LILLEY: Feds tell tech giants to pay for news content or face fines

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The Trudeau government’s message to tech giants in Canada: Start paying news publishers, or we’ll make you.

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On Tuesday, the government unveiled its plan to bring together Canada’s news media companies and players like Google and Facebook to reach agreements on payments for use of content or face arbitration.

After looking at a number of options, including a heavy taxation and regulation plan, the Liberals decided to follow something close to the Australian model.

Last year, the Australian government introduced legislation that required tech companies to pay for news content. The move has seen deals signed with publishers big and small, resulting in hundreds of millions of dollars paid to journalistic organizations.

In Canada, Google and Facebook account for roughly 80% of all online ad revenue. In introducing his legislation, Heritage Minister Pablo Rodriguez said that Canadians often consume their news via social media platforms, consuming content those companies did not pay for.

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“They continue to profit from the sharing and distribution of Canadian news content without really having to pay for it. So, with this bill, we’re seeking to address this market imbalance,” Rodriguez said.

Executives at several tech companies — speaking on background — said they weren’t happy with the legislation, but it’s about what they expected. It’s also better than what they had been hearing could be coming when Steven Guilbeault was in charge of the heritage file.

Under Guilbeault, the government had been looking at options that included much more regulation and a direct tax on companies like Google and Facebook which would then be redistributed to news publishers.

While this plan has a lighter touch than what had been considered before last September’s election, it still leaves a bad taste for some on the tech side.

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“It’s still legislation,” said one tech executive.

Others complained about what they said was a lack of consultation on the content of the bill. While news publishers didn’t support the idea of a direct tax on tech giants being redistributed to them, the industry is, in general, supportive of this move.

Andrew MacLeod, president and CEO of Postmedia, the publisher of this newspaper, said that the government’s proposal was a fair one.

“We are very satisfied with this outcome,” said MacLeod. “I believe this is a turning point for our industry.”

News Media Canada, the industry association for newspaper companies in Canada, was also supportive.

“This legislation levels the playing field and gives Canada’s news publishers a fair shot and doesn’t require additional taxpayer funds,” said Jamie Irving, chair of News Media Canada.

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The legislation would give the Canadian Radio-television and Telecommunications Commission (CTRTC) the power to oversee the negotiations, enforce arbitration and even impose penalties of $15 million per day on tech companies that don’t comply. Chances are, given the Australian example, companies from both sides will quickly negotiate terms and abide by the agreement, but putting the CRTC in charge is worrisome.

This is an organization with no experience dealing with print or online news publishers and as someone who has spent more than 20 years working with and for broadcasters under the CRTC’s mandate, I can confidently say they don’t do a good job on the broadcasting side.

A purely private-sector solution where news publishers and the tech giants reached mutually beneficial agreements would have been preferable. That didn’t happen, though, so the government acted.

I’ll give the Liberal government in general, and Rodriguez in particular, kudos for going against their own instincts and taking a lighter touch in their regulatory scheme. What the government has put forward isn’t perfect, but it’s better than nothing and better than the Liberals’ previous plans.

It also gives smaller publishers the same backing as larger ones like Postmedia. In a world where we need more media voices — not fewer — that’s a good thing.