Thank you, Madam Chair.

On behalf of the Internet Society Canada Chapter, I would like to thank this committee for the opportunity to address this important subject.

As a preliminary observation, the Internet Society supports initiatives to financially bolster news organizations as they transition to the Internet era. We believe that a broader levy applied to all social media platforms and search engines, coupled with a truly independent body to apportion funding, would have been fairer and a more reliable source of funding than the illusory bargaining scheme that is at the heart of Bill C-18.

Neither Bill C-18 nor the Australian legislation on which it's based represents bargaining based on the value of news content to news intermediaries. The bargaining process is contrived, apparent rather than real. Having stripped news intermediaries of legal protections, it is designed, under threat of excessive monetary penalties, to coerce intermediaries to agree to compensate news businesses. It withdraws the exceptions and limitations of copyright law from digital news intermediaries, while leaving those same rights in place for their competitors and for the news organizations themselves.

The government is using its legislative power to force a handful of businesses that have successful advertising-based business models to compensate an industry whose advertising-based business models are failing.

I would like to quickly make a few specific points.

First, Bill C-18 imposes significant costs on making news content through hyperlinks available to the public. Hyperlinks are the quintessential means by which individuals and businesses seek and find news content and all other information online. By imposing a cost on news intermediaries for links to news content, Bill C-18 threatens the efficiency of news retrieval on the Internet and the ability of Canadians to access news content. Bill C-18 will raise the cost, directly or indirectly, of accessing news content in Canada.

Second, the definition of “digital news intermediary” in subclause 2(1) raises complex questions of constitutional facts and law. Facebook and Google, for instance, are likely not subject to federal regulatory authority.

Third, the criteria in clause 6 by which a digital news intermediary must self-identify are vague and inappropriate. They are borrowed from concepts as different from each other as competition law and labour law. The legislation neither defines the relevant markets nor sets forth to what the imbalance of bargaining power relates.

We would urge the government to consider following the Australian model in this regard, in which the minister designates the intermediary according to clearer—not perfect—criteria set out in section 52E of the Australian act.

Fourth, clause 27 has a bifurcated definition of “eligible news business”. Paragraph 27(1)(a) refers to “a qualified Canadian journalism organization”, a definition for the purposes of the Income Tax Act, which requires that an organization qualify by meeting demanding criteria. As numerous intervenors have pointed out, paragraph 27(1)(b) qualifies organizations with no observable journalistic standards. Click farms and foreign agents should not be eligible news organizations. We note section 52P of the Australian legislation as a better model in this regard.

Fifth, clause 24 denies to news intermediaries any reliance on copyright exceptions and limitations. It should be deleted. It nullifies any market-based approach to the determination of the value of news content to digital news intermediaries.

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