Google has reached a deal with the Canadian government over a controversial new law that will force tech companies to pay news publishers when their content is shared on online platforms. Google and Meta previously threatened to block links to news content in Canada altogether in response to the law. The deal is the first sign of compromise between Canada and Silicon Valley. If it works out, it could set a precedent for similar laws across the globe.
Canada’s Online News Act, which goes into effect in just three weeks, is meant to address a growing crisis in the news business: more and more of the profits generated from advertising get swallowed up by tech behemoths. The Canadian government previously estimated the law would cost Google $127 million CAD, but the deal will reportedly bring the costs down to $100 million CAD (about $111 million AUD), according to a report by the CBC.
The law is narrowly tailored to target Google and Meta and no one else, at least initially, because it only applies to tech platforms with 20 million unique monthly users and annual revenues of $1 billion CAD.
“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,” said Kent Walker, Google’s President of Global affairs, in a blog post on Wednesday. “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.”
The last news from Google was that negotiations with Canada had fallen apart. In June, Walker wrote that Google would rather shut off links to news content than pay publishers.
According to the CBC, Meta hasn’t resumed talks with the government over the issue. Meta did not immediately respond to a request for comment.
Canada isn’t the first government to experiment with a law that forces big tech to share the wealth with newsies. When Australia floated a similar law in 2021, Meta scrubbed news from its platforms for users in the country. Whistleblowers said the company went even further to punish Australians and attempt to force regulators to water down the law by blocking links to hospital and fire services on Facebook and Instagram, causing a small amount of chaos in the country. The ploy seemingly worked; Australia amended the law to let companies like Google and Facebook strike deals with publishers rather than pay a flat rate.
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