Moved second reading of Bill S-225, An Act to amend the Copyright Act (remuneration for journalistic works).

He said: Honourable senators, I rise today in support of Bill S-225, An Act to amend the Copyright Act, at second reading. With this bill, I hope to restore the balance between traditional media and digital platforms and especially to make sure that content producers receive fair compensation, which will be paid by those who are now freely benefiting from the content.

The crisis that traditional media outlets have been facing for over 10 years does not seem to be subsiding on its own, and our governments are dragging their feet. Digital platforms receive advertising revenue without paying compensation or royalties to content producers. This financial transfer has serious consequences for the survival of many daily newspapers and traditional media outlets. We are powerless against this devastation, and all we can do is to lament it, because the disappearance of many enlightened and verified sources of information can only hinder Canadians’ proven knowledge.

It’s often said that information is a pillar of our modern democracies. Credible information sources have to battle the phenomenon of fake news, which is rampant on social media. This problem is truly pernicious because these social networks are poaching traditional media’s ad revenue. As a result, traditional media are suffering mightily because they have to keep producing relevant, fact-checked content, but they don’t get the revenue generated by interest in their products. This lopsidedness in the media ecosystem makes it impossible for the media to play their essential role in our society, which is to fully and accurately inform the public.

It’s estimated that the ad revenue generated from print media content by GAFAM — Google, Amazon, Facebook, Apple and Microsoft — is between $200 million and $600 million per year in Canada, and most of that money flows to the United States.

In Ottawa, the Trudeau government still hasn’t come up with a framework that would enable print media to collect a portion of the revenue their content generates.

On February 17, the same day I introduced my bill, a group of Quebec publishers sought to bring the subject to Prime Minister Trudeau’s attention by publishing an open letter and full-page ads, primarily in newspapers.

The message that these publishers had for the Prime Minister boiled down to this, and I quote:

We are being deprived of our fair share of digital revenue. . . .

We urge the government and the Parliament of Canada to take action as quickly as possible. . . .

The letter was co-signed by the management of La Presse, the Journal de Montréal, and the Journal de Québec, among others, as well as some media cooperatives that include Le Droit, Le Nouvelliste, Le Soleil, Le Quotidien, La Tribune and La Voix de l’Est.

That message says it all, and I believe that it has already been proven that print media is in crisis. That is certainly true in Canada, but also in all of the other countries of the world. For example, according to a daily economic newspaper, traditional media in France has been completely upended. In the context of an economic crisis and a technological revolution, print media, television and radio outlets have felt the full impact of the rise of GAFAM. A study conducted by the consulting company BearingPoint for the French ministry of culture and the Conseil supérieur de l’audiovisuel contained some astounding statistics. Between 2000 and 2017, the advertising market for communications and media went from 12 billion euros to 10.3 billion euros, but revenues for traditional French media, such as television, print media, radio, signage and cinema, dropped by 43% to 6.7 billion euros. During the same period, the share of internet advertising revenue, mainly for Google and Facebook, went from basically 0% to 35% and reached 3.6 billion euros.

As I mentioned earlier, it is estimated that between $200 million and $600 million in ad revenue in Canada is being redirected to GAFAM. That’s huge, especially when you consider that this ad revenue is based on content produced largely by traditional media. What’s wrong with this picture? This is akin to a wine producer who toils for an entire season, pays wages, buys supplies and puts in the effort, but his lettuce-growing neighbour gets to sell a big portion of his bottles of wine without paying him any dividends. It doesn’t make sense, but that’s what is happening with the traditional media, whose journalistic content is literally being skimmed off.

Australia recently passed a law that requires digital platforms to come to a revenue-sharing agreement with print media. The government essentially proposed to adopt a media code. Its bill aims to force digital platforms, mainly Google and Facebook, to pay media outlets for their content or face heavy fines. This is one of the most aggressive initiatives against the two web giants, which are fighting it. This “binding code of conduct,” which is supposed to govern relations between the financially troubled media and the giants that dominate the internet, comes after 18 months of negotiations that have failed to bring the two sides together.

