The Online News Act Application and Exemption Regulations (SOR/2023-276) under the Online News Act, aim to address the imbalance between digital platforms and Canadian news businesses. This legislative framework responds to the declining revenues and increasing closures within the Canadian news sector, largely driven by the dominance of a few digital platforms, such as search engines and social media networks, in the online advertising market.

The Online News Act was enacted to ensure fair compensation for news content shared by platforms such as search engines and social media. It mandates that these platforms negotiate commercial agreements with news businesses and provides a pathway for them to apply for exemptions from mandatory bargaining, provided they can demonstrate compliance with specific conditions.

The Regulations define critical terms and establish application criteria that emphasize a significant bargaining power imbalance. A platform is considered to have this imbalance if it earns over $1 billion in total revenue and has at least 20 million unique visitors or active users in Canada each month. Digital platforms are required to notify the Canadian Radio-television and Telecommunications Commission (CRTC) within 180 days if they meet these criteria, allowing them to explore potential exemptions while preparing for negotiations with news businesses.

To qualify for an exemption, platforms must conduct an open call process for news businesses to express interest in receiving compensation. This involves publishing a notice for at least 60 days, gathering responses from news organizations, and providing the CRTC with information about participating businesses. The exemption process is designed to ensure that agreements are fair and beneficial to a diverse range of news outlets, including local, regional, and Indigenous publications.

Furthermore, the Regulations stipulate that any agreements reached must ensure fair compensation and contribute to the sustainability of the Canadian news marketplace. For platforms identified as the largest search engines, there is a mandatory minimum monetary contribution of $100 million per year, adjusted for inflation, to ensure substantial support for news businesses. A core principle of the Regulations is the protection of editorial independence; agreements must include commitments that platforms will not interfere with editorial decisions or retaliate against news organizations for their content.

The Online News Act Application and Exemption Regulations represent a crucial effort to rebalance the relationship between digital platforms and news businesses in Canada. By establishing clear guidelines for application, notification, and exemption processes, these Regulations aim to foster fair commercial agreements that support the sustainability of the news industry while maintaining journalistic independence. This regulatory framework is intended to address the challenges faced by Canadian news organizations in the evolving digital landscape.

Canada (SOR/2023-276) January 3, 2024