Our testimony at the Standing Committee on Canadian Heritage

Editor's note: On April 20th, 2023, Our President of Global Affairs and Chief Legal Officer, Kent Walker, and Vice President of News, Richard Gingras, met with the Standing Committee on Canadian Heritage to discuss our position on Bill C-18 and answer their questions about our news product tests. This is their opening statement.

Kent Walker, President, Global Affairs & Chief Legal Officer, Google & Alphabet

Good afternoon. Chair, members of the Committee; thank you for the opportunity to appear today. My name is Kent Walker, and I am President of Global Affairs and the Chief Legal Officer of Google and Alphabet. I am joined today by Richard Gingras, Google’s Vice President for News.

Google is deeply committed to Canada. We opened our first office here more than 20 years ago, and today, Google Canada employs thousands of engineers, AI researchers, and sales professionals in Waterloo, Toronto, Montreal, and remotely across the country.

We have been proud to support Canada’s economic growth. In 2021, Google’s products and tools helped provide $37 billion of economic activity for Canadian businesses, publishers, creators, developers, and nonprofits. In the last five years alone, we have provided over $16.5 million in Google.org grants to Canadian charities and nonprofits, helping them expand the reach of innovative digital skills programming, empower Canadians to stay safe online, and build more inclusive economic opportunities for Indigenous communities.

Our commitment to Canada includes engaging constructively on regulation and policy innovation - which sometimes means identifying challenges with proposals we believe may not achieve their stated objectives or could have unexpected negative downstream impacts.

We support thoughtful regulation and advocate across the globe for updated rules on important issues like privacy, responsible AI development, and a balanced international corporate tax system. We also have a responsibility to be clear about the potential impacts of new technology regulation and speak up for the interests of the people and businesses who use our products and services.

Throughout our time in Canada, we’ve collaborated closely with the news industry and provided billions of dollars globally to support the creation of quality journalism in the digital age. Through our programs, partnerships, and products, Google is one of the world’s biggest supporters of journalism.

We all recognize that the internet has completely changed the business models of news organizations. Technology companies, news organizations, and governments need to collaborate to enable a strong future for quality content in ways that don’t disrupt access to the open web.

For over a year now, we have been advocating for practical solutions to our main concerns with Bill C-18. Both Richard and I have been directly involved in some of these engagements. Canada is important to us and we believe a reasonable and balanced solution is not only necessary, but achievable.

In our conversations with the Government and Members of Parliament we have repeatedly offered specific and practical solutions to the issues we have identified. We believe that the legislation could be amended to support journalism and provide consumers with a more diverse range of perspectives, delivered in innovative and accessible formats, without undercutting core principles that allow the internet to benefit Canadians and people around the world.

There are also thoughtful alternatives we believe would be more effective at achieving the underlying policy goals – such as a fund to which Google would contribute but not govern. Proceeds from this fund would be distributed consistent with clear criteria, governed by an independent board of experts, in line with the approach already adopted by Canada through its Journalism Tax Credit.

This is not the path that C-18 is currently on, but it’s not too late, and we want to work with Canadian parliamentarians to get this legislation right.

I want to acknowledge that members of this committee were surprised by our product tests seeking to assess the potential impacts of the legislation, and we welcome the opportunity to address these issues today.

Now let me turn it over to my colleague Richard to discuss Google’s approach to news, our concerns with Bill C-18, and our deep commitment to journalism.

Richard Gingras, Vice President, News, Google

Thank you, Chair. My name is Richard Gingras. I am Google’s Vice President for News. Fifteen years ago I served as publisher of Salon.com, the web’s first digital news offering. I have some appreciation for the evolving market conditions facing publishers.

For over a decade at Google, I’ve worked with journalists and publishers around the world to advance quality journalism. We collaborate closely with the journalism community. We’ve trained a half-million journalists on subjects ranging from journalist security to audience development. We’ve developed tools to help drive subscriptions. We offer free tools to help journalists with investigative work. We’ve created funds to drive innovation around the world. Recently we announced a multi-year fund in Taiwan called the Digital Co-Prosperity Fund crafted with stakeholders across the spectrum with the support of Taiwan’s Ministry of Digital Affairs.

I have also worked closely with dozens of newsrooms and publishers across Canada, including both long-standing legacy publishers and emerging digital players. Canada has the most innovative digital news ecosystem in the world – from the award-winning efforts of the Globe & Mail, to startups like the Discourse and the Narwhal, to the remarkable profitability of Village Media’s network of local news sites in more than one hundred communities across Canada.

We, and many others, are concerned with the impact of Bill C-18 on the evolution of journalism in open societies. It would make it more difficult for digitally innovative, entrepreneurial journalists and publishers to enter the market and help Canadians understand important issues in their communities.

C-18 would make Canada the first country in the world to put a price on free links to webpages, setting a dangerous precedent that is contrary to the long-term interests of both Canadian readers and Canada’s independent press.

Last year, we sent more than 3.6 billion visits to Canadian news publishers, helping grow their audiences and make money through ads and subscriptions. This referral traffic was valued at $250 million last year alone.

Putting a price on links, as C-18 does, will naturally cause any company to reconsider how they use them.

Take Google News, for example, a specialized aggregator and search service that I expect many of you are familiar with. It was created to help users discover multiple stories from diverse sources.

Please understand that Google News, like Google Search, do not distribute articles from news publications. We only provide a link and a short snippet of text, often only the headline. Google News, like Google Search, is a newsstand that publishers don’t pay to be on, quite different from the prior world of print. We send millions of visitors to their sites for free. Google News costs us millions to operate, yet it delivers zero revenue. If we must pay publishers simply for linking to their sites, making us lose money with every click, it would be reasonable for us, or any business, to reconsider why we would continue to do so.

C-18 would subsidize large legacy organizations and broadcasters to a far greater extent than smaller, emerging, and innovative organizations that provide quality local news to communities, placing them at a comparative disadvantage.

It would incentivize the creation of clickbait content over high-quality local journalism and likely require Google to pay publishers for non-factual or misleading content.

If C-18 is passed in its current form, it may affect our ability to provide products and services that Canadians use and enjoy every day. To understand that impact, and our options, we ran tests, based on the current wording of the Bill. Those tests limited the number of news links for 3.3 percent of Canadian users, selected at random, for five weeks.

Many of you have questions about these tests. I hope to provide more clarity on what they involved and why we ran them.

We are committed to enabling a sustainable future for news in Canada. But this Bill threatens to create a situation where everybody loses. We want to work together to ensure that doesn't happen.

We welcome your questions and look forward to continuing our engagement.