Beyond the obligation to pay for content, this “binding code of conduct” deals with issues such as access to users’ data, the transparency of algorithms, and the order in which content appears in the platforms’ news feeds and search results.

You have probably heard that GAFAM and their ilk did not appreciate this very much and went so far as to remove the country’s news from their digital platform. The Australian government stood up to these web giants, leaving them no choice but to agree to negotiate and reach an agreement. A few days before passing the bill, the Australian government introduced a new provision instating a two-month period to promote negotiations between digital media and traditional media before the code is enforced and an arbitrator rules in favour of either party. Australia became the first country to bring in legislation to restore some balance between the digital platforms and print media.

In March 2019, the European Union adopted new copyright rules for the internet. Sharing snippets of news articles will still be allowed, since this is specifically excluded from the scope of the directive. However, the directive also contains provisions to prevent news aggregators from abusing this exception. For example, Google News can continue to display snippets in news feeds, as can Facebook when articles are shared, provided that these snippets are “very short.”

France was the first European country to implement this directive through Law No. 2019-775. In response to this legislation, Google unilaterally decided not to display article extracts, photographs, infographics or videos unless publishers granted Google authorization to use them free of charge.

In April 2020, France’s competition regulator, the Autorité de la concurrence, ordered Google to negotiate with publishers and news agencies regarding how much they are owed under the country’s legislation on copyright and related rights for the reuse of their protected content. I want to share an excerpt from this document:

Following a complaint lodged in November 2019 by several unions representing press publishers (Syndicat des éditeurs de la presse magazine, l’Alliance de la presse d’information générale) and Agence France-Presse (AFP) of practices implemented by Google on the occasion of the entry into force of the law of 24 July 2019 on related rights, the Autorité de la concurrence today orders interim measures in the context of the urgent interim measures procedure. The Autorité found that Google’s practices on the occasion of the entry into force of the related rights law were likely to constitute an abuse of a dominant position, and caused serious and immediate harm to the press sector.

It thus requires Google, within three months, to conduct negotiations in good faith with publishers and news agencies on the remuneration for the re-use of their protected contents. This negotiation must retroactively cover the fees due as of the entry into force of the law on 24 October 2019.

The Autorité de la concurrence imposed emergency measures to allow interested publishers and news agencies:

 . . . to engage in negotiations in good faith with Google in order to discuss both the terms of the re-use and display of their content and that of the remuneration associated to it.

On July 3, 2020, Google appealed the Autorité de la concurrence’s decision. As you can see, honourable colleagues, these are huge issues hinging on the staggering profits web giants are unwilling to share with traditional media even though they created the content.

However, I believe that these two regimes open the door to multiple negotiations between the big five and traditional media, which means more opportunities for things to get out of control.

Let’s talk about Canada now.

In January 2020, the Broadcasting and Telecommunications Legislative Review Panel presented a report entitled Canada’s Communications Future: Time to Act to Minister Bains and Minister Guilbeault. The report’s introduction includes the following recommendations, which I will quote:

regulatory intervention to ensure that creators of news are compensated for the use of their original content by online platform providers;

Section 3.4.2, entitled “Modernizing the CRTC’s regulatory framework,” is also very interesting. Here’s one of the things it says:

There is also an uneven playing field between social media platforms and news media organizations. A very small number of dominant social media platforms are a critical source of audiences for news media organizations. As a result of the imbalance in bargaining power, news content creators are unable to individually negotiate terms over the use of their content by social media platforms. The CRTC should also have the jurisdiction to determine or approve terms of trade where it considers that this is necessary to address an imbalance of power in news content.

The Trudeau government has been in office since the fall of 2015 and nothing has been done yet. That is incomprehensible because this is a major issue. If a free and democratic society is based on a strong free press, it must also be based on a fair and level playing field. What is happening right now in the news world is completely unbalanced and unfair.

