Consumer products and IP (Part 6): deriving a copyright for consumer products
Internet Law

Proposed Canadian law to regulate social media companies and streaming giants

Proposed Canadian law to regulate social media companies and streaming giants

In late June of 2021, Members of Canada’s Parliament passed Bill C-10: An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts. The Bill proposes to subject social media platforms and streaming services, collectively described in the Bill as ‘online undertakings’, to requirements similar to those imposed on traditional television and radio broadcasting companies in Canada. For example, this proposal could include requiring these companies to contribute financially to the production of Canadian cultural industries. The proposed changes aim to harness the explosive popularity of social media and streaming sites to support Canadian content online.

Senators declined to pass the legislation before Parliament’s summer recess, meaning that digital and social media companies will have to wait until the fall to learn if their business will be subjected to new regulations or financial obligations.

What would Bill C-10 entail for digital and social media companies?

Currently, the Broadcasting Act (the Act) requires Canadian television and radio broadcasters (such as Rogers) to broadcast a minimum amount of Canadian content and to contribute a portion of their revenues to the Canadian Media Fund, an agency that funds and promotes Canadian content. The Act also sets out the powers of the Canadian Radio-television and Telecommunications Commission (the CRTC) in regulating broadcasting in Canada.

Primarily, the proposed amendments to the Act would give the CRTC new powers to regulate digital forms of broadcasting in ways similar to the existing requirements for television and radio companies. Although the Bill has undergone several major changes, it stands to capture the activities of Canadian and foreign companies providing social media and streaming services and apps in Canada, including those offering music, movies, TV shows, videos, and podcasts. The new requirements would only apply to content provided by the online service provider and not to the social media posts of individual users who are unaffiliated with the service provider, even for users with relatively large followings.

If passed, the amendments would allow the CRTC to impose several significant requirements on social media and streaming companies, likely including:

  • Providing the CRTC with certain information about their business, including their revenue
  • Contributing a specified portion of their revenue to the production of Canadian content or to the Canadian Media Fund
  • Increasing the visibility, or ‘discoverability’, of Canadian content on their platform
  • Paying monetary penalties for non-compliance with the Act or CRTC regulations

The new discoverability requirements are of particular interest to social media companies, as they may give the CRTC the power to regulate the algorithms that determine what users see on their feeds.

Modernizing media regulation

The Bill has important consequences for digital and social media companies operating in Canada. Although the amendments would represent the first major steps to modernize the Act since 1991, they almost certainly will not be the last regulatory efforts to capture the profitability of social media and streaming platforms, and to promote domestic media online. Ultimately, with the promotion of Canadian culture remaining a key principle of Canadian media regulation, social media and streaming companies should consider how the financial obligations, information collection, and discoverability regulations could affect their business in Canada, and should remain up-to-date on how the CRTC defines ‘Canadian’ content.

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