Online News Act: Platform Rules and Exemptions

Summary#

These are proposed regulations that explain how the Online News Act would apply to large digital platforms, when those platforms must tell the regulator, and how platforms can win an exemption by striking voluntary deals with news outlets. The text was prepublished for public comment for 30 days and is a proposal, not final law; the Act received royal assent on June 22, 2023 and the rules are written to take effect on December 19, 2023 if adopted as proposed.

What it does#

• Defines which platforms are in scope. A platform would be captured only if it:
  • had total global revenue of more than $1 billion in the previous year;
  • operates as a search engine or social media service that distributes news in Canada; and
  • has at least 20 million average monthly unique visitors or active users in Canada.
• Sets the notification deadline. Platforms that meet the tests would have 30 days to notify the CRTC that the Act applies to them.
• Specifies how platforms can get an exemption from mandatory arbitration by showing they reached voluntary deals that meet certain conditions, including:
  • running a public open-call process for at least 60 days so news businesses can respond;
  • including a commitment that some of the money received by news outlets will be used to produce local, regional or national news;
  • agreeing not to take retaliatory or editorially interfering actions against news outlets;
  • offering “fair compensation,” interpreted as individual deals being within 20% of the average relative compensation across all deals submitted for an exemption.
• Provides a simple formula the regulator would use to judge whether the total money pledged “contributes to the sustainability” of the Canadian news market:
  • (platform global revenue) × (Canada’s share of global GDP, about 2%) × 4%.
  • The result is converted to Canadian dollars using the average exchange rate from the Bank of Canada for the prior year.
• Sets rules to ensure deals reach a range of outlets, by saying a request for exemption must not exclude certain groupings (for example, groups of 10 or more independent local outlets, 5 or more Indigenous outlets, or 10 or more official-language-minority-community outlets).
• Says the CRTC will publish which platforms are captured and will review exemption requests. The document also invites public feedback during the consultation period.

Who's affected#

• Large digital platforms and their operators (mainly big search engines and social media companies) that meet the revenue and user thresholds.
• News businesses of all sizes — national, regional, local, independent, Indigenous, and official-language-minority outlets — and groups or collectives that represent them.
• The CRTC, which will receive notifications, assess exemption requests, and publish decisions.
• The Department of Canadian Heritage, which drafted the proposed regulations and ran the prepublication consultation.
• Indigenous organizations involved in news, including Nunavut Tunngavik Incorporated (NTI) and others consulted during drafting.
• The public indirectly, especially news consumers who use platforms to find and read news.

Why it matters#

• The proposal aims to shift money toward Canadian newsrooms by forcing big platforms to negotiate or meet minimum contribution tests. That could help pay for reporting, including local and Indigenous journalism.
• It sets clear size and user thresholds so only the largest, most influential platforms are covered. That limits the rules to a small number of companies.
• The exemption rules encourage voluntary commercial deals while trying to protect editorial independence and require that funding reach diverse and smaller outlets.
• Small and resource-limited news outlets may need to join collectives to have negotiating power, so the rules try to make that easier.
• These are proposed regulations open for comment. They are not final; the CRTC will be responsible for applying them if they are adopted.