Ottawa reaches deal with Google over contentious Online News Act

Google had previously stated it was considering removing Canadian news content from its search engine around Dec. 19, the date Bill C-18 comes into effect.

Thestar.com
Nov. 30, 2023
Raisa Patel

The Liberal government and Google have come to an agreement over Ottawa’s contentious online news law, averting a scenario that would have seen the tech giant yank all Canadian news content from its search engine in several weeks’ time.

“Google wanted certainty about the amount of compensation it would have to pay to Canadian news outlets, and I can say today that Google will be compensating our news organizations with $100 million annually, and it will be indexed to inflation,” Heritage Minister Pascale St-Onge announced Wednesday.

The federal government passed the Online News Act, previously known as C-18, earlier this year in an attempt to end tech giants’ dominance of the digital advertising market, which Ottawa has argued is pulling revenues away from Canada’s beleaguered journalism industry. (Torstar, which publishes the Toronto Star, is in favour of the legislation.)

The law was panned by Google and Facebook’s Meta because it would compel them to enter into deals with Canadian media publishers for sharing and previewing online news content. The companies argued the legislation unfairly forces them into unclear payment deals for driving key traffic to news outlets and generating revenue for publishers as a result.

Google, which had called the legislation “unworkable” and said the government’s regulatory process to hammer out the final details of the law was ill-equipped to address its concerns, said Wednesday it was satisfied by the agreement.

“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,” Kent Walker, the company’s head of global affairs, wrote in a statement.

While the Liberals sought to frame its announcement as a “historic development” that sets out a foundation for a commercial relationship between tech giants and publishers, the terms of the agreement actually mark a victory for the global search giant.

Under a formula set out in the government’s draft regulations that would spell out how much platforms would be expected to pay, it was estimated Google would contribute about $172 million a year to news publishers.

The number the government agreed to is $100 million -- a figure similar to Google’s own estimation of what it would accept.

“It’s $100 million that doesn’t exist right now in the system. It’s new money, new revenue,” St-Onge said.

“And the other thing is, if there is a better deal struck elsewhere in the world, Canada reserves the right to reopen the regulations.”

Marla Boltman, the executive director of the media advocacy group FRIENDS, said that while the deal was sorely needed, it “will not deliver the kind of support to Canadian journalism” that the organization had ultimately hoped for.

“We will be looking to the regulations to ensure that smaller, independent and equity-seeking media groups are assured access to funding,” Boltman said in a statement.

“Since this deal confirms that the Online News Act will not be a panacea for protecting Canadian journalism, other tools to provide support for news must be put in place, the first of which should be through contribution requirements from foreign online platforms in the first stages of the implementation of the Online Streaming Act.”

The law is set to formally come into effect Dec. 19, after the final regulations are published.

Google outlined a slew of problems it saw with the legislation as the regulatory process unfolded, even writing in its submission to the government that its draft terms exacerbated some of its existing concerns.

The company took issue with the mandatory bargaining model set out in the law, the implication that it would be forced to pay simply for linking to news content, and what it said was a lack of clarity over financial liability and exemptions from the regime.

The government said Wednesday that Google has the option to work with a “single collective” that would facilitate deals with “interested eligible news businesses based on the number of full-time equivalent journalists engaged by those businesses.”

Such businesses include independent outlets, and those from Indigenous and official-language minority communities.

St-Onge also addressed criticisms over whether CBC, which is publicly funded, ought to benefit from a share of the cash.

“We took that into consideration in the final regulations that will be published a few days before the law comes into effect,” she told reporters.

Prime Minister Justin Trudeau said the deal would “resonate around the world” as other jurisdictions look to backstop their shrinking media landscapes.
He took particular aim at Meta, which responded to the legislation by blocking domestic and international news content for Canadians on Facebook and Instagram earlier this year.

“Unfortunately, Meta continues to completely abdicate any responsibility towards democratic institutions and even stability, but we’re going to continue to work positively in those areas,” Trudeau said.

St-Onge said it was now up to the social media giant to “explain why they’re leaving their platform to disinformation and misinformation instead of sustaining our news system and participating in the viability of our news sector.”

Unlike Google, Meta chose to comply with the legislation by severing its ties to Canadian news content altogether, stating the move is likely permanent.