Canadian Heritage Committee on Oct. 28th, 2022

[Kevin Chan]

Mr. Housefather, would you like to ask me, because I—

[The Chair, Liberal, Hedy Fry]

Mr. Chan, when a question is addressed to you, you can speak. I'm afraid you cannot intervene right now.

[Anthony Housefather, Liberal, Mount Royal, QC]

Whistle-blower documents from Australia said that, although Facebook said implementing the ban was intended to affect only news outlets, “executives knew its process for classifying news for the removal of pages was so broad that it would likely hit government pages and other [health and] social services.”

It did, in fact, hit over 170,000 pages, including the Department of Fire and Emergency Services, the Council to Homeless Persons, Suicide Prevention Australia, domestic violence support pages, The Kids' Cancer Project, the Royal Children's Hospital, the Jewish Holocaust Centre, state fire and rescue during fire season, and municipal state and territorial governmental pages.

Facebook then said this was a “technical error” that it “worked to correct”, and that any suggestion Facebook did this deliberately was “categorically and obviously false.”

Mr. Dinsdale, do you agree it was a technical error and there was no attempt to shut down these pages?

[Marc Dinsdale]

My understanding of the situation is that—as we've expressed—any of those takedowns would have been done in error and were rectified as quickly as possible.

[Anthony Housefather, Liberal, Mount Royal, QC]

Funnily enough, they seem to have been rectified as soon as the Senate approved the revised bill with Facebook's amendments. The Facebook response team was able to then do it within a matter of minutes, when the Senate adopted the amendments, which was eight days after the initial takedown.

Can you explain, Mr. Dinsdale, why there was such a discrepancy? How was it that these pages somehow couldn't get restored in a timely way, but then, suddenly, when the Senate approved the new, revised bill Facebook had renegotiated, the pages were magically restored?

[Marc Dinsdale]

That, to me, sounds somewhat—with all due respect—speculative. What I'm able to share is what we have shared: Any errors made were rectified as quickly as possible, sir.

[Anthony Housefather, Liberal, Mount Royal, QC]

Okay, that's fine, but what we understood—again, from whistle-blowers—is that “Facebook did not use a 'standard canary process'” to test this algorithm's precision to identify or prevent overblocking before an action. Despite clear notice the lockdown was affecting far more sites than publicly acknowledged, which would normally have triggered a pause or rollback, senior executives ordered the full rollout to take effect within hours.

How, then, do we trust the fact that this was a technical error? Can I ask whether you did a post-mortem in Australia, and can you assure us the same situation won't reproduce itself in Canada?

[The Chair, Liberal, Hedy Fry]

You have 30 seconds for an answer, Mr. Dinsdale.

[Marc Dinsdale]

Thank you, Dr. Fry.

Sir, what I can share is that, again, if the bill passes as it is proposed and we are forced to consider this option, we would try to do it with as much consultation and transparency as possible. I certainly am not in a position to elaborate what that means. I can certainly reiterate that any mistakes done in Australia were exactly that—mistakes.

[The Chair, Liberal, Hedy Fry]

Thank you very much, Mr. Housefather and Mr. Dinsdale.

I'm going to move now to Martin Champoux from the Bloc Québécois for six minutes.

Go ahead, Martin.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Madam Chair.

Thank you to the witnesses for appearing before the committee today to speak to this important bill we're working on.

Just like Mr. Housefather earlier, I'm quite pleased to see that Mr. Chan managed to find his file with Facebook's figures. Indeed, the last time we asked him questions on Facebook's revenues, getting any answers was pretty difficult, so I'd like to seize this opportunity.

Mr. Chan, I suppose you remember your discussion last year with Jean-Hughes Roy, a renowned academic who devotes a lot of time to the issue of social media. When he was interviewed on TVA, he said that, in his view, it was obvious that part of Facebook's revenues—and Google's, too, but let's focus on Facebook today—is derived from journalistic content.

When you spoke with him, you might remember telling him that blocking access to journalistic content in Australia as a form of protest hadn't had any impact on your company's revenues.

Let's look at the numbers. Challenge them all you want, but Mr. Roy arrived at some interesting conclusions and revealed that average advertising revenues per Facebook used were around $82.21. On a per-capita basis, using 2017 numbers, we can conclude that Quebeckers generated $451.2 million U.S. for your company. If I'm being excessively precise with my decimals, we can round down.

Mr. Chan, do you agree with these numbers?

[Kevin Chan]

I haven't checked those numbers myself. We can continue with your hypothesis, but I can't confirm those numbers.

[Martin Champoux, Bloc, Drummond, QC]

Okay, let's do it then.

In 2018, Mark Zuckerberg stated that, under Facebook's new algorithm, the percentage of media content was about 4%. We can therefore assume that revenue from Facebook's journalistic content represents some $23 million or $24 million in Canada. We're talking revenue generated by domestic media.

Do you recognize those figures? Are we in agreement?

[Kevin Chan]

No, I think there's a flaw or a logical problem with this method of calculation.

The fact is that the percentage of content on Facebook is not equivalent to percentage of revenues. People post billions upon billions of pieces of content to Facebook. Your average person, Canadian or Quebecker, can see close to 1,000 pieces of content per day. The majority of that content is seen by no one, because there's just too much content and too few hours in a day.

[Martin Champoux, Bloc, Drummond, QC]

What you're saying, then, is that the revenue generated by the sharing of journalistic content is worthless to Facebook, and the media outlets are just wrong to think that Facebook should contribute.

