Google to pay Canadian news media $98m a year in ‘historic’ deal with Ottawa

Ottawa - The Canadian government and Google announced on Nov 29 a “historic” deal in which the digital giant will make annual payments to Canadian news companies in the range of C$100 million (S$98 million) and, in return, continue to share their news content on its platforms.

The deal heads off an imminent threat by Google to block Canadian news in response to Ottawa’s Online News Act, which is due to come into force on Dec 19.

The Act seeks to make large Internet companies share advertising revenue with news publishers in the country and aims to support a struggling Canadian news sector that has seen a flight of advertising dollars.

“For more than a decade, news organisations have been disrupted by the arrival of large digital platforms like Google. In Canada, nearly 500 media outlets have closed their doors and thousands of journalists have lost their jobs,” Heritage Minister Pascale St-Onge told a news conference.

“This is a historic development. It will establish a fairer commercial relationship between digital platforms and journalism in Canada,” she said.

Meta has also pushed back against the looming regulations.

Meta and Google, which together control about 80 per cent of all advertising revenue in Canada worth billions of dollars, have been accused of draining cash away from traditional news organisations while using news content for free.

Ottawa had estimated the Online News Act could cost the two companies a combined C$230 million by requiring them to make commercial deals with Canadian news outlets, or face binding arbitration.

“Today, I’m announcing that we have found a path forward with Google” to implement the Online News Act, she said.

The annual payment amount is less than what the government had estimated the compensation should be, but heads off a potential online blackout of news in Canada, where Google and Meta are the dominating platforms.

Ms St-Onge, however, said she reserved the right to revisit the deal if “better agreements are struck elsewhere in the world”.

Prime Minister Justin Trudeau said this agreement “is going to resonate around the world in countries and democracies struggling with the same challenges that our media landscape in Canada is facing”.

Much-needed cash injection

The agreement will give Google the option to negotiate with a single group representing all Canadian media, rather than seeking to secure one-on-one deals that it feared may open it up to massive payouts.

The money would then be divided up based on the number of full-time journalists employed by each publisher and broadcaster.

Google global affairs president Kent Walker said the company was pleased that the Canadian government has committed to addressing Google’s core issues with the Online News Act, also known as Bill C-18.

As a result, he said Google “will continue sending valuable traffic to Canadian publishers”.

“This is a good outcome, for sure,” Mr Brent Jolly, president of the Canadian Association of Journalists, told AFP.

Ms Marla Boltman, head of the citizen group Friends, also welcomed the “much-needed cash injection into the Canadian media sector”.

However, she added that the Online News Act “will not be a panacea for protecting Canadian journalism” and that “other tools to provide support for news must be put in place”.

According to the draft regulations unveiled in September, the Act would apply to companies with global annual revenues in excess of C$1 billion, operating a search engine or social media platform actively used by at least 20 million users and that distributes news. That effectively means only Google and Meta would be affected.

Meta has called the Bill “fundamentally flawed” and, since August, has blocked access in Canada to news articles on its Facebook and Instagram platforms. AFP