Canada’s standoff with tech giants Google and Meta over their use of national news content has eased on one front, as the federal government announced Wednesday it had reached a deal with Google to compensate publishers in Canada.
The deal comes just weeks before a national law takes effect that will require tech companies to pay news outlets for using their online content.
Under the agreement, Google will provide $73.5 million, or C$100 million, annually to news organizations, including independent news outlets, indigenous media and multilingual media.
The funds will be based on the number of workers distributed to each employee of a government-qualified news outlet, officials said. (Last quarter, Alphabet reported revenue of $76.7 billion.)
“This is a historic development,” said Pascale St-Onge, Canada’s heritage minister, whose department helps oversee regulation of the technology. “It will establish a more equitable business relationship between digital platforms and journalism in Canada,” she said, adding that the new revenue is “good for the news industry.”
“Following extensive discussions, we are pleased that the Government of Canada is committed to addressing our key issues,” Kent Walker, president of global affairs at Google and Alphabet, said in a statement.
The government’s talks with Meta remain at an impasse.
“Unlike search engines, we do not proactively extract news from the Internet and place it in our users’ feeds, and we have long been clear that the only way we can reasonably comply with the Online News Act is to end the availability of news to people in Canada,” Scott Reid, a spokesperson writing on behalf of Meta, said in an emailed statement.
The funds announced Wednesday were significantly lower than previous forecasts shared by the government. In September, it valued that Google would provide about $126 million, or $172 million Canadian, to news organizations, and last fall said in a parliamentary budget postponement that media companies could expect to see a total of C$329 million in new funding from both Google and Meta.
“It’s hard to see it as a big win,” said Michael Geist, an Internet and e-commerce law researcher and professor at the University of Ottawa, adding that the outlines of the deal are similar to what Google proposed a year ago and that the government came to the table “in an attempt to save its legislation”.
“It’s generating a fraction of what the government had anticipated, and it’s actually creating some significant costs along the way,” Professor Geist said.
Canada’s national public broadcaster, CBC, said it was “very pleased” with the deal and believes it is an encouraging financial development for other news companies, Leon Mar, a spokesman, said in an email.
The online news law, modeled on a similar law in Australia, has faced a backlash from tech companies including Meta, which owns Facebook and Instagram, and in August began blocking news content from users’ feeds Canadians.
Meta argued that the law was based on a flawed premise that the company would unfairly benefit from hosting news platforms and said this generated huge readership for media companies.
The law comes into force at a time when the news industry in Canada, as in much of the world, is shrinking under pressure from falling advertising revenues and dependent on social networks for much of its readership.
In reaching a deal with Google, Canadian officials said they were following similar negotiations between other governments and the tech company. Germany recently announced a 3.2 million euro agreement with Google involving German newspapers.
“If a better deal is reached elsewhere in the world, Canada reserves the right to reopen the regulation,” St-Onge said.
Google also threatened to block access to news in Canada, but agreed to continue negotiations with the government. Prime Minister Justin Trudeau said talks with Meta are at an impasse.
“Unfortunately, Meta continues to completely abdicate any responsibility to democratic institutions and even stability,” he told reporters in Ottawa on Wednesday.
The controversy highlights the “tremendous power” of tech giants over the Canadian media ecosystem, which is still unresolved given the pending issue with Meta, said Blayne Haggart, a political science professor at Brock University in St. Catharine, Ontario.
“They were able to credibly threaten the entire Canadian journalism sector because they were angry at a law that, if we’re being honest, is not that big of a deal in terms of demand,” he said.
The details of the agreement will be defined in the next regulations. Those details will cover the distribution of the funds and the government’s requirement that Google not “unduly discriminate against Canadian news organizations,” Professor Haggart said, referring to the way the company populates search results.
