Google has agreed to pay Canadian news businesses $100 million a year to comply with the country's Online News Act, despite previously saying it would remove Canadian news links from search rather than make the required payments.
Google and government officials agreed to a deal that lets Google negotiate with a single news collective and reduce its overall financial obligation. Facebook owner Meta is meanwhile holding firm in its opposition to payments.
"Google will contribute $100 million in financial support annually, indexed to inflation, for a wide range of news businesses across the country, including independent news businesses and those from Indigenous and official-language minority communities," Minister of Canadian Heritage Pascale St-Onge said in a statement today.
The $100 million in Canadian currency is worth about $74 million in US currency. Before today's deal, the federal government estimated that Google would have to pay $172 million a year.
"After extensive discussions, the Canadian Government agreed to a number of changes to address our deeply held concerns that C-18 would require payment for links and create uncapped financial liability through an unworkable bargaining process, simply for helping Canadians find relevant and useful information," Google said in a statement provided to Ars.
The C-18 law contains a "duty to bargain" requiring large search engines and social media services to negotiate payments with news businesses or groups of news businesses. In June, six months before the law's implementation, Google said it would not pay the "link tax" and instead would remove links to Canadian news sources from Google Search and Google News for users who access the services in Canada.
Payments based on number of journalists
Today, Google thanked St-Onge "for acknowledging our concerns and deeply engaging in a series of productive meetings about how they might be addressed." The resulting deal provides "a streamlined path to an exemption at a clear commitment threshold," Google said.
"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," Google said.
The Canadian government confirmed that Google will be allowed to negotiate with a single collective, instead of separately with multiple news organizations or groups of news organizations. "Google will have the option to work with a single collective to distribute its contribution to all interested eligible news businesses based on the number of full-time equivalent journalists engaged by those businesses," St-Onge said.
New rules to effect the change will be implemented before the Online News Act is enforced. St-Onge's announcement said the Canadian Heritage agency "will share more details about the final regulations following approval by the Treasury Board of Canada and prior to the Act coming into effect on December 19, 2023."
Google said that "under the revised regulations, there is a path for publishers to continue to receive valuable traffic... which Google can allocate through a deal with a single collective of its choosing. Importantly, this will allow Google to bypass the requirement to settle with publishers directly or individually, and any corresponding mandatory bargaining obligations."
No Canadian news on Facebook
Meta, the other company affected by the Online News Act, "ended its talks with the government last summer and stopped distributing Canadian news on Facebook and Instagram," the CBC noted today.
Meta hasn't changed its stance. "Unlike search engines, we do not proactively pull news from the Internet to place in our users' feeds and we have long been clear that the only way we can reasonably comply with the Online News Act is by ending news availability for people in Canada," Meta told the CBC.
Canadian officials previously estimated that Facebook would have to pay $62 million a year, but the deal with Google suggests that Meta could lower that amount significantly. Meta reportedly hasn't resumed talks with the government.
"This [deal with Google] shows that this legislation works," St-Onge said, according to the CBC. "Now it's on Facebook to explain why they're leaving their platform to disinformation and misinformation instead of sustaining our news system."
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