The bill seeks to create a framework so that traditional media are compensated for their journalistic material that is collected and disseminated by GAFAM without financial compensation. It will create a new right, the right to compensation for journalistic works.

In amending the Copyright Act, I’m suggesting that the existing legislative system be used to protect and administer the new right to remuneration for journalistic works. By simply adding journalistic works, we can continue to use a known framework that has proven to be effective for other copyrights in Canada.

The bill doesn’t create a new copyright. It creates a new right to remuneration for journalistic organizations for the reproduction or publication on a digital platform of journalistic works owned by them. This remuneration right is separate from any other right granted by the Copyright Act. The remuneration that the bill seeks to provide would therefore be in addition to any income obtained by these organizations from their copyright.

Under this legislation, journalistic organizations may join together to form a collective society. This society, once recognized by the Copyright Board, will undertake negotiations with the platforms designated by the government, that is, GAFAM.

What exactly is a collective society? Let us first talk about copyright. Copyright is one of the three main types of intellectual property; the other two are patents and trademarks. Copyright seeks to maintain an appropriate balance between, on the one hand, encouraging creativity and fighting infringement and, on the other hand, ensuring the exchange of ideas and knowledge and protecting freedom of expression. Copyright does this by governing certain business practices applicable to specific intangible assets. Copyright grants the owner of a work the exclusive right to reproduce, execute or perform in public and to publish the entire or significant part of the work or, if you will, the “economic rights.”

The economic rights allow the owner to control the commercial use of the work for the purpose of earning revenue. The owner can earn revenue from the work by assigning one or more copyrights or granting a “licence” to a third party in exchange for royalties. To prevent copyright owners from appropriating a part of public discourse and thus preventing the creation of future works, the law imposes limits and exceptions to economic rights. One of these limits is the term of the rights. In Canada, economic rights generally last for 50 years after the death of the author or publication of the work, depending on the case.

Nevertheless there is an exception to this rule: Economic Action Plan 2015 Act , No. 1, extended the term of copyright protection for a published sound recording and a performer’s performance fixed in a published sound recording to 70 years.

It may not be very practical for a user to obtain permission to use several works. For example, take the case of a radio station that broadcasts dozens and even hundreds of songs in its daily programming. In this case, the station’s management would have to obtain permission for each holder to play each of the musical works. This would result in enormous costs that in the long term would penalize the copyright holders. With such conditions, it is likely that few broadcasters would agree to pay the amounts and make the effort required to add these protected works to their programming.

In order to reduce these transaction costs, the Copyright Act implements a collective copyright management regime in certain sectors. Copyright owners can thus entrust the administration of their rights to a collective society. To ensure the regime’s effectiveness, many of these societies hold a monopoly over collective management in their respective sectors. Since these monopolies may encourage anti-competitive practices, the act gives the Copyright Board of Canada the task of arbitrating the relationships between the collective societies and the users. The board is made up of independent experts and it establishes the royalties that should be paid for the use of works administered by a collective society.

Under my bill, print media will be able to form a collective society, which should then seek accreditation from the Copyright Board. The collective society will establish its tariffs and have them approved by the board. In order to establish the royalties that should be paid for the copyrights administered, the collective societies can file a proposed tariff with the board.

If GAFA refuse to negotiate and come to an agreement, these web giants will simply no longer have the authorization to publish news articles on their platforms, since they would be facing sanctions for copyright infringement of journalistic works. It would therefore be in their interest to negotiate and come to an agreement with the collective society.

In the event of a disagreement, either party can request that the board rule on the dispute. If the parties are unable to agree on royalties to be paid with respect to rights or are unable to agree on any related terms and conditions, the collective society or user may, after giving notice to the other party, apply to the board to fix the royalty, other than royalties referred to in subsection 29.7(2) or (3) or paragraph 31(2)(d).

I want to point out that print media outlets will not be required to form a collective society.

Clause 26.2 of the bill authorizes the Governor in Council to designate a digital platform provider to be responsible for remunerating journalistic organizations for the reproduction or publication of content on said platforms.

