Google has agreed to pay C$100mn a year into a fund to support Canadian news organisations as a part of a deal with the government, ending a dispute which led to cut links to news from its services.
The C$100mn (US$73.6mn) pact ends a six-month stand-off following the passage of an online news law designed to funnel some of the cash that Google and Meta, the parent of Facebook and Instagram, make from online advertising to support the finances of news organisations.
The argument blew up into the biggest conflict between the national government and internet giants, over news subsidies since Australia became the first country to pass a law on the issue in 2021.
In Canada, early this year, Meta suspended links to news stories in protest at the law, and Google threatened to follow suit when the law goes into effect in mid-December unless the government diluted the impact of the legislation.
The search giant dug its heels in against being forced to pay for news links in its services, which it feared would set a precedent that could be applied to other types of online links. Rather than hurting the news companies, the internet giants have always said that their links deliver valuable traffic to news sites, with Google claiming its news links are worth C$250mn a year to Canadian publishers.
However, the main aim of Canada’s Online News Act was to bring fairness to payment for online news following a huge shift in the online advertising market to Google and Meta. Recommended Digital Media Meta axes support for news inEurope, Google also objected that the Canadian law would leave it with open-ended financial liability, since it would be forced to negotiate with each publisher individually and would face an arbitration process the company believed would be stacked against it.
Pascale St-Onge, minister of Canadian heritage, said that the agreement would help the news sector and allow Google to continue to play an important role in giving Canadians access to reliable news content. Google’s payments would be made to a collective fund, which will end the need and negotiate with each publisher individually.
Early this year, Canadian officials estimated that the act would need Google to pay C$172mn to publishers. It was unclear, whether the final regulations under the act, which are due to be released before it goes into force on December 19, would still amount to Google paying for carrying links — there are times when the company has strongly opposed to. Meta said that the deal with Google would make no difference to its decision to block news links in Canada. Unlike search engines, we do not pull news from the internet to place in our users’ feeds and the only way which we can reasonably fulfill the Online News Act is by ending news availability for people in Canada.
