Information & Ethics Committee on May 9th, 2019

[Jason Kee]

Primarily because the advertising systems are a bit different, in terms of how the creative is being uploaded to us, how it's stored and how it's managed internally. That's why I said it would be the kind of thing that we would work towards, but we didn't feel comfortable this time around that we could commit to that kind of turnaround time.

[David Graham, Liberal, Laurentides—Labelle, QC]

What kind of investment of time and resources would it take to make it happen, if you decided to do so? You say it's possible for the 2023 elections, so it is possible. What would it take to do it?

[Jason Kee]

To be honest with you, it's not a question I could answer, simply because after examining it seriously, we couldn't match the time frame we had. I couldn't give you an estimate as to how long it would take, or what the resources required would be.

[David Graham, Liberal, Laurentides—Labelle, QC]

Do you have a sense of how much profit Google takes out of Canada versus what's invested in Canada?

[Colin McKay]

I think I'd describe that in two separate ways. It's actually broader than that, because the way our platforms and services work, we are often an enabler for Canadian businesses and Canadian companies, whether providing free services or paid services that support their infrastructure.

As well, with something as broad as advertising, it certainly.... With revenue that's generated by online advertising when you're dealing with Google, there's often revenue sharing with platforms and sites, so the conversation is not a one to one. Canadian businesses are using our technology to place ads, pay for their services and drive revenue themselves.

We're very proud of the investment being undertaken in Canada, on behalf of Google, in terms of the growth of our engineering and R and D teams, and our offices themselves.

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Kee, I think you were recently at Industry's study on copyright. One of the questions that came up was on rights management systems, and whether they have followed fair dealing to apply to Canadian law. The answer from both Google and Facebook was no. They don't follow fair dealing. They apply their own policies.

How do we get to a point where Google says, “Canada is important enough that we will make it a priority to follow local laws on matters that affect this company with great responsibility”?

[Jason Kee]

That is in no way a reflection on the relative view of the importance of Canada or local law, in terms of the application of our content identification system.

For the benefit of the other committee members who aren't necessarily familiar with it, Content ID is our copyright management system on YouTube. The way it works is that a rights holder will provide us with a reference file—a copy of the file they want managed online—and then we apply a policy on every single copy that we detect has been uploaded to YouTube.

Because the system is automated, it doesn't handle context or exceptions very well. Fair dealing and Canadian copyright are actually exceptions to the law, which says they are exceptions to general infringement, because of a certain basic line of reasoning, and require a contextual analysis. It's why we respond to those exceptions by having a robust appeal system. In the event that Content ID flags content inappropriately, because you feel you have a very strong argument that fair dealing applies, you then appeal that decision and assert that fair dealing applies, and then an assessment is made.

[David Graham, Liberal, Laurentides—Labelle, QC]

In the case of the copyright system, you are going ahead with a system that doesn't follow Canadian law, but has an appeal system. In the case of Bill C-76, you're saying, “We're not going to do it, because it doesn't make practical sense.”

In the copyright experience, you're not worrying about Canadian law, quite frankly, because if somebody does have a fair-dealing exemption, it shouldn't be incumbent on them to prove they have the right to do something that they absolutely have the right to do.

I'm trying to get my head around why you're going ahead with the copyright, and not following it with Bill C-76. To me, it seems like a difficult but entirely doable system to resolve. As Nate said earlier, if it was the United States, I'm sure it would be fixed already.

[Jason Kee]

Essentially, the main difference, at the risk of getting slightly technical, is that fair dealing in Canada is an exception to infringement. It is a defence that one raises in response to a claim that you have engaged in an act of infringement, so the way that is managed is very different.

In this instance, Bill C-76 was introducing positive obligations—not only that you had to introduce an ads registry, but about the way it had to be done—that we simply couldn't accommodate in the time frame allowed. That's the main difference in the two.

[The Chair, Conservative, Bob Zimmer]

Thank you.

Next up, for five minutes, is Monsieur Gourde.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here this morning.

We know that there is only a short period of time left before the elections. You mentioned the technical problems, the problems in complying with the Canada Elections Act.

In Canada, the reality is that we can put advertising on your platforms, but Canadian legislation limits election spending limits and the diversity of places where political parties and candidates can spend their money. This determines a certain market share, which you may have evaluated.

First, did you evaluate this market share?

Second, it may have been such a small amount of money, considering all the projects you are running simultaneously on your platform, that it was simply not worth complying with the act this year because of the amount it could bring you.

