The role of News outlets in a functioning democracy cannot be overstated. They act as a crucial source of information, empowering citizens to make well-informed decisions, actively participate in civic affairs, and counteract the spread of disinformation. In regard to promoting the same, Canada has come out with a new law i.e. Online News Act, 2023¹, also known as C-18 Act. This Act was introduced in the 44th Canadian Parliament and was then passed by the Senate on June 15, 2023, and later, it received royal assent on June 22, 2023. At present, the Act is undergoing public consultation and it is expected that the Act will be implemented in its entirety by December, 2023 but no later than December 19, 2023, because of the mandate of enforcing the law within 180 days after the Act received royal assent.²

The Act has been passed with the noble aim of ensuring that news agencies survive even in the current time dominated by the digital world. In today’s digital age, the majority of Canadians access news online and are now more dependent on social media platforms for news. Such circumstances have changed the dynamics of the news industry. It is because, on one hand, online advertising revenues for digital platforms in Canada have soared to a staggering $14 billion in 2022³ with two platforms i.e. Google and Meta platforms⁴ receiving roughly 80 percent of these revenues, a concerning trend persists on the other hand, where News outlets are getting closed each year because they are suffering a lot due to loss of advertising revenue. Therefore, as per section 4 of the Act, the purpose of this law is to “regulate digital news intermediaries with a view to enhancing fairness in the Canadian digital news marketplace and contributing to its sustainability, including the sustainability of news businesses in Canada”

Through this law, a framework has been laid out that would require some digital media platforms to compulsorily enter into agreements with Canadian news sites to provide them with compensation for sharing the journalistic content that appears on their platforms. Therefore, the aim of this legislation is to restore equilibrium by obligating dominant digital platforms to fairly compensate news businesses for sharing their news links on their platforms.⁵ In this article,  a detailed analysis is made of the objectives of the Act, its key features, and how it will impact the Canadian news market. 

Key Features of the Online News Act

Application of this law to few digital news intermediaries

According to Section 2(1), digital news intermediary are those online communications platform, including search engine or social media service providers, that serve within the limit of Canadian jurisdiction and makes news content produced by News outlets available to persons in Canada. However, the Act has only covered mainly social media giants who run online communities. As a result, it does not include those online communication platforms which merely provide messaging services or whose primary purpose is to allow persons to communicate with each other privately.

This law is not applicable to all digital news intermediaries as mentioned above. As per Section 6 of the Act, the law is applicable only to those intermediaries which fulfil certain parameters. These parameters are: 

1. The size of the intermediary or the operator; 
2. whether the market for the intermediary gives the operator a strategic advantage over News businesses; and 
3. whether the intermediary occupies a prominent market position. 

These factors are considered while ensuring that only those intermediaries are burdened with the obligation of this law where there is a significant bargaining power imbalance between the operator and News businesses. The intent of this Act is not to create unnecessary financial or legal burden on every digital media news intermediary. Further, as per the mandate of section 7, the intermediaries who fail to fulfil the criteria of section 6 are liable to voluntarily declare themselves that they are covered under this Act to the Commission as dedicated through this Act.

Eligible News Businesses 

At first, News businesses according to section 2(1) are those individual or entity that operates a News outlet in Canada. Thus, those businesses whose primary purpose is to produce news content. Under this Act, not all News businesses are eligible and are covered within the purview of this Law. As per section 27 of the Act, News businesses are eligible if they meet certain criteria such as:

1. it is a qualified Canadian journalism organization as defined in subsection 248(1) of the Income Tax Act, or is licensed by the Commission under paragraph 9(1)(b) of the Broadcasting Act as a campus station, community station or native station, Act or other categories of licensees established by the Commission with a similar community mandate.
2. produces news content of public interest that is primarily focused on matters of general interest and reports of current events, including coverage of democratic institutions and processes, however, it must have Canadian operations including content edited and designed in Canada, and it produces news content that is not primarily focused on a particular topic such as industry-specific news, sports, recreation, arts, lifestyle or entertainments
3. is either a member of a recognized journalistic association and follows the code of ethics of a recognized journalistic association or has its own code of ethics whose standards of professional conduct require adherence to the recognized processes and principles of the journalism profession, including fairness, independence and rigour in reporting news and handling sources; or
4. operates an Indigenous News outlet in Canada and produces news content that includes matters of general interest, including coverage of matters relating to the rights of Indigenous peoples, including the right of self-government and treaty rights.

