US tech giants Google and Facebook are trying to put maximum pressure on Canadian parliamentarians as Bill C-18, the Online News Act, begins its process in the Senate after passing the legislative process in the House of Commons in December. . The bill would require "digital news intermediaries" with "significant imbalances in market power" or "digital news intermediaries" with "significant market position" to negotiate compensation with Canadian news companies when those intermediaries make content of digital news available to the public.
The bill is based on similar legislation passed in Australia, which brings together two major digital platforms to reach compensation deals with most of the country's large and small media outlets. Although not mentioned in C-18, Google and Facebook are the most likely direct targets of the legislation, not because they are American companies, but because of their size and market dominance.
In recent weeks, US digital giants have secured the support of the Office of the US Trade Representative to raise concerns about the bill, and even the powerful Senate Finance Committee has placed US C-18 on its list of Canadian and trade complaints. Mexico in a recent letter to US Trade Representative Katherine Tai. Last fall, your industry association, the Computer and Communications Industry Association (CCIA), produced an amusing White Paper comparing the role of Google and Facebook in terms of market dominance to that of Canadian maple syrup producers. His arguments were entertaining, if not convincing.
The tech giants must be feeling the pressure now, as the Trudeau government shows no sign of backing down from the C-18. It passed the House with the support of the PRD and Bloc and is unlikely to see much change in the Senate. The platforms are also concerned about the growing number of calls for similar legislation in the US, which the initiative wants them to stop. C-18, US legislation with features similar to the Journalism and Competition Protection Act (JCPA), nearly became law in last year's empty session of Congress.
It was attached to the National Defense Appropriations Act (so almost guaranteed to pass) and withdrawn at the last minute after a frantic lobbying campaign in Washington by the tech giants. Regardless of their success this time, the JCPA will almost certainly be back. The passage of C-18 in Canada would make it much more difficult for Silicon Valley to resist similar provisions in Congress.
USTR's latest letter to Tait from the News/Media Alliance, a Washington-based industry association representing more than 2,000 news companies, made clear that US interests will not always align with those of Google and Facebook. . . Publishers of the United States of America.
In Tain's letter, "numerous studies, reports and investigations have clearly shown that platforms impose unfair conditions on (some large) news publishers and other players in the online ecosystem, and how they benefit most. Advertising dollars digital media and user data, including news, including publishers," the letter says. "Many large companies are incorporated in the United States that engage in these harmful practices and are therefore affected by the laws...States do not. The laws discriminate." In conclusion, "we ask that one sector of the American economy not be favored at the expense of others".
The lobby game is active. The tech industry is trying to recruit the US government to fire warning shots across Canada's bow, looking for arguments to turn the ship around. The American news industry is in decline. The threat of trade retaliation is just another trick in Big Tech's bag of tricks, but it won't happen. First, the Trudeau government will ensure that the legislation is fully compliant with the new NAFTA (known as NAFTA in Canada and USMCA in the US).
Canada can achieve what Australia has achieved without using non-discriminatory trade practices. Second, US interests are greater than those of Google and Facebook, both on C-18 and on other issues such as dairy. They will choose their problems carefully. The sword may knock, but in that case it will return to its scabbard without shedding blood.
Hugh Stephens is an Executive Fellow in the School of Public Policy at the University of Calgary.