Google Takes Stand against Canadian News Bill, Vows to Remove Local News Content from Platforms

Google (NASDAQ: GOOGL) has announced that it will remove Canadian news content from its platforms in Canada in response to the Liberal government’s recently passed Online News Act.

The decision comes after negotiations with the federal government failed to resolve the tech company’s concerns about the legislation, called Bill C-18. Similar to its fellow tech titan Meta (NASDAQ: META), Google is resisting the new law, which mandates conglomerate online platforms to negotiate with Canadian media publishers for sharing and directing users to online news content.

The Canadian government, for its part, asserts that the law aims to curtail the dominance of these tech companies in the digital advertising market, with financial penalties ensuing should they fail to comply.

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Google president of global affairs Kent Walker outlined the company’s stance in a blog post, noting that Google had warned for over a year that this legislation might bring substantial alterations to their products, given its approach to supporting journalism in Canada. According to Walker, the new law makes it unfeasible for Google to offer its Google News Showcase product in the country.

“Bill C-18 has become law and remains unworkable”, he wrote. “A result, we have informed the Government that we have made the difficult decision that when the law takes effect we will be removing links to Canadian news from our Search, News, and Discover products and will no longer be able to operate Google News Showcase in Canada.”

The Online News Act seeks to rebalance the digital advertising market, which in 2020 saw Google and Meta secure more than 80% of Canadian online advertising revenues. The law comes as a response to the challenges faced by the journalism industry in the country, with hundreds of closures reported. Violating this legislation would lead to financial penalties.

While the bill will likely become law in six months, Google has asked the government for explicit assurances before the regulatory process begins. The company seeks clarity on the financial expectations for simply linking to news and a viable path towards exemption based on their programs to support news and existing commercial agreements with publishers. Google has also voiced concerns about forced payment for links and unlimited financial liability under the new law.

Google and Meta’s responses to the Online News Act could potentially lead to significant revenue losses for Canadian news publishers, possibly resulting in the closure of some smaller and independent organizations. The platforms have argued against the law since its inception, stating that they help drive substantial traffic to online news outlets, thereby creating substantial revenue for publishers.

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Heritage Minister Pablo Rodriguez expressed understanding for the need for certainty and clarity and showed willingness for further discussions. However, these talks have hit an impasse, with Google stating that the company is far from reaching an agreement.

“I understand that they need more certainty, they need more clarity, which from a business perspective, makes a lot of sense. I always base my decisions and my actions on common sense. If it’s logical, if it makes sense, then I’m definitely ready to discuss and see what we can do together,” he said, as cited by the Toronto Star.

In comparison to Google’s more measured approach, Meta has already announced that it will ban news content from being posted or shared on Facebook and Instagram in Canada. Meta Canada’s head of public policy Rachel Curran has said the government can no longer resolve the standoff via regulatory alterations because the bill was passed without the company’s proposed amendments.

Information for this briefing was found via Google and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. 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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