And yet, you signed agreements with Australian media companies, including a major three-year agreement with News Corp Australia. If journalistic content is worthless to Facebook and doesn't generate any revenue, why did you wholeheartedly agree, if you'll allow me a touch of irony, to sign such agreements and reverse your decision to block access to content? If it's worthless to you and doesn't generate any revenue for Facebook, why, then, did you backtrack and sign these agreements?

[Kevin Chan]

Let's be clear: We've never made any kind of commercial agreement to pay for marketing that's already free. We signed commercial contracts in Australia, and in Canada as well, to develop new innovative models for the platform and for Internet tools. The people who made those comments may have misunderstood.

We've never paid for free marketing, anywhere in the world. We've never paid for links, we currently aren't paying for links and we really don't want to, because doing so would break something extremely important, not only for our platform, but for the Internet, because the Internet belongs to everyone.

[Martin Champoux, Bloc, Drummond, QC]

Yes, naturally. There's no such thing as a Nobel prize for generosity, but I think we need one for Facebook, Mr. Chan.

Ms. Charette, I'll ask you a question that we can revisit in subsequent rounds, because we don't have much time left in this one. I'd like to speak with you about the importance of setting criteria for journalistic quality. I think it's an important issue for the Fédération nationale des communications et de la culture.

In 30 seconds, could you tell me what you mean by that? What kind of legal mechanisms should we put in place to ensure that recognized and eligible journalism organizations are quality businesses?

[Annick Charette]

What is generally recognized as the code of journalistic ethics emphasizes the importance of presenting a diversity of viewpoints and not adhering to any specific ideology. In the federation's estimation, quality journalism as a criteria is very important in terms of professional accreditation.

I believe it was Google that suggested any group that publishes a paper should be able to ask for compensation, even if the paper they publish is a vehicle for their own ideology rather than the product of professional journalistic work.

I don't think we should recognize news outlets on the basis of the number of journalists they employ, but rather on that of the professionalism of their work, which is established according to a precise set of criteria. In fact, the Income Tax Act identifies certain criteria by which to recognize professional news companies. These are the kind of criteria that should be promoted rather than the number of permanent journalists on the payroll.

[The Chair, Liberal, Hedy Fry]

Thank you, Ms. Charette.

I will now go to Peter Julian for six minutes, for the NDP.

Peter, you have six minutes.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Chair, I'm going to be subbing for Mr. Julian today.

[The Chair, Liberal, Hedy Fry]

Okay, Mr. MacGregor, you have six minutes, please.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you very much.

Thank you to all of our witnesses. I'm going to try to do my best here on behalf of Mr. Julian with Bill C-18. I do appreciate everyone's feedback on this bill.

Ms. Charette, I'd like to start with you.

I was taking some notes as you made your opening statement, and I can very much relate to the concerns that you have and the willingness that you show to maintain a strong and diverse mediascape in Quebec, but I think that also applies to many regions in Canada as well. I know we've been hearing from the FNCC and many stakeholders that Bill C-18 has set out too restrictive criteria for news media companies to be eligible for negotiations with the web giants.

I have a couple of questions for you. First, what would happen to thousands of small news media companies, many of which are non-profit organizations, such as community radio and community TV in Canada and Quebec, if Bill C-18's eligibility thresholds remain unchanged?

[Annick Charette]

I believe that only professionally qualified news outlets should be eligible. I'm talking about a professional newsroom with a journalist that meets the criteria for journalistic ethics. I personally wouldn't even consider the submission of a company that only produces radio shows, for example.

There are a lot of small regional media outlets, print media in particular with a single permanent journalist, that should indeed get public recognition when their work is amplified by a sharing platform like Facebook or Google. It is therefore crucial, for the multiplicity and diversity of voices, to take these small media outlets into consideration. We can't allow ourselves to believe that a handful of agreements signed with large national media companies would cover all of the possibilities that are out there.

Everyone's been affected by the fact that digital platforms are keeping a large portion of ad revenues to themselves. The small outlets weren't able to keep up because they had no other way to redeploy themselves, whether online or otherwise. It is crucial that we protect those that are left.

In Quebec, the Coopérative nationale de l'information indépendante, that bought out six major regional newspapers, released some numbers regarding Facebook. The organization noted a 22% to 23% drop in online referrals from Facebook over the last year. Indeed, we're seeing that Facebook is increasingly closing itself off, preferring to promote self-contained pieces of content without any external links, which prevents readers from having to leave the Facebook environment to read the content. Our analysis shows that that's what caused the drop in online traffic observed by the co-op's news outlets.

Let's not forget that La Presse, just like all of the co-op's newspapers, is only compensated when users are redirected to the content on the newspaper's website when they click on a link appearing on the Facebook product. Without such a link, the newspaper isn't compensated and experiences a loss of revenue, and increasingly, Facebook omits these links in its publications. I hope I've been clear.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

That's fine. I appreciate that.

My second question is related to the first. I want to get into a specific clause of the bill, specifically clause 27. It deals with the eligibility. What would FNCC suggest to amend that clause that deals with eligibility so that we can lower the threshold to include more small-sized news media companies, either business or non-profit? I think that should help us when we get to the clause-by-clause consideration of the bill.

[Annick Charette]

Give me a moment to familiarize myself with clause 27. I don't know them all by heart.

Is it the one on public broadcasters?