Google, Canadian Government Reach Agreement on Online News Act

Google and the federal government have successfully resolved their dispute over the Online News Act, leading to an agreement that ensures Google will continue sharing Canadian news online. In exchange, the company will make annual payments to news companies amounting to around $100 million.

Earlier reports from Radio-Canada and CBC News indicated the agreement had been reached, and Heritage Minister Pascale St-Onge later confirmed the news, expressing confidence in finding a resolution to address Google’s concerns.

The regulatory framework between the federal government and Google was established earlier this week, according to a government source familiar with the talks. The initial government estimate for Google’s compensation stood at approximately $172 million, while Google valued it at $100 million.

Apart from financial considerations, Google had raised issues concerning what spokesperson Shay Purdy referred to as “critical structural issues” with the Online News Act, also known as Bill C-18. Google opposed the imposition of a mandatory negotiation model for talks with Canadian media organizations and preferred dealing with a single point of contact.

Under the new regulations, Google will be able to negotiate with a single group representing all media, reducing its arbitration risk. Kent Walker, Google’s president of global affairs, expressed gratitude to Minister St-Onge for addressing the company’s concerns and stated, “We are pleased that the Government of Canada has committed to addressing our core issues with Bill C-18.”

The agreed-upon rules will be incorporated into the C-18 legislative framework, set to be unveiled by mid-December. Google remains obligated to negotiate with the media, sign an agreement, and may add unspecified additional service contributions.

While Google had previously threatened to block Canadian news content on its platforms due to the legislation, it did not follow through, unlike Meta, which ceased distributing Canadian news on Facebook and Instagram after ending talks with the government last summer.

The government, seemingly softening its position in response to Google’s threat, argues that the agreement represents a victory and a net gain for Canadian media. The source suggests that the framework for a single negotiation could serve as a model for other countries.

Prime Minister Justin Trudeau welcomed the agreement, describing it as “very good news” and emphasizing the government’s commitment to supporting local journalism. He mentioned that the deal demonstrates Google’s commitment to properly supporting journalists, including local journalism.

The Online News Act, or Bill C-18, applies to digital platforms with 20 million unique monthly users and annual revenues of $1 billion, with only Meta and Google meeting these criteria. Meta’s talks with the government have not resumed, and St-Onge indicated that it’s up to Meta to decide whether negotiations could be reopened.

A Meta spokesperson clarified the company’s stance, stating that it does not plan to allow news on its platforms in Canada while the Online News Act is in effect, citing challenges in complying with the legislation.

CEO of Village Media, Jeff Elgie, expressed satisfaction with Google’s agreement with the government, emphasizing that the fixed pool or fund model, distributed centrally by one bargaining unit, aligns with what was envisioned for the legislation.

As a news organization, CBC/Radio-Canada could benefit financially under C-18, which includes a requirement for CBC to provide an annual report on any compensation for news it receives from digital operators. Minister St-Onge noted that CBC’s eligibility under the bill will become clearer when regulations are released ahead of the bill coming into force on Dec. 19.

CBC/Radio-Canada expresses satisfaction with the federal government’s successful agreement with Google to bolster journalism in Canada.

“By ensuring that news organizations can negotiate fair compensation for the content they create, this agreement marks a very important step towards building a healthy news ecosystem for Canadians. It is also encouraging for countries and news companies all over the world who are facing these same challenges,” the company said in a statement.

In a separate announcement, Google and Alphabet president of global affairs Kent Walker confirmed that Google will not pull links to Canadian news outlets, thanks to the agreement with the government over the contentious Online News Act or Bill C-18. While exact terms are yet to be disclosed, Walker mentioned that the government addressed Google’s previous concerns about creating “uncapped financial liability” for linking to articles. Google will continue sending valuable traffic to Canadian publishers as the exemption process is worked out.

The negotiations involved establishing a streamlined exemption process for companies that meet a “clear commitment threshold,” rumored to involve an annual payout of approximately $100 million to local news companies. The final regulatory language of Bill C-18 will enable Google to negotiate with a single group representing media organizations, reducing the need to work with numerous individual outlets.

The Online News Act, which targets large web platforms, is set to go into effect in December.

Information for this briefing was found via CBC, The Verge, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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