- Canadian journalism has been equitably ushered into the digital age after Google, owned by Alphabet (NDAQ:GOOG), agreed to pay C$100 million per year to carry Canadian news content, including local papers, broadcasters and Indigenous and Francophone news groups
- The deal, prompted by the Online News Act (Bill C-18), avoids an expanded ban of Canadian news on Google
- Meta’s censorship of Canadian news remains in place as Bill C-18 is set to pass into law on Dec. 19
Canadian journalism has been equitably ushered into the digital age after Google, owned by Alphabet (NDAQ:GOOG), agreed to pay C$100 million per year to carry Canadian news content, including local papers, broadcasters and Indigenous and Francophone news groups.
The news follows lengthy negotiations between Heritage Minister Pascale St-Onge, Google’s U.S. executives and Google’s Canadian team surrounding the Online News Act, or Bill C-18, which requires large digital venues to pay for news and even out their lion’s share of online advertising revenue. Similar legislation has passed in Australia and is under consideration in the United States.
The C$100 million figure will be indexed to inflation and distributed through a fund to news organizations based on how many full-time journalists they have on staff. Google will also continue to offer training resources to Canadian news outlets.
In Google’s view, the deal satisfied its core demands and concerns with the Online News Act, including a reduction in the final payment from the original C$172 million figure in proposed regulation earlier this year, and the fund-based approach, as opposed to individual payments to news businesses.
Google had threatened to block Canadian news content on its platform, and went as far as carrying out tests on 1 million Canadians that prevented them from accessing news through its search engine.
The Online News Act gained royal assent in June and will become law on Dec. 19. Meta, the only other company that falls under the bill, began blocking Canadian news on Facebook and Instagram earlier this year.
While regulations in the bill are still to be finalized, and will only be made public upon approval by the Treasury Board, news of Google’s deal with the federal government was well received.
Key commentary on Google’s compensation for Canadian news
“After months of holding strong, of demonstrating our commitment to local journalism, to strong independent journalists getting paid for their work … Google has agreed to properly support journalists, including local journalism,” Prime Minister Justin Trudeau said on his way into Wednesday’s question period.
“Unfortunately, Meta continues to completely abdicate any responsibility towards democratic institutions and even stability, but we’re going to continue to work positively in those areas,” Trudeau added.
The Canadian Association of Broadcasters hopes the deal “establishes the right precedent for other digital platforms that make use of Canadian news content. Our democracy depends on innovative solutions to ensure the longevity of our essential news businesses.”
Professor Michael Geist, the University of Ottawa’s Canada Research Chair in internet law, said, “While this is a far better outcome than the blocked links, this is hardly an example of good government policy. First, the loss of Meta from the system not only dropped the estimated benefits of Bill C-18 by C$50 million, but the lost links and deals means that there are actual losses that run into the tens of millions of dollars. Second, the Google deal is largely what was available over a year ago … suggesting that months of uncertainty, reduced investment, and risks to Canadian news outlets could have been avoided.”
The Canadian Heritage Department highlighted Google’s assurances that “Canadian news businesses will continue to be treated commensurately with their global peers,” according to a statement released on Nov 29.
Finally, Paul Deegan, president and chief executive officer of News Media Canada, which represents the Canadian news industry, was more measured, saying the Online News Act’s ultimate impact “is dependent on the final regulations, which are essential to ensuring our publishers receive fair market value for their news content.”
Alphabet stock (NDAQ:GOOG) is down by 0.44 per cent, trading at US$135.80 per share as of 9:48 am ET. The stock is up by 34 per cent year-over-year and by 148 per cent since 2018.
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