Canada Pushes Canadian Content, Disturbing Big Tech

Google parent Alphabet Inc.,

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owned by Meta Platforms Inc. and Bytedance Ltd., owner of TikTok, is opposing a proposal in Canada that would force digital platforms to more prominently feature Canadian content and pay compensation to news outlets.

The new rules, supported by Canadian Prime Minister Justin Trudeau,

When someone in Canada searches YouTube, it will require reworking existing algorithms so that results show mostly videos by Canadian artists in front of foreign or US-made content.

The proposed law would also oblige digital media companies to make annual payments to Canada’s arts community. Officials estimated the payments could be roughly C$1 billion, or the equivalent of $750 million.

Pablo Rodriguez, Canada’s minister of heritage, appointed last year by Mr Trudeau to enforce the rule changes, said the law would “protect the future of our culture as Canadians”. “It’s about digital platforms paying their fair share to our culture.” He added that the money will help increase the amount of French and indigenous production programs in the country.

But according to people familiar with the talks, Alphabet’s YouTube division, streaming companies like TikTok and Netflix objected to the proposal in a series of private meetings with Canadian officials., and in his testimony before parliamentary committees. Meta Platforms also In October, Canada threatened to block access to Canadian news content if it forced digital platforms to pay media outlets for links to their stories – as it did in Australia last year. Canada tracks payments through separate legislation for local media outlets.

At a meeting in Los Angeles in June, Alphabet and Google Chief Executive Officer Sundar Pichai pressed Mr Trudeau to reconsider the law because of possible longer-term implications, according to people familiar with the encounter. Google has previously discussed that smaller Canadian artists, some of whom have developed a global audience, risk losing ad revenue as their material is directed to audiences who are not interested in the content, as redesigned algorithms could lead to less views outside of Canada. The platform and the artist share the ad revenue.

According to those familiar with the discussions, Mr. Trudeau was unimpressed by Mr. Pichai’s pleas. The Canadian leader met with Mr Pichai at the Americas Summit, which President Biden hosted to discuss the economy, climate and immigration.

Heritage Minister Pablo Rodriguez said the plan would “protect the future of our culture as Canadians”.


Photograph:

David Kawai/Bloomberg News

In an interview with The Wall Street Journal, YouTube’s chief product officer, Neal Mohan, said in an interview with The Wall Street Journal that Canada’s proposed changes “will require YouTube to manipulate our systems and display content based on government priorities rather than the interests of Canadian users and creators.” To speak to government officials and lawmakers in Ottawa.

The proposed legislation leaves the task of setting and enforcing content rules to the Canadian Radio-Television and Telecommunications Commission, the broadcast regulator.

The debate is closely watched in other countries that are considering regulatory changes to protect local interests, after the world’s largest digital companies changed the way their households watch shows and consume news.

“I look forward to seeing what the future developments in Canada will be,” said Claudia Roth, Germany’s minister of state for culture, after a meeting this year with cultural policy officials from Group of Seven countries. “I believe we can learn a lot from this.”

Canadian Prime Minister Justin Trudeau, in a white shirt, appears at a Google facility in Kitchener, Ontario, in 2016.


Photograph:

Nathan Denette/The Canada Press VIA Associated Press

The Biden administration warned Canada this week that bills targeting the online streaming and sharing of online news content “discriminate against US businesses”, U.S. Trade Representative Katherine Tai said after meeting with her Canadian counterpart. A spokesperson for Canada’s trade minister said the legislation was consistent with the country’s trade obligations.

When he took power in 2015, Prime Minister Mr Trudeau aggressively courted large digital companies to invest and create jobs in Canada, and celebrated leadership at Google and Facebook for their positive impact on society.

“Canada is the right place to shape the future – a future where things like artificial intelligence and deep learning help create jobs, improve our quality of life and create new opportunities for the middle class and those who want to join it,” said Mr. Trudeau at an event in 2017 regarding Facebook’s decision to open a lab in Montreal, the Canadian leader’s hometown.

The honeymoon with big tech came to an end after what Mr. Trudeau and his associates learned through Cambridge Analytica. Incident related to growing concerns among Canadian policymakers about online harassment and safety, as well as the role social media plays in polarizing American society, according to current and former officials. In early 2019, Mr Trudeau signaled that his government would regulate digital platforms.

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Canada’s parliament is working on three laws targeting big tech companies. Proposed rules targeting streaming and compensation for local media outlets attract the most scrutiny. The third piece is about protecting Canadians’ privacy in the digital economy.

Mr Trudeau has also promised a fourth bill that aims to regulate harmful online content and hold online platforms accountable for hosting such material.

The heritage minister, Mr Rodriguez, agreed. digital companies play an important role in job creation for Canadians.

“But for us, it’s about making them more accountable,” he said in a recent interview. As for lobbying activities, he said on regulatory platforms, “I am not afraid of them… I am open to discussion and changes but not to do nothing.”

Flow legislation is currently in the country’s senate for review. Senators are discussing about 100 amendments to the bill. The changes aim, among other things, to exclude user-generated content uploaded to platforms like YouTube and TikTok from regulation and to restrict the cabinet’s power to issue regulatory orders.

Stewart Reynolds, a comedian known for uploading videos to Facebook, says Canada’s streaming legislation “has a real risk of disconnecting us from the world, making us big fish in a small pond.” and YouTube, whose stage name is “Brittlestar,” said in a statement to Canadian senators on October 19.

“Forcing people to view content because it’s Canadian doesn’t encourage people to like it.”

Write to Paul Vieira at paul.Vieira@wsj.com and to Vipal Monga at vipal.monga@wsj.com.

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