Evidence of meeting #46 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was information.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Kevin Chan  Head, Public Policy, Facebook Canada, Facebook Inc.
Jason Kee  Counsel, Public Policy and Government Relations, Google Canada
Aaron Brindle  Head, Communications and Public Affairs, Google Canada
Marc Dinsdale  Head, Media Partnerships, Facebook Canada, Facebook Inc.
Julien Brazeau  Associate Deputy Commissioner, Competition Promotion Branch, Competition Bureau
Anthony Durocher  Deputy Commissioner, Monopolistic Practices Directorate, Competition Bureau

5:30 p.m.

Liberal

Darrell Samson Liberal Sackville—Preston—Chezzetcook, NS

I understand what you are saying. However, we have a report to submit and recommendations to make. How can we ensure that you will take into consideration these criteria that are important to us? What is the solution? I don't have it. Do you have it? You have seen this phenomenon for a long time; it did not start yesterday. What are the criteria that allow us to better meet the needs of Canadians and to guarantee their rights?

5:30 p.m.

Associate Deputy Commissioner, Competition Promotion Branch, Competition Bureau

Julien Brazeau

I understand your question and the questions the committee is raising. What is the solution to the need for a diversity of voices and to the consolidation happening in this market? I don't think the Competition Bureau is necessarily in the best position to tell you what the solution is, or what criteria you should adopt to ensure this diversity of voices, or what is needed to ensure it.

As we said, our analysis tends to be based on an economic approach. Moreover, we apply the act that governs us, and this issue of diversity goes beyond our traditional mandate. What is that mandate? What should be done? Must something be done to ensure a diversity of voices? I think that the committee and our department, which is more concerned with the overarching policies, would be in a better position to answer those questions.

5:30 p.m.

Liberal

Darrell Samson Liberal Sackville—Preston—Chezzetcook, NS

It must be difficult for you to observe these deficiencies without being able to contribute to improving the situation.

5:30 p.m.

Associate Deputy Commissioner, Competition Promotion Branch, Competition Bureau

Julien Brazeau

As my colleague Mr. Durocher said, at the Competition Bureau we like to say that we are the champions of competition. Our premise is that the more competitors there are in a market, the better the prices, choices and innovations.

We also believe that the markets will do what is needed to find a proper balance between the consumers and the market. It is not up to us to determine where that equilibrium should lie.

5:30 p.m.

Liberal

Darrell Samson Liberal Sackville—Preston—Chezzetcook, NS

Thank you.

5:30 p.m.

Liberal

The Chair Liberal Hedy Fry

Thank you very much.

I would like to pose one question to you, if I may.

One of the things there was agreement on when you allowed the Sun and National Post to merge was not editorials, but it was that they wouldn't combine their newsrooms. Well, they have. I just thought you should know that in Canada today, 99 dailies exist. This has been a drop in the amount of dailies. Of those 99 dailies, 45 are owned by Postmedia.

If we talk about competition, where is that competition when they own the majority of dailies? You're getting the same information going out to people and that's one of the problems.

I want to quickly add one thing, and then maybe you can answer. We talked a little about Google and Facebook. They have moved into something new. They have become news aggregators, and therefore, they are in direct competition now with people who do the news—newspapers, television, or radio. They are in direct competition. We now see that 21% of Canadians rely on both Google and Facebook to get their news, and 29% rely on TV. That tells you that competition has been dampened. That tells you there's a monopoly going on in these news aggregators, and there are problems that come as a result of this.

Those are two questions about the not combining newsrooms. What happens if a group agrees with you, under your decision-making, that they shouldn't do certain things and then they ignore it and do it anyway? What do you do? What is your recourse? How do you move that forward?

I think that this has been anti-competition, when you close down.... When you are now responsible for almost half the number of dailies in this country, that is saying a great deal. There is no competition for news, or the one competition that's come about is Google and Facebook, who are in direct competition and becoming monopolies.

Perhaps you could answer that, and also let us know whether you think there's anything we could recommend to maybe broaden.... The fact that you wanted them to have separate newsrooms means that you were concerned about more than just money, more than just markets, more than just financial implications. You were concerned about the diversity of news. That was underlying what you said originally.

I just wonder how you would answer that. Thanks.

5:35 p.m.

Associate Deputy Commissioner, Competition Promotion Branch, Competition Bureau

Julien Brazeau

Thank you for that question.

I just want to clarify one thing in terms of what was in the bureau's release on March 25 and what information the bureau relied upon in reviewing the Postmedia transaction. Certainly we did mention this idea of having the two separate editorial boards, that this was a representation that the parties made, but as I mentioned to Monsieur Nantel, it was not a criterion that was considered as part of our review or a factor that was determinative in our review. That was information that was provided because we like to be as transparent as possible, and that was information that the parties had agreed to release publicly. That was not a specific undertaking.

When the bureau issues a “no action” letter, it's a bit different from when we enter into a consent agreement with parties. When we review a transaction and we think there could be an anti-competitive effect, but there is a potential remedy or the parties agree to certain behaviour to remedy what we think could be an anti-competitive effect, then the bureau can negotiate a consent agreement with them that is registered with the tribunal. The bureau would continue to monitor to ensure that the parties don't run offside of that consent agreement. To the extent that they do, we could reopen the investigation and seek to proceed that way.

In this circumstance, because it was a “no action” letter and we hadn't relied on those representations on the newsrooms, given that the parties ultimately decided to merge those newsrooms, that fell outside of the scope. It was not a remedy that the bureau had relied upon in coming to its determination. That did not give rise to a need, in our view, to reopen the review and the transaction.

In terms of the effect on Google and Facebook, this is an industry that's changing quickly, as everyone has noted. Even since our last review, the market has evolved significantly as well. To the extent that another transaction were to present itself, we would certainly take a look at the landscape as it is now and make a determination on what the competition is. I couldn't provide hindsight in terms of the transaction based on the current situation of the market now.

5:35 p.m.

Liberal

The Chair Liberal Hedy Fry

Based on the current situation, would you look at it again? Would you revisit the issue?

5:35 p.m.

Associate Deputy Commissioner, Competition Promotion Branch, Competition Bureau

Julien Brazeau

The bureau has a 12-month window from which it reviews a merger transaction. That 12-month window has now lapsed since we reviewed the Postmedia transaction.

Again, the factors we were looking at in the context of the Postmedia transaction were advertising revenues and readership. For the purposes of our review of the transaction, we looked at both the dailies and the more broadsheet newspapers. We noticed there was differentiation between those two in the types of consumers who were consuming those. There was competition in the sector in terms of free local dailies as well who were in the market. There was competition as well from digital media in terms of opportunities for advertising rates.

A number of factors were considered at the time. Since that time, within the year that elapsed, we didn't see any material information that would lead us to reopen the transaction.

5:35 p.m.

Liberal

The Chair Liberal Hedy Fry

Thank you very much.

I want to thank you for coming. It was very interesting.

Now I would like to entertain a motion for—

5:35 p.m.

An hon. member

I move adjournment.

5:35 p.m.

Liberal

The Chair Liberal Hedy Fry

This committee is adjourned.