Thank you, Mr. Chair and honourable committee members, for the opportunity to speak to you about Bill C-244.
My name is Paul Fogolin, and I'm the vice-president of policy and government affairs for the Entertainment Software Association of Canada. We represent major video game console makers, publishers and large and small developers, as well as national distributors.
The video game industry is the largest entertainment industry in the world, plain and simple, with revenues that far exceed those of both film and music. In 2022, the video game industry earned over $170 billion in global revenues.
At ESAC, we're proud to report that Canada is one of the biggest players in the global games business. Home to close to 1000 studios with over 32,000 full-time employees and contributing $5.5 billion to the Canadian economy, we punch far above our weight.
The Copyright Modernization Act, passed in 2012, has helped to drive this growth by protecting the considerable time, investment and creativity that developers put into their games. This empowers them to innovate and create, knowing that legal protections exist to mitigate the risk of piracy and infringement.
While we recognize the good intentions driving this bill, if passed it could result in unintended consequences for both our industry and our players. Permitting the circumvention of TPMs presents a unique risk to our industry. Let me explain why.
The integrity of the entire video game ecosystem relies on TPMs. Not only do they protect intellectual property, but they prevent hacking and cheating, deter unauthorized access to consumer information and help support cybersecurity. They also allow a console to be securely updated, providing players with new content, extended storylines and updates to the game experience.
Before the Copyright Act was passed, the widespread availability of circumvention devices and services in Canada created an environment in which piracy and modding thrived. The act provided the critical measures needed to pursue those who facilitate and engage in piracy.
This is not a theoretical concern. It's been validated through the courts in litigation. In a precedent-setting decision issued in 2017, Nintendo of America v. King, the Canadian Federal Court awarded over $12 million in damages for the circumvention of TPMs and copyright infringement under the act, including that the defendant was liable under section 41.1 for the trafficking and installation of circumvention devices.
Bill C-244 could permit devices such as mod chips and game copiers to be put back on the market under the auspices of repair. We're deeply concerned that this will make it incredibly difficult for rights holders and law enforcement to pursue legal action against those who traffic in these devices. The burden of proof required would be so high that it would be very, very difficult or virtually impossible to establish liability.
It's also clear, watching the debate on Bill C-244 thus far, that game consoles aren't an area of great concern. I think that speaks to the ease of repairability and consumer satisfaction in this regard. Video game consoles are consistently rated highly for their repairability on websites like iFixit. Most common repairs can be addressed without circumventing TPMs. On top of this, our console makers provide easy, fast, reliable and affordable repair services as well as comprehensive online and off-line networks to troubleshoot issues.
This is an all-encompassing piece of legislation. It doesn't distinguish between a tractor, a fridge or a game console. Similar markets that have right to repair legislation, like some of our friends in the States, do classify different classes. Let me give you two examples: New York's Digital Fair Repair Act, which was recently signed into law by the governor; and Washington state's Bill 1392. Both jurisdictions rightly recognized the unique risk that TPM circumvention poses for our industry and chose to exclude game consoles.
In closing, we're very concerned about the risk posed to our industry and our players. To avoid going backward with protections to IP and to ensure we protect the player experience, we respectfully request that this committee adopt our proposed amendment to exclude game consoles, components and peripherals.
Thank you very much.