t a problem.)
Champoux then said that a poll said that 90% of Canadians believe that something must be done to help media survive. 79% agree that web giants should share revenues with the media. Does Deegan think these Canadians are well informed?
Deegan replied that they are very well informed. He said that they put this question to Canadians with all political affiliation and they agree that local journalism is important and requires legislation to support journalism (that alone makes such a statistic sketchy at best. The Union of Grilled Cheese Sandwiches agrees that you should eat more grilled cheese sandwiches).
Champoux then asked if they need to negotiate with web giants.
Deegan responded that they want to have a collective with all sized news outlets in Canada. We are all stronger together.
Julian asked if C-18 will support weekly newspapers.
Chartier responded that they will manage well with C-18. Everyone is forming blocks and he is convinced that everyone will take advantage of these agreements. He says he’s heard concerns about the bill, but he believes it will help journalism across Canada and foster a healthy democracy.
Julian asked Skok if there are any improvements or amendments he can suggest to the bill.
Skok responded by suggesting that results of deals be shared with arbiters in real time as opposed to after a year to ensure consistency with all deals.
Kevin Waugh noted that one of the things he’s witnessed is CBC pilfering talent from the newspapers across the country and it’s going to continue with this bill. He says he’s going to tell them right now that if you don’t think that the CBC, which develops little to no talent on their own because they just pilfer from mid to lower newspapers in this country – and that is an issue that this bill is going to deal with. He turned to Deegan and said that he knows his statement is correct and it’s going to continue with this bill going through and it will continue even more. We are going to get reporters with little or no experience put in rural Canada because there are no reporters. He asked for his thoughts on this.
Deegan responded that it is a huge problem with the CBC in terms of pilfering talent. Local papers develop talent. Waugh knows this, he has his background and knows this first hand. they take them and they are making far more money with the CBC. It’s a big issue. That is why he thinks it’s important that they have this legislation so they can be on a more firm commercial footing. He said that everyone of the committee look at cutting off advertising for CBC programming. They are competing against them and they already got a $1.1 billion leg up on them and they are competing with them for advertising. That’s not fair, that’s not right.
Waugh then asked Dr. Geist or someone who can explain to him that the Mooseman said that this is worth a lot of money to local, independent owners. What can the owners of the Mooseman World Spectator expect from this deal? Is it $5,000 per year? Is it $10,000 per year? Is it $100,000 per year? If he’s got two employees in the news room, he is eligible. He doesn’t have a figure that he can take back to this independent news company.
Dr. Geist responded that he doesn’t think anyone can give him an exact number because he doesn’t think anybody knows at this stage and we certainly don’t know what people are getting in Australia, either. Sims might, but the general public certainly doesn’t have access to this kind of information. There is a great deal of secrecy associated with that system – at least what’s in terms of what’s available publicly. Here is the two things we do know:
One, we know that the businesses will effectively be forced into participating in this. Why? Because, as mentioned, they are competitors to the CBC and others are in. So, you can’t compete effectively. There are dozens, if not hundreds, of smaller independent media organizations, often digital first, in local communities, there are often times thriving and they are going to struggle to not participate because they are competing against those that are taking the cash.
Dr. Geist responded to Deegan that if he were to continue with Section 27(a), it does mention QCGO’s and then there is an important word. It’s “or”. The “or” gives you (b) which sets a low standard for accessibility to this program in which there are simply no standards.
Gerson chimed in and said that she would like to point out that under the qualified journalism organizations like The Line don’t qualify because they are owner owned. They are owned by two people and they produce their own content. Because they are the only two journalists working at that organization, and they own the organization, they don’t qualify for this. So, this is one of those issues that stifle innovation because it means that a lot of the startups that are created by the journalists themselves won’t qualify until they reach a certain mass. It makes it harder and harder to compete. That’s something that could be addressed.
Tim Louis commented that there are a number of small news outlets in his riding. They are concerned about being part of the collective negotiations with these tech giants. He asked for statistics about how the small outlets in Australia are doing.
Sims responded that the outlets are doing extremely well. He can’t share any information, though. He claims that digital natives also benefited from the Australian Code.
Louis responded that this is very comforting. He asked that if that if outlets are doing well, can he see the trends of outlets closing not only cease, but also address news deserts. Is that a possibility?
Sims responded that they are going to get growth in smaller publications. There is just no doubt.
Louis commented that C-18 is just one of the tools in the governments tool chest to support journalism. He asked about other tools available.
Deegan talked about the budget.
The hearing then concluded.
Concluding Thoughts
so, after witnessing that, I have to say that the committee process here was a complete and very sorry joke. This was supposed to be a study of the bill. While Dr. Geist and Gerson tried to steer the conversation back to the actual contents of the bill, it seemed like everyone else in the room was much more interested in scoring political points. I’m not at all surprised that Housefather offered the biggest example of scoring political points because this is far from the first time he perpetrated that. Because of what I witnessed, and this is at least the second hearing at the House of Commons I’ve witnessed that, I am failing to see the point in offering an in-depth analysis at this level in the future because I’m not sure the value I could extract from it is worth a 9,000+ word rundown and analysis.
Further, the “journalists” present (not Gerson for clarity) in the hearing do offer an incredibly strong case for why trust in the media is at an all-time low. In their responses, they warped and contorted and mislead on what the criticisms actually were and machine gun blasted false statements everywhere. I didn’t know them before the hearing and I don’t think I would trust them ever again with anything they publish.
