Google and Canada have successfully negotiated a deal to avoid a potential news blackout prompted by the Online News Act, a law that mandates tech giants to pay for news content.

The agreement comes in the wake of Google’s initial threat to remove news links in Canada in response to the impending legislation, which was set to take effect on December 19.

This move mirrors the actions of social media giant Meta, the parent company of Facebook and Instagram, which has already implemented news content restrictions due to the same law.

Months of discussions between Google and Canadian authorities culminated in this agreement. The Online News Act, primarily directed at Google and Meta, necessitates tech companies to engage in negotiations with news outlets for payment agreements.

The deal, unveiled on Wednesday, outlines that Google will annually pay C$100 million (£58 million, $74 million), with this amount indexed to inflation, to various news outlets.

Canadian Heritage Minister Pascale St-Onge, in an announcement on Wednesday, detailed that the allocated funding would support a broad spectrum of news businesses across the country.

This includes independent news organizations and those representing Indigenous and official-language minority communities.

The funds will be managed by a “single collective,” which will distribute them to eligible news agencies based on the number of full-time equivalent journalists employed by these businesses.

St-Onge emphasized the importance of a sustainable news ecosystem, stating that the health of the Canadian news industry is currently at risk due to newsroom closures and worker layoffs. Google, in response, expressed satisfaction with the Canadian government’s commitment to addressing their core concerns.

In their statement, Google confirmed their cooperation with the government through the exemption process, based on forthcoming regulations. Additionally, they pledged to continue directing valuable traffic to Canadian publishers.

The Online News Act faced opposition from tech companies when it was passed during the summer, with Google labeling it as “unworkable.”

They argued that the unprecedented decision to put a price on links disrupts the fundamental functioning of the web and search engines. Conversely, many media groups hailed the legislation as a positive step toward achieving market fairness.

Meta had initiated restrictions on Canadian news content on Facebook and Instagram starting from August 1.

Users attempting to access news on these platforms were met with messages indicating that they couldn’t view content in Canada or any related posts.

Estimates suggested that news organizations stood to earn as much as C$329 million per year from digital platforms following the law’s passage.

The final compensation figure of C$100 million resulted from what Google described as “extensive negotiations.”

According to St-Onge, Google sought certainty regarding the compensation amount payable to Canadian news outlets.

The situation drew parallels to events in Australia in 2021 when users were temporarily blocked from sharing or viewing news on Facebook in response to a similar law.

Subsequent amendments to the law led to negotiations, with Google and Meta securing over 30 deals with Australian media companies, ending the news blackout.

 

 

Last Updated: 30 November 2023