CRTC Incurs It’s First Lawsuit Over Bill C-11 From Google

It was going to happen sooner or later, but Google has filed a lawsuit against the CRTC over Bill C-11.

One of the things I’ve said from the very beginning of the Bill C-11 debate is that the then legislation turned Online Streaming Act is that it is inevitably going to incur legal action. Today, I learned that this is yet another prediction of mine that came true. At the centre of it all is the fees it has to pay for the right to exist in Canada.

As you know, a major controversial aspect of the Online Streaming Act is the massive theft of both audiences and revenue for those that create user generated content on platforms like YouTube. As we’ve been saying since 2021, the Online Streaming Act mandates that content produced by the cultural elite in this country take over the top results of every search and home page of users. This, in turn, downranks the content of creators who are native to these platforms, thereby stealing the audience of content creators and trying to hand it over to the cultural elite that audiences have already been working to avoid. This thanks to the meddling of the algorithms by the CRTC – something that former CRTC chair, Ian Scott confirmed.

What is a bit less talked about, but pointed out all this time by people like myself, is that the Online Streaming Act also steals creators revenues on top of it all. Canadian creators, after reaching a threshold of subscribers and watch time, can take advantage of partnership programs where they can monetize their content on YouTube. Similar programs are available on other streaming platforms like TikTok and Twitch. The problem is that the cultural elite such as Bell Media and the CBC feel that the ad revenue that creators make on platforms, well, belongs to them because money should be heading to them no matter what. So, they effectively steal portions of that revenue for themselves even though they had nothing to do with the generation of that revenue.

The Canadian regulator overseeing all of this, the CRTC, has apparently ordered YouTube to fork over that user generated content revenue. This despite Google’s submission asking, among other things, to have the Online Streaming Act supports the digital ecosystem rather that siphons money from creators who need it the most and redirects that money to those who need it the least. Obviously, the CRTC, the poster child of regulatory capture by the cultural elite, ignored that call and basically said that money and success is for other people and not those pesky online creators that the CRTC has long been gunning to financially ruin.

A report from the Canadian Press says that Google has complied with the original order to remove the revenues earned by Canadian creators and forked it over to the cultural elite. However, along with it, Google has filed a lawsuit against the CRTC over the affair:

TORONTO — Google is taking Canada’s broadcasting regulator to court, arguing “significant” revenue it earns from advertisements on YouTube videos shouldn’t be considered when it comes to the regulatory fees it owes the CRTC.

In an application filed in the Federal Court of Canada on April 24, Google says those revenues come from user-generated content, which it argues should be excluded from fee calculations because of exemptions in the Broadcasting Act.

Google says it abided and refiled the form with the revenue it had initially subtracted, but maintains its position that those fees should be exempt from the total.

It is asking the court to quash the CRTC’s order as “unreasonable” and declare its original form as compliant with the regulations.

So, Google is really trying to represent the interests of creators here. Lobbyists have long falsely claimed that the Online Streaming Act excludes user generated content. Obviously, the way that the Online Streaming Act is worded, user generated content is very much included in the bill. Experts and observers alike never bought that talking point and every stage kept repeatedly proving this point. Google, for their part, is more or less calling the bluff and put the CRTC in a very tricky spot by forcing them to argue in court how user generated content is very much part of the regulation.

Obviously, user generated content should never have been part of the legislation in the first place. There is a chance that this lawsuit could morph into a question of whether or not the CRTC has jurisdiction to regulate the open internet to the point where it is dictating that digital first creators should be suppressed both in discoverability and revenue generation. At the very least, this lawsuit seems to represent a question for the latter part of all of this.

Now, as Peter Menzies noted, this latest legal action puts into question just how quickly the CRTC can move forward with implementing the Online Streaming Act in the first place. The CRTC had long argued throughout the senate hearings of this legislation that regulating the internet was no big deal. They contended that they didn’t need any additional man power to carry out this monumental task (arguably, fools errand). The claims were always laughable and as time went on, the reasons to believe that such claims were laughable kept being proven right.

In August of last year, that CRTC bravado of how easy it was to regulate the internet took a huge hit when the regulator announced that it would be clearing its schedule for two whole years just to work on the implementation of the Online Streaming Act. Things just got worse and worse from there. After the initial round of consultations, the next round got delayed and delated some more. Multiple organizations from all sides of the debate asked for clarification on timeline of the consultations, but were greeted with radio silence. Then, earlier this month, the CRTC revamped their timeline and pushed back the target date of their implementation by a whole year – clear into late 2025.

Of course, the implementation of the Online Streaming Act being late 2025 was also an optimistic figure because it doesn’t take into account any kind of legal action. Now that a lawsuit has been filed against the CRTC, implementing the Online Streaming Act implementation is much more likely to get further delayed.

For creators, all of this is good news because it means that they can carry on with business as usual for now and into the foreseeable future. Any kind of delay in the implementation of the Online Streaming Act is excellent news. Their content will perform as they always have. While the ad revenue they earn might be a bit more of a question mark now, all of these delays means that their careers are largely getting left alone from the destructive meddling of the CRTC.

If anything, the lawsuit signals that Google is willing to file a lawsuit to fight against this terrible law. Even better is the fact that Google is willing to represent the interests of creators on court over top of it all. After all, Google could’ve very easily just forked over the revenue without resistance, leaving Canadian creators high and dry because it’s just easier to let them fend for themselves. Google, however, clearly chose otherwise which is good news here. As we move further down the line in this CRTC process, it’s entirely possible that other lawsuits could be forthcoming as well. That promises to, at minimum, delay the implementation of the Online Streaming Act even further. After all, legal action is known to take years to sort out more often the not. For Canadian creators in this debate, they’ll take any bit of good news they can get their hands on these days

Drew Wilson on Mastodon, Twitter and Facebook.