Making them pay

As the world watched a battle play out between Facebook and Australia over legislation that would force web giants to pay to link to news content, Ottawa signalled that similar legislation is on its way in Canada. The question is how it will go about it.

In Australia, the government's legislation is designed to force Facebook and Google to pay a negotiated fee to news organizations. If negotiations fail, the law imposes mandatory and binding arbitration. Facebook at first reacted to the legislation by blocking access to news content in Australia. It agreed to restore news pages days later to after the government agreed to amendments that would give the tech companies more time to reach deals.

In a readout regarding a February phone call with his Australian counterpart, Scott Morrison, Prime Minister Justin Trudeau spoke of growing cooperation on the regulation of online platforms. They agreed to "continue coordinating efforts to address online harm and ensure the revenues of web giants are shared more fairly with creators and media."

Catherine Lovrics, a partner with Marks & Clerk in Toronto, says that other countries, including France, the UK, Belgium, and Norway are also looking at similar measures.

"Big picture, the issue is really ensuring that we have professional journalism that is viable and funded," Lovrics says. "What policy remedy we ultimately see in response to that issue remains a live question and whether or not it's the big platforms that wind up subsidizing [journalism], be it through a copyright collective or some other mechanism."

Lovrics adds that the copyright mechanism should at least be researched and investigated, along with other alternatives.

Google has been pursuing royalty deals with different news organizations with its Google News Showcase platform.

University of Ottawa law professor Michael Geist, the Canada Research Chair in Internet and E-Commerce Law, says that he suspects the government's preferred "made-in-Canada approach" is likely to resemble the deal the Australian government struck. Another option is that proposed by Conservative Senator Claude Carignan who tabled a bill that would use the Copyright Act to force concessions from the tech giants.

"[The government wants] to be able to walk away saying Facebook is making a contribution, and Facebook wants to be able to walk away saying that they will not pay for links, and that they get to determine what that contribution looks like in the form of a licensing agreement or other contributions," says Geist.

Geist says a legislative solution could resemble something along the lines of the government's overhaul of the Broadcasting Act which established a new licensing system for internet services, while leaving the specifics to a regulator or the market.

Carignan, a former professor at the Université de Montréal's faculty of law, says that his bill, S-225 relies on the Copyright Act because there is already a system within the framework to force a negotiation. In the absence of a good-faith negotiation, it's also possible to impose a royalty.

"It's the same spirit of the Australian legislation, and the same effect because you could force a result," says Carignan. "It was easier to use a framework that is already in place, and it's easier to [extend] this protection to other rights of intellectual property. It's also a question of jurisdiction with respect to the civil property, and in the Senate, I can't impose a tax. The Copyright Act was the perfect way to do it."

"To the extent that people are calling this a link-tax, I think the [Senate] bill has anticipated that and created a carve-out for [hyperlinks]," says Lovrics. "I think the challenge with linking is that there are different types of linking. You can link where it's just a URL and no content appears, so you're driving traffic to the original source. Canadian case law says that's not a publication."

The Supreme Court of Canada's 2011 decision in Crookes v. Newton declared that hyperlinks do not count as a publication in a defamation law context.

"In my mind, the long-standing position in Canada is that a hyperlink is just a more technologically sophisticated citation, and it points someone in the direction of work, but it is not a republication of that work," says Geist.

"Services like Facebook and Google are quite explicit about the fact that they do not publish the full work," says Geist. In its negotiations with publishers, Google tries to make that distinction so that they don't pay for links, he adds. "But if they get a sufficient amount of value-add, it's something they might be willing to license."

Carignan says that in his view, hyperlinks are just the link, but when there is more information than just the link, such as a summary in Apple News, that would trigger payment under his bill.

"That's not a hyperlink – it's more than that, and that's something that they can deal with in the negotiation," says Carignan. "There could be a price for this summary, or a price for a full article – they could establish a fair value for what type of information they are able to see."

Geist argues that the carve-out in the bill effectively excludes both direct links and embedded ones that populate with images or blubs, given that the bill only applies to "the work or a substantial portion of the work."

"I don't think what Facebook or Google use with respect to the underlying works would qualify, and even if they did, you'd get into issues of fair dealing," says Geist. "I don't think the blurbs that appear for content on Facebook or the snippets that appear on a Google news service can credibly be characterized as a substantial portion of the work."

That's because Facebook is not curating the content or posting full copies of the content. It is merely enabling users to post links to the content that refers it to the publication. It's also what publishers want, especially as they themselves post the links to their Facebook pages.

While the large platforms have had success with digital advertising, traditional publishers have suffered. says Geist. But the problem is that their success has very little to do with the news content that is shared on the platform. "It's content that is very valuable to the publishers and just not that valuable to social media companies or search companies, and has really nothing to do with the shift in ad revenue," says Geist.

Geist says that interference by governments in the marketplace over this issue is having real-world consequences, because web giants have reached deals with some of the smaller publications. Bt the larger ones don't want to play ball while claiming they are not being paid, as they call on the government to force payments.

Even so, Carignan says he has plenty of support from both senators and MPs for his bill. A lot has to do with the timing of his tabling the bill.

"It's something clearly that the government will have to act on, and I hope that we will be able to work together to solve the problem, even if it's not with my bill," says Carignan. "It's really an urgent situation."