As such, the bill is no different from the Australian system. The Senate could amend the bill to establish one or more objective criteria under which these providers would be designated, but the specific context in which the bill is presented would lead to a similar result. These criteria would be developed to include the small number of providers that are already recognized as being at the heart of the problem, such as Facebook, Google and Twitter.

On March 29, Kevin Chan, the head of Facebook Canada, told the House of Commons Standing Committee on Canadian Heritage that Facebook would try to avoid a repeat of the news blackout the tech giant imposed in Australia, provided that the country’s legislation would not compel the company to do so. That is essentially a veiled threat. He was referring to the fact that Facebook blocked all news on its Australian platform for five days last month in response to a bill that would have forced the web giants to pay royalties to news media for links to their content.

However — and I had confirmation of this just recently — countries must act as a unit and with determination to bring web giants into line. To do that, a concerted action movement is emerging. I recently got a call from Berlin, from a media and technology company operating in over 40 countries. This company is currently trying to create a network of a very large number of traditional media outlets across the globe on the issue of electronic media. In their view — and I share it — sheer numbers will be able to put enormous pressure on electronic platforms. It is therefore essential that as many legislatures as possible around the world pass laws to govern giants like GAFA. Otherwise, one of the pillars of our democracies, the print media and traditional journalism as a whole, will be seriously weakened.

In closing, honourable senators, you will agree that this issue is important and has generated a great deal of commentary. This bill will give us the opportunity to hear from very interesting witnesses, who will further enlighten us on all aspects surrounding the issue of electronic platforms and the use of content produced by traditional media.

I therefore urge you to support this bill at second reading so it can be studied in committee as soon as possible.

Thank you for your attention.

Honourable senators, let me attempt brevity.

Senator Carignan, I’m excited about your bill. I agree with the goal that you seek to achieve.

I have a specific question about the arrangements that news media have now in terms of content sharing. For example, a number of national newspapers collectively own and operate a press service that then feeds stories to them. There’s a contractual arrangement. The same kind of contractual arrangement applies to news integrators and image banks, like Getty Images.

I’m interested to know whether or not the tariff/rate structure would have an impact on the current rates that have been negotiated and that operate for these sharing services. Thank you.

In fact collective societies could be created and, if they wish, be accredited. These societies could negotiate rates based on their interest and their own collective. They could also establish their negotiation strategy and identify what might represent equitable compensation. They could make the request to negotiate with the members of GAFA, members of corporations or digital platforms that will be identified by the Governor in Council. Presumably the Googles and Facebooks of this world will take part.

In the event of a disagreement, the dispute will be settled by the Copyright Board of Canada. It will all be part of the negotiation. The bill seeks to create this framework for negotiation between the parties to be able to come to an agreement that will be adapted to each situation, including the one you just described.

Thank you, Senator Carignan.

This is complex, and I’m pleased to see you move forward with this and with multiple platforms. I’m going to come at it differently.

You mentioned musicians, and that artists can join collectives but they don’t all have to. I’d be interested in knowing more about how you see the intersection between creators of all disciplines — artists of all disciplines — working with the media on these large electronic platforms.

We’ve seen what’s happening internationally as a result of works going up on the internet. I would like a little more of your thoughts, if I may. I’m sure we’ll have other times to discuss it in greater depth.

In fact, it is the collective society. As you know, for writers, for example, depending on the different works or the different artists, a collective of common interests is created. It could be news outlets, print media or groups of content producers, and it will be up to them to get accredited and enter into negotiations for the artist or person producing the works. All of that is included in the contractual framework with the media outlet or the newspaper. It is set out in the remuneration framework, but there is nothing stopping the parties, during the negotiation of the artist’s or journalist’s remuneration, from negotiating content or royalties from this publication or in their name when the framework and agreements are created.

Once this is all put in place, I believe that different content producers — a journalist for example — could negotiate some of the royalty into their compensation. Anything is possible at that point.