Policy Statement on Foreign Investment Review in the Interactive Digital Media Sector

The Government of Canada is providing additional clarity about how the Investment Canada Act (the Act) will be applied to investments in Canadian businesses and in certain entities in Canada in the interactive digital media sector.

Recognizing that hostile state-sponsored or influenced actors may seek to leverage foreign investments in the interactive digital media sector to propagate disinformation or manipulate information in a manner that is injurious to Canada's national security, this policy provides guidance on the review of such investments under the Act.

Canada has a thriving interactive digital media sector, which attracts significant foreign investment. The nature of interactive digital media and its prominent role in everyday life introduces a heightened risk of information manipulation. Information manipulation includes, but is not limited to, the omission of facts, inauthentic amplification of narratives, doctored audio/visual content, trolling, and efforts to censor or coerce self-censorship of information.

For the purpose of this policy, interactive digital media includes, but is not limited to, digital content and/or an environment in which users can actively participate or that facilitates collaborative participation among multiple users for the purposes of entertainment, information or education, and commonly delivered via the Internet, mobile networks, gaming consoles or media storage devices. Examples of activities that fall under the category of interactive digital media include, but are not limited to, video gaming (including online gaming, consoles) and technology platforms that can be used for entertaining, education, training, and e-commerce (including some mobile apps, virtual and/or extended reality devices).

Net Benefit

For more information regarding the conduct of net benefit reviews under the Act, by the Minister of Canadian Heritage, of investments in this sector, please see the Policy Regarding Foreign Investments in Cultural Businesses in the Interactive Digital Media Sector under the Investment Canada Act.

National Security

All foreign investments, including greenfield and minority investments – regardless of value – may be subject to the national security review process set out in Part IV.1 of the Act.

Given the heightened risks of state-sponsored or influenced information manipulation, foreign investments by entities owned or influenced by foreign states, particularly hostile states, in the interactive digital media sector will be subject to enhanced scrutiny under the Act.

Some factors that can be considered in assessing whether a particular transaction in the interactive digital media sector would be injurious to national security include:

  • the reach and audience of the product's content;
  • whether the products have online elements (such as in-game chat logs, in-game purchases, microphone/camera access);
  • the nature and extent of the investor's ties to a foreign government;
  • whether the Canadian business is likely to be used as a vehicle by a foreign state to propagate disinformation or censor information in a manner that is inconsistent with Canadian rights and values through the investment;
  • the composition of the board of directors of the Canadian business;
  • the degree of control or influence the investor would likely exert on the Canadian business, including its products' content.

In light of this, the Government of Canada recommends that all non-Canadian investors and Canadian businesses in these sectors to review their investment plans to identify any potential connections to entities owned or influenced by foreign states, particularly hostile states. Investors are strongly encouraged to consult ISED's Investment Review Division at least 45 days in advance of implementing any investment.