By Ahmad Hathout
Google is asking the Federal Court of Appeal to allow it to argue that the CRTC should have included in its new broadcasting fee regulations an explicit exemption for advertisements that are placed on user-generated content.
The CRTC ordered in March a new way it was going to calculate revenues and collect fees for its operations, lowering traditional broadcasting obligations with the transfer of some of that collection to online platforms in line with the new Online Streaming Act that will bring the latter services under its ambit.
During the intervention phase of that 2023 proceeding, Google asked for the CRTC to explicitly exclude from the revenue calculation advertising that it places on and inside user-generated content, such as ads that play in a YouTube video created by a user. The search engine giant argued that this exemption would bring the regulator in compliance with the new Broadcasting Act and the federal government’s policy direction, both of which exclude from regulation user-generated content.
But the fee regulations did not include that exemption, prompting Google to file Monday a notice of application asking the Federal Court of Appeal to hear its arguments as to why the regulator allegedly erred.
Google will rely on the fact that YouTube is a platform that generates its revenues on user-generated content.
“The CRTC’s decision…relied on the definition of ‘program’ as including advertising,” Google said in its court application. “It used this definition to justify its decision to impose fees on revenues earned by YouTube even if the underlying content (i.e., the program) viewed was uploaded to the social media service by a user. This is an arguable error of law that justifies granting leave.
“In the alternative, if advertisements are a ‘program,’ the CRTC’s decision…fails to consider or give effect to the exclusion for a ‘program that is uploaded to an online undertaking that provides a social media service by a user of the service for transmission over the Internet and reception by other users of the service’ because it does not facilitate YouTube (or any other provider) drawing a distinction between advertisements that were uploaded by users and advertisements that were uploaded by the provider,” it said.
“In YouTube’s case, advertisements are uploaded by users,” it added. “This is an arguable error of law that justifies granting leave.”
The CRTC’s new fee regulations included exemptions to audiobooks, podcasting and video game services but not for services including advertising-based video-on-demand, online news undertakings and online undertakings that provide social media services derived from their own broadcasting activities, such as ad or subscription revenues.
Much of the contention surrounding the Online Streaming Act before it became law was whether social media users were going to be regulated. That prompted Canadian Heritage and the CRTC to publicly state before the release of the policy direction that such content would not be regulated.
Despite that, the CRTC said it will still require social media companies to register with the regulator to monitor their impact on the Canadian broadcasting market.
“The Commission recognizes that the requirement to register may need to be reviewed in the future once the Commission has collected sufficient information on these services, and once it has provided more clarity and resolved a variety of issues concerning these services,” the CRTC said at the time.
