Explained: Canada's Law Making Big Tech Pay For News, Its Deal With Google

Canada's bid to give the struggling journalism industry a leg-up with the passage of the Online News Act in June brought it at loggerheads with Big Tech, specifically Google and Meta. Faced with the prospect of paying news organisations for their content hosted on the companies' platforms, Google and Meta threatened to block news from Canadian outlets and Meta - which runs Facebook and Instagram - made good on its threat in August.

While Facebook reportedly lost little or no audience, the ban hit news companies hard with many portals seeing a dramatic fall in readership. Canadian authorities had shown signs of relenting following the ban threats, and a major breakthrough has now been achieved with Google and the government agreeing on a framework that would establish regular payments by the company to help Canadian media. This will ensure that content from the outlets stays in Google search results.

The search giant has reportedly agreed to pay news outlets Canadian $ 100 million (US $ 74 million) a year against the over $ 170 million (US $125 million) that the federal government had sought.

"This agreement is going to resonate around the world in countries and democracies struggling with the same challenges that our media landscape in Canada is facing," Prime Minister Trudeau was quoted as saying by news agency AFP.

Origins

The Online News Act, which will come into force in December, aims to ensure that platforms compensate news businesses when their content is made available by them.

"The Act creates a bargaining framework to ensure that platforms compensate news businesses fairly. It encourages platforms to reach voluntary commercial agreements with a range of news businesses," the Canadian government says on its website.

"If parties are not able to come to fair agreements independently, they would have to proceed to a mediated mandatory bargaining process. If, after mediation, the parties are still unable to reach an agreement, each party would submit a final offer, and an arbitral panel would choose one of the two offers," it states.

Also called Bill C-18, the law had been demanded for many years by news organisations, who had seen their revenue dwindle with the increasing popularity of Google News and social media platforms. Outlets had contended that since Google, Meta and other companies were making money off content produced by them, a slice of it should also make its way back to the news organisations themselves.

The companies had hoped to earn Canadian $ 250 million per year with the passage of the law.

Australia Link

The world's first law seeking to make mega technology companies pay for the news hosted by their platforms was passed by Australia in 2021. The law, which faced massive opposition from Google and Facebook, aimed to "ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public-interest journalism in Australia," the government had said in a statement. 

Google and Meta had made similar threats to withdraw links from their platforms but agreements were reached and an estimated $132 million has reportedly been paid to news outlets.

Several other countries, including India, toyed with the idea of making a law along similar lines, and Canada decided to go ahead with its passage.

Terms Of The Deal

The agreement will give Google the option to negotiate with a single group representing all Canadian media, rather than seeking to secure one-on-one deals that could have resulted in bigger payouts, AFP reported. 

The money will then be divided based on the number of full-time journalists employed by each publisher and broadcaster.

"This is a good outcome, for sure," Brent Jolly, president of the Canadian Association of Journalists, told AFP.

"For more than a decade, news organisations have been disrupted by the arrival of large digital platforms like Google. In Canada, nearly 500 media outlets have closed their doors and thousands of journalists have lost their jobs," the report quoted Heritage Minister Pascale St-Onge as saying. 

"Today, I'm announcing that we have found a path forward with Google" to implement the Online News Act, she said.

"This is a historic development. It will establish a fairer commercial relationship between digital platforms and journalism in Canada."

Companies' Take

Google had dubbed the regulations "the wrong approach to supporting journalism in Canada" and warned that they could lead to "significant changes" in their products.

"We have now informed the Government that when the law takes effect, we unfortunately will have to remove links to Canadian news from our Search, News and Discover products in Canada, and that C-18 will also make it untenable for us to continue offering our Google News Showcase product in Canada," the company had said. 

In a statement on its website on Wednesday, Google Global Affairs president Kent Walker said, "We thank the Minister of Canadian Heritage, Pascale St-Onge, for acknowledging our concerns and deeply engaging in a series of productive meetings about how they might be addressed. Following extensive discussions, we are pleased that the Government of Canada has committed to addressing our core issues with Bill C-18, which included the need for a streamlined path to an exemption at a clear commitment threshold."

"While we work with the government through the exemption process based on the regulations that will be published shortly, we will continue sending valuable traffic to Canadian publishers," the statement added.

Meta complained that the legislation was based on the "incorrect premise that Meta benefits unfairly from news content shared on our platforms, when the reverse is true."

On August 1, it said, "In order to comply with the Online News Act, we have begun the process of ending news availability in Canada. These changes start today, and will be implemented for all people accessing Facebook and Instagram in Canada over the course of the next few weeks."

"News outlets voluntarily share content on Facebook and Instagram to expand their audiences and help their bottom line. In contrast, we know the people using our platforms don't come to us for news," the company had said.