Canadian Heritage Committee on April 20th, 2023

[Kent Walker]

If I could add to that quickly, there are European countries that have adopted approaches similar to Canada's journalism tax credit or Canada periodical fund, which establish criteria for journalistic organizations that have been useful benchmarks as we've entered into those agreements and have helped fund journalism.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Very good.

You made a comment earlier that Bill C-18 “eligible news” definition was too broad. Is there another country that has a definition that you think is a more accurate and narrow focus?

[Richard Gingras]

I don't think I have a good example.

Australia's, I believe, was certainly narrower than what we see in Canada.

Interestingly, for my first meetings with heritage close to two years ago, I had pointed out that in my assessment—and, again, my assessment may not be thorough across the globe, but that is very much part of my work—I was particularly impressed with the criteria established by the journalism tax credit, which focuses on organizations that are looking to provide comprehensive journalistic coverage for their communities.

We thought it was a solid approach such that we have in many regards tried to emulate it.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

I'll go to my final question then.

You've got a lot of experience, Mr. Gingras, with news and being in the news world for years and years.

What is your expectation if Bill C-18 is put in place in its current form? What do you think the impact will be on local media in Canada?

[Richard Gingras]

Thank you.

As I've noted, I think there are several things that would cause concern.

One is that we think the disbursement of the funds would be disproportionately against the objective of the support of quality journalism for local communities.

Furthermore, what causes me concern.... As I've mentioned, the emerging ecosystem of innovative digital players in Canada is the best I've seen in the world. I'm not just saying that. I work around the world. It's very good. As we proceed with these issues, I would encourage figuring out how we drive further innovation. Again, the world has changed. We need to be looking forward, not backward.

How do journalists evolve models that can win back the trust and sense of relevance of citizens in open societies everywhere? We think that's critical.

We have people in Canada who mention Village Media and many others, who are so passionate. They are the future of news in Canada. What concerned me was their expression that they feel they're not being heard in this debate. I think that's unfortunate because they are leading that charge, and they are incredibly passionate and inspirational in doing so. I think it would be so important and constructive to do everything we can to help them move forward.

[The Vice-Chair, Conservative, Kevin Waugh]

I'm going to cut you off, Mr. Gingras.

We move to the Liberals for five minutes with Mr. Housefather.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thank you very much, Mr. Chair.

Coming back to you, I asked Bard what questions I should ask you, and unfortunately it didn't really give me very good questions, so I'm going to clean up a little bit on the testing that I still need to get to, and then I'd like to ask some Sherman act questions.

Let me start by asking you—this has not come up—for those Canadian publishers that you signed licensing agreements with already, were they exempt from this test? Did you not block those news outlets?

[Richard Gingras]

As noted, again, with the crafting of the tests we sought to emulate as carefully as we could the current draft language, which in some cases isn't as specific as it might be, but to emulate that language in terms of what would be an eligible—

[Anthony Housefather, Liberal, Mount Royal, QC]

It's just a simple question, yes or no.

[Richard Gingras]

Were they left out? No.

[Anthony Housefather, Liberal, Mount Royal, QC]

Perfect.

This is what is on everybody's minds. You did this testing in Spain. You did it in Australia. It became public. Everybody's wondering whether or not you did this so that it would become public—because everybody knows it would eventually leak and become public—in an attempt to intimidate parliamentarians when they were considering Bill C-18, because it's now before the Senate.

Can you just confirm for me that that was not your intention?

[Richard Gingras]

It was not our intention.

I want to point out several things.

First of all—

[Anthony Housefather, Liberal, Mount Royal, QC]

You don't need to point out several things. I asked the question: Yes or no, was that your intention?

It was not your intention. What would be very helpful I think is the contemporaneous emails that will show us clearly that this was not what Google was thinking of when we received what the committee had requested. I appreciated that Mr. Walker mentioned that, hopefully, it's on its way at some point soon.

In retrospect, would you do anything differently? Given how all of this has turned out, are you in any way now contrite over doing this or do you at least think that it should have been done in a different way so that Canadians wouldn't have felt so unhappy?

[Richard Gingras]

I don't feel any contrition about the actions we've taken. I feel an extraordinary deep sense of responsibility about our work. If I were to look back at my own activities over the last two years, I'd simply say that I wish I were better at convincing key stakeholders in the government and in Parliament that there was a better way of approaching the problem.

[Kent Walker]

In the course of our conversations, we had indicated that we would be assessing various implications of the legislation. I recognize that there are concerns about the nature of the tests, but in a sense, we are trying to act as both a responsible business and a responsible contributor to society, and it raised red flags that—

[Anthony Housefather, Liberal, Mount Royal, QC]

I understand. I have very few minutes here, so can I ask this question? Does Google structure its business related to ad servers such as DoubleClick for publishers, ad exchangers such as AdEx and its advertiser ad network such as Google Ads any differently in Canada than it does in the United States?

[Kent Walker]

I don't believe so. I would look to Richard, who may have more information on that.

[Richard Gingras]

I don't believe so either. I would further note, actually, that we're also very careful—

[Anthony Housefather, Liberal, Mount Royal, QC]

That's what I wanted to establish. That's why I've looked at it, and that's what I think too.

I also think it would be fair to say that your market share in Canada is relatively similar to your market share in the United States for each of these products, right?

[Richard Gingras]

Which products would those be?

[Anthony Housefather, Liberal, Mount Royal, QC]

Just DoubleClick, for example, the number of publishers using DoubleClick....

[Richard Gingras]

I would imagine that would be the case, but again, that's not—

[Anthony Housefather, Liberal, Mount Royal, QC]

I know it's not your area, but I've looked at it, and my understanding is that it's relatively similar.

As you know, the United States Department of Justice, in eight states, including your home state of California, is right now suing you over the company's dominance in ad tech. I wanted to give you a chance to react to one of the things the Department of Justice had written in the lawsuit. The complaint says:

Google, a single company with pervasive conflicts of interest, now controls: (1) the technology used by nearly every major website publisher to offer advertising space for sale; (2) the leading tools used by advertisers to buy that advertising space; and (3) the largest ad exchange that matches publishers with advertisers each time that ad space is sold. Google's pervasive power over the entire ad tech industry has been questioned by its own digital advertising executives, at least one of whom aptly begged the question: “[I]s there a deeper issue with us owning the platform, the exchange, and a huge network? The analogy would be if Goldman [Sachs] or Citibank owned the [New York Stock Exchange].”

I just want to give you a chance to react to this lawsuit in a non-legal.... I'm not asking for your legal conclusions, but could you just explain to us why you disagree, perhaps, with the Department of Justice?

[Kent Walker]

Sure. At a high level, and obviously not directly related to the lawsuit, for the reasons you note, I would say that it has been a significant opportunity for publishers around the world to find ways to do a better job of monetizing their digital content. The services we provide in those cases would give them the large majority of the revenues that are coming from advertising. For major publishers, that number can be as high as 95% of the revenue that they keep.

The services we have, because they are integrated—by the way, most other advertising networks are also integrated—have a certain efficiency to them that allows for the matching of a viewer and a relevant ad and a relevant publisher in a way that actually increases the pie and creates more available revenue and advertising revenue to keep for publishers as they manage to transition into the digital age.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thanks.

The lawsuit says that you do take 30¢ on the dollar, though. It also talks about anti-competitive practices, which I'd like to get into if I get another opportunity. I really appreciate your frankness in all of these answers, Mr. Walker.