What I witnessed with those “journalists” upsets me greatly. I consider myself a journalist first and foremost. I also perform analysis of various items such as proposed bills. People who look at that hearing are going to conclude that all journalists are lying weasels and scumbags. If what people witnessed in these hearings are the only exposure to how journalists operate, I wouldn’t actually blame them. In fact, for me, it actually confirms why I have been able to make a 17 year long career cleaning up after all the stupid messes they have left behind where I have to go back on stories and fix the crap they left behind.
The problem, however, is that I don’t think of myself as a lying weasel and scumbag. I think of myself as earning the title of being a journalist every single day I work on news articles, long form analysis, and summaries. I look at the facts, I refuse to play partisan games (as so many other major outlets do), and judge the story based on the cold hard facts – even being open minded to the idea that I may be wrong on something. It’s simple and straight forward, but it is my job. Seeing others pretending to have the same title put what they perceive as business interests ahead of journalistic integrity like that is disgusting.
People are going to look at these hearings and conclude that if those journalists act that way, then maybe I have my own agenda too. The simple truth is that I look at the world today through the lens of digital rights and how they may be impacted by what is going on. Bill C-11 and Bill C-18 is no exception – and lately, I feel like I’ve been typing my fingers off non-stop for the last month because of all the shenanigans the government has been up to. Because of incredibly stupid stunts like this, people are going to be encouraged to see me through a political lens despite my best efforts to judge all political parties equally. Something along the lines of, “Oh, he’s against C-18, he must be a card carrying Conservative” even though that is far from the truth. It truly sucks, but it is getting harder and harder to prove my true political independence because of the gong show I just witnessed. I truly believe that the journalists (again, not Gerson) that I am referring to in this hearing should be ashamed of themselves.
Now, on a different note, I wanted to address the issue of integrity with respect to payments. By it’s very nature, Bill C-18 will make it so that outlets will depend more and more heavily on government mandated subsidies (sometimes referred to as media bailouts) and payments from platforms. The natural business decisions will move away from trying to maintain existing revenue streams – something that the outlets themselves have so vigorously said is drying up. What do you think is going to happen when the percentage of revenue from platforms and government keeps going up and up? If outlets reach 90% of revenue from those two sources, if Google or Facebook later decides to actually pull out, then those outlets will get wiped out overnight with no safety net at all. This is what critics like myself mean by dependence and integrity. As Gerson so spectacularly points out, you are setting yourself up for commercial failure.
Some have asked what the actual solution is in all of this. The real solution is to collectively build up a separate ad network and actually provide an advertising competitor to Google. The more you can financially distance yourself from something like Adsense, the better. Plus, you will be able to rely on an ad network based on the community instead of depending on the big money of Google or Facebook. Again, addressing another grievance of these outlets. If you well and truly have that attitude of holding tech platforms accountable, the first thing you need to do is create that financial firewall to limit any potential retaliatory measures. Bill C-18 does exactly the opposite of this and plays directly into Google and Facebook’s hand.
So much attention was focused on the Australian Code like it came about in a wholesome, totally sensible manner. The truth is that the genesis of this code came from a failed gambit by smaller Search engine player, Microsoft. Microsoft felt that they could manipulate the greed of publishers by turning them against their big competitor, Google. The gambit was that if they can increase the cost of doing business for Google, then they could get a competitive advantage over Google in Australia and, in turn, with all their hard work, get a nice sweet sweet deal with publishers later for all that loyalty they showed. Well, you know what they say about honour among thieves…
First, Google and Facebook manipulated the greed of the publishers again by concluding that if they can increase the cost of doing business in their sectors, then all competition will get killed before they even start. That is the overwhelming consensus among observers were when Google and Facebook caved to the Australian Code. This gave the ultimate sign that Microsoft’s gambit backfired. To add insult to injury, the publishers in Europe, where the link taxes were spreading, turned on Microsoft and demanded more payments for linking anyway, royally screwing over Microsoft to the pity of no one. After all, they brought this whole thing on themselves by dreaming up this whole scheme in the first place.
Throughout all of that, the big platforms have been playing media players like a fiddle – and doing it so well, that media outlets are completely oblivious as to what is even happening in their own businesses in the first place. From their standpoint, it looks like they are content with the idea of money flowing in no matter where it comes from. The reality is that it does matter and if this bill is implemented, and in three years from now, anti-trust lawsuits hit a platform like Google or Facebook, media outlets are literally one lever pull away from having who knows how huge of a chunk of money pulled out from under them. The publishers will only have themselves to blame because they themselves shifted their revenue away from traditional streams to “get money from Big Tech”. Who will report on those court hearings at that point?
What’s more is that there were plenty of times throughout the hearing that other players will be practically forced into these deals. Sure, an outlet like ours could theoretically resist, but so many others who don’t have a clue what is happening underneath all of these negotiations will just happily jump on board with these deals, making it harder for the remaining players to survive. It is a system that is designed to make outlets put themselves in a very precarious situation. I shudder to visualize a platform having the power to shut down almost all of journalism overnight, but that is precisely the scenario that we are heading towards.
So, I may offer some thoughts on future hearings, but for right now, I don’t ever want to make another in-depth analysis like this of Heritage Committee hearings ever again. I feel like these last three days going through this was almost a complete waste, better spent on other stories.
Drew Wilson on Twitter: @icecube85 and Facebook.