Nevertheless, it is important to highlight that certain News businesses would be deemed to be ineligible if a News business is the subject of sanctions under the United Nations Act, the Special Economic Measures Act or the Justice for Victims of Corrupt Foreign Officials Act, or is owned or controlled by an individual or entity that is the subject of such sanctions. It is further deemed ineligible if the news business has its headquarters in a foreign state, as defined in section 2 of the Special Economic Measures Act, that is the subject of measures as mentioned above in the paragraph.

The process of deciding the terms of agreements

The Canadian legislature has tried to make sure that it emphasizes and incentivizes more over drawing voluntary agreements that can be reached independently of this Act without forcing two sides to be at a negotiation table ⁶. As per section 11(1), an intermediary can claim exemption from the applicability of this law when they can prove that the operator has entered into agreements with News businesses that operate News outlets producing news content primarily for the Canadian news marketplace. However, it is important that such an agreement satisfies certain criteria as provided in the same section. Some of the obligatory criteria to be found in the agreement by intermediaries for seeking exemption are:

1. they provide fair compensation to the News businesses for the news content that is made available by the intermediary;
2. they ensure that an appropriate portion of the compensation will be used by the News businesses to support the production of local, regional and national news content;
3. they do not allow corporate influence to undermine the freedom of expression and journalistic independence enjoyed by News outlets;
4. they contribute to the sustainability of the Canadian news marketplace;
5. they involve a range of News outlets in both the non-profit and for-profit sectors and they were entered into with news businesses that reflect a diversity of business models that provide services to all markets and diverse populations, including local and regional markets in every province and territory, anglophone and francophone communities, and Black and other racialized communities;
6. they protect interest of minority community News outlets as well as Indigenous News outlets

 Only on failure to agree voluntarily and independently on terms of agreements, the parties would have to proceed to a mandatory bargaining process through negotiation or bargaining sessions under section 18 of the Act with the aim to reach an agreement. Even if that fails, mediation sessions would take place and at last, if parties are still unable to reach an agreement, an arbitration process will be conducted wherein each party would be asked to submit their final offer, and then the best offer would be decided by the arbitral panel which would be constituted of three members selected from the panel.

Role of Commission 

In order to sustain the application of this Act, the legislature has directed the Canadian Radio-television and Telecommunications Commission as the dedicated Commission to keep a look on this law. The commission would be involved in the functioning of this law and would majorly do acts such as –

1. maintain a list of digital news intermediaries in respect of which this Act applies (Section 8(1)). 
2. Seeking information from the intermediaries and verifying their compliance with the law (Section 7(1)).
3. Passing of an interim order related to different aspects of the Act (Section 12).
4. Power to review or repeal interim orders passed earlier (Section 14).
5. Deciding which News businesses are eligible to be considered for this law (Section 27).
6. Overseeing the process of mediation and arbitration including the details of the arbitrators appointed and their functioning as a panel (Section 33-36).
7. Establishment of a code of conduct respecting bargaining in relation to news content (Section 49).

Is the law beneficial?
Meta and Google have blatantly opposed the implementation of the Law. Even more, these platforms have stated that they would limit their services by not providing Canadian news on their platforms. Kent Walker, President of Global Affairs, Google & Alphabet have given a statement that “Bill C-18 has become law and remains unworkable. The Government has not given us reason to believe that the regulatory process will be able to resolve structural issues with the legislation. As a result, we have informed the Government that we have made the difficult decision that when the law takes effect we will be removing links to Canadian news from our Search, News, and Discover products and will no longer be able to operate Google News Showcase in Canada.”⁷With this line of approach, it is unpredictable to comment whether the law would be a beneficial piece or whether it would do more harm than good. Nonetheless, the intent of law prima facie is bona fide and is necessary in today’s light where the digital world is taking a new height. However, smooth implementation by securing the interest of stakeholders is necessary for ensuring the true spirit of the law. Therefore, it is for us to wait and watch to understand what direction this new law will take in due course.