Google has agreed to pay news media in Canada $100 million annually for sharing links to their pages on its platforms, following the passing of the Online News Act. This new law mandates digital giants to compensate news outlets for their content.
The Online News Act, which became law on June 22, 2023, and is set to take effect on December 19, requires digital platforms with 20 million unique monthly users and annual revenues of $1 billion or more to negotiate with news outlets for sharing links to their pages. Only Google and Meta, which owns Facebook and Instagram, meet these criteria in Canada.
The law encourages platforms to voluntarily negotiate with media outlets. If a platform cannot reach an agreement, the law mandates participation in mediation. If mediation is unsuccessful, an arbitration process would assess proposals from the platform and the impacted news services. The arbitration panel would then select one of the offers.
Instead of engaging in negotiations with individual news organizations, Google opted to strike a direct agreement with the Canadian government. Under the terms of this deal, Google consented to an annual payment of $100 million, adjusted for inflation, to Canadian news media. This payment is in return for the continued sharing of links to pages of Canadian news outlets.
“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,” Google Canada stated.
The agreement resolves the tech giant’s concerns over the Online News Act, which mandates big companies to share advertising revenue with publishers. Google had expressed concerns about what Purdy called “critical structural issues” with the Online News Act. The company said it would not have a mandatory negotiation model imposed on it for talks with Canadian media organizations, preferring to deal with a single point of contact.
The new regulations will allow Google to negotiate with a single group that would represent all media, allowing the company to limit its arbitration risk. The rules will be added to the C-18 legislative framework, which must be unveiled by mid-December. Google would still be required to negotiate with the media and sign an agreement.
The digital giant could also add additional service contributions, which have yet to be specified. Google had threatened to block Canadian news content on its platforms as a result of the legislation. But unlike Meta, which ended its talks with the government last summer and stopped distributing Canadian news on Facebook and Instagram, Google has not blocked news in Canada.
Details of how the $100 million in compensation will be managed and distributed have not yet been published. As a part of the deal, Google provided assurances that Canadian news outlets would be treated fairly in comparison with deals it might strike with news media in other countries. A government statement said that if news outlets abroad strike a better deal with Google, the company would go back to the federal government “to resolve any concerns”.
Canada’s heritage minister, Pascale St-Onge, has requested an explanation from Meta regarding their choice to restrict news sharing within Canada. She also mentioned that Canada is open to renegotiating its deal with Google if more favorable agreements are established elsewhere globally. Recently, Google finalized a deal to compensate a consortium of German publishers with an annual sum of 3.2 million euros (equivalent to $3.5 million) for using their news content.
However, Meta’s decision remains unchanged, according to a company statement. “Unfortunately, Meta continues to completely abdicate any responsibility towards democratic institutions. “Canadian Prime Minister Justin Trudeau said.
The Online News Act was introduced by the Trudeau government as a way to support journalism that drives civic engagement, counters disinformation, and upholds democracy. The law was inspired by similar legislation in Australia and France, where digital platforms have also been required to pay for news content. The law has been praised by some as a landmark achievement for media diversity and sustainability, but criticized by others as a threat to the free flow of information and innovation on the internet.
Relevant articles:
– Google Strikes $100M Online News-Sharing Deal With Canada After Standoff
– What we know so far about Google’s $100M media fund | CBC News
– Google to pay Canada news publishers $73m a year to keep news in search
– Federal government reaches deal with Google on Online News Act