Has an evaluation been done internally by your managers? For example, to have an additional income of $1 million would have cost $5 million. It may not have been worth it to comply with the act for the 2019 election. Is that correct?

[Jason Kee]

That was not a calculus that entered into the determinations at all. It was fundamentally down to how we would engage the requirements, whether it was technically feasible for us, given the way our systems currently work, given the time frames and, frankly, our risk tolerance, with respect to what would happen if we ended up getting it wrong. That was entirely it.

It never came down to a calculation of a cost benefit. If anything, it's worthwhile noting, we have opted out of engaging in the only thing elections-related that actually would earn us revenue. Instead, we are investing in things that do not earn us revenue, such as our engagement with Elections Canada on promoting election information through search and knowledge panels, and so forth, with YouTube and in various other measures, not the least of which was a $1-million grant to CJF on news literacy, in advance of the Canadian election.

Essentially, we have doubled down on the non-revenue-earning components of it, to compensate for the fact that we simply could not accommodate the requirements of Bill C-76.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

In your answer, you talked about risk tolerance. Was it too risky, given that some of the provisions of the bill amending the Canada Elections Act were relatively vague and didn't allow you to be sure how to implement new platforms?

[Jason Kee]

It had to do with some of the wording, which was vague. Again, there were the concerns I flagged with respect to the issue of ads, but as well, it was the time frame that would be required to update the registry based on this idea, as stated in the act, that it had to be done within the same day. Does that mean literally real time or not, and what was the flexibility there?

We have had robust engagements with both the commissioner of Canada elections and Elections Canada on matters of interpretation. You may have seen Elections Canada issue guidance about a week and a half ago with respect to that, which actually largely confirmed some of the concerns we had, and it was more of a reflection of that.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

It may happen that some ads made by third parties directly or indirectly are not necessarily considered election ads, but that they attack certain parties. You talked about human control of your platforms. Do these people have the necessary expertise in Canadian politics to distinguish between advertising that actually attacks other parties and advertising that promotes a Canadian election issue? In fact, I would like to know what the expertise of the people who will be monitoring these platforms is. Do they have expertise in Canadian politics, American politics or the politics of another country?

[Jason Kee]

It's actually a combination of all of the above.

What's happening is that in order to implement the prohibition, we will be updating our ads policies. As I said, there are entire classes of ads where basically we will not accept the ad, such as cannabis advertising. There's another class of ad that goes through registration requirements. That's all governed by our advertising policies.

This decision will be reflected in those ads policies. We will have ads enforcement teams located in various places around the world who will be educated on these ads enforcement policies.

With respect to the specific issues on the use of the ad, every class of ad that you described sounds as though it would likely fall within the ambit of Bill C-76 and fall within the ambit of the prohibition.

We will have actually teams that are trained on that, but also, specifically looking at it from a Canadian perspective, informed by the advice that we have across functional teams located here in Canada.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you.

[The Chair, Conservative, Bob Zimmer]

Monsieur Picard, you're next up, for five minutes.

[Michel Picard, Liberal, Montarville, QC]

Thank you.

Did you just mention to my colleague that you have not looked at the return on investment issue in regard to this case?

[Jason Kee]

Correct. That wasn't entering into the calculus of the decision.

[Michel Picard, Liberal, Montarville, QC]

Do I understand correctly when you say that one of the technical problems you have is that with third party publicity or advertising, when they use those third party ad “brokers”, or whatever, it is difficult, and maybe impossible, to know where it comes from? Therefore, not being able to divulge the name of the author, the publicity is therefore too complicated for now, so you cannot go forward and just backtrack from the initiative of having publicity in the next election.

[Jason Kee]

It was less about the source of the advertising. It was more about our ability to update whoever it is that showed the ad in real time, the information that they showed in a political ad, and then provide them the information and the ad creative they need to update their own registries.

[Michel Picard, Liberal, Montarville, QC]

Is this practice in advertising the same in other countries with those sources and third party middlemen?

[Jason Kee]

It depends on the individual practice in individual countries. I'm reticent to comment on the electoral law of other countries that I'm simply not familiar with.

I know with respect to our own policies we've applied around political advertising in countries where we've deployed a transparency report, a registry, we've actually been employing similar requirements with respect to advertiser verification and finding means to verify that the advertiser in question was authorized to run political advertising by the local electoral regulator.

[Michel Picard, Liberal, Montarville, QC]

What was the difference where you were able to apply that? Based on that experience, what is the difference in our case where it's not possible?