Backgrounder: Final regulations for the Online News Act

News Release

GATINEAU, December 15, 2023

Today, the Government of Canada released the final regulations for the Online News Act. The Act aims to enhance fairness in the Canadian digital marketplace and to contribute to the sustainability of the Canadian news sector. It does this by establishing a bargaining framework for commercial agreements between the largest digital platforms and news businesses. This framework includes several safeguards to preserve the independence of the press.

The Act

The key objective of the Act is to encourage platforms and news businesses to reach voluntary commercial agreements to fairly compensate Canadian news businesses when news content is distributed on those platforms. Failing that, it provides for a mandatory bargaining process, backstopped by final offer arbitration.

The Canadian Radio-television and Telecommunications Commission (CRTC) is the arm’s-length body that oversees the bargaining framework established by the Act.

The Regulations

Draft Regulations were published online between September 2, 2023, and October 2, 2023, for public consultation. The final Regulations take into account feedback that was provided by stakeholders, including news businesses and associations, digital platforms, academics and observers of the news media industry, and the general public.

The Regulations establish the factors that determine if the Online News Act applies to a digital platform and when it is required to notify the CRTC that the Act applies to it. The Regulations also provide greater direction to the CRTC on how to interpret the criteria set out in the Act to determine if a digital platform qualifies for an exemption from the mandatory bargaining and final offer arbitration processes.[MG1]

The CRTC is developing its own regulations and procedures as part of administering the Online News Act, including, among other things, the exemption process, the code of conduct, the eligibility of news businesses, and the structure and conduct of groups of eligible news businesses.

Application

A digital platform must meet all the following thresholds in order to be subject to the framework:

• Earn a total global revenue of $1 billion (CAD) or more in a calendar year.
• Operate in a search engine or social media market involving the distribution and access of online news content in Canada.
• Operate in a strategic market identified above and have 20 million or more Canadian average monthly unique visitors or Canadian average monthly active users.

Together, these thresholds establish when there is a significant bargaining imbalance between a digital platform and news businesses.

The Act requires digital platforms to notify the CRTC if it applies to them. Regulations establish a timeframe of 180 days, which takes into account the time required for platforms to bargain with news businesses and seek an exemption without being subject to mandatory bargaining and final offer arbitration.

Exemption Criteria

In assessing whether a platform has met the criteria for an exemption order, the CRTC must consider whether agreements submitted by a platform between a news business or a group of news businesses:

• provide fair compensation;
• ensure that an appropriate portion of the compensation be used to support the production of local, regional and national news content;
• uphold the freedom of expression and journalistic independence enjoyed by news outlets;
• contribute to the sustainability of the Canadian news marketplace;
• involve a range of news businesses and outlets; and
• ensure benefits to a significant portion of Indigenous and official-language minority communities and independent news businesses.

The Regulations provide more specific direction on how certain exemption criteria could be met.

Open call process

The Regulations require that, as a condition for the CRTC to make an exemption order, there be an open call process. The platform must publish a notice of the open call on its website for at least 60 days and request the CRTC do the same. It must also publish a list of respondents to the open call process and request the CRTC do the same.

Attestations

As part of the open call process, news businesses and news outlets must attest that they meet the eligibility criteria under the Act. When making an exemption order, the CRTC must only consider the impact of the agreements on news businesses and news outlets that have attested to their eligibility under the Act.

Fair compensation

The CRTC must consider an agreement fair if it provides comparable compensation for similar news businesses.

Appropriate portion

The CRTC must consider agreements as providing an appropriate portion of compensation for the production of local, regional and national news content if those agreements include a commitment to use a majority of monetary compensation to support the production of local, regional and national news content.

Protecting editorial independence

The CRTC must determine that agreements sufficiently protect journalistic independence if they include a commitment from platforms that:

• no retaliatory action will be taken in response to an editorial decision taken by a news business or news outlet;
• no restrictions will be placed on any effort by the news business or news outlet to protect its journalistic independence; and
• no interventions will be made in a news business’s or news outlet’s editorial process.

Sustainability of the Canadian news marketplace

In assessing whether agreements contribute to the sustainability of the Canadian news marketplace, the CRTC must consider the monetary contribution to sustainability laid out in the agreement as well as the platform’s share of the Canadian Internet advertising market.

For the search engine with the greatest share of Canadian Internet advertising revenues, the CRTC must interpret agreements as sufficiently contributing to sustainability if monetary compensation is CAD $100 million, indexed to inflation. This does not preclude the largest search engine from offering additional non-monetary contributions to Canadian news businesses.

Agreement with a single group of news businesses

Should a platform enter into an agreement with a single group of news businesses, the CRTC must consider certain exemption criteria as being fulfilled if two conditions are met: (1) the group remains open to any news business that responded to the open call, and (2) the agreement commits to equitable distribution of compensation among members of the group (based on the number of employees engaged in the production of news content). These conditions will help ensure that a range of Canadian news businesses across the country benefit from the compensation, including independent, local media and news businesses serving Indigenous and official-language minority communities.

In this scenario, to reflect the dynamics in the Canadian news marketplace, the total amount that can be received by broadcasters and CBC/Radio-Canada is capped. Broadcasters can receive no more than 30% of the compensation, and CBC/Radio-Canada can receive no more than 7% of the compensation.

Associated Links

• Online News Act
• Parliament of Canada – Bill C-18