Google, Meta May Have to Pay Over CAD 230 Million in Canada Under Online News Act

Canada on Friday unveiled draft rules for a law designed to compel Alphabet's Google and Meta Platforms pay news outlets, saying Ottawa was addressing the companies' concerns that they may be facing an uncapped liability.

Canada's Online News Act, part of a global trend to make Internet giants pay for news, became law in June and is expected to come into effect in December.

Facebook and Google will need to voluntarily negotiate deals with news publishers in Canada and pay a portion of their global revenues, based on a set calculation, according to the draft regulations.

Both companies have said that the law is unworkable for their businesses, and Meta has already ended news sharing on its platforms in Canada. Google also plans to block news from search results in Canada before the law comes into effect.

The draft proposals, which will go through public consultation, would raise CAD 172 million (nearly Rs. 1,050 crore) per year from Google and about CAD 60 million (nearly Rs. 360 crore) per year from Facebook, a Canadian government official told reporters in a briefing.

If companies do not meet a payments threshold through voluntary deals, they may have to go through mandatory bargaining overseen by the Canadian Radio-television and Telecommunications Commission (CRTC).

The Canadian regulator responsible said last week that it would start setting up a framework for negotiations between news organizations and internet giants this autumn, with the aim of initiating mandatory bargaining by early 2025.

The draft rules allow for both monetary and non-monetary contributions to news businesses and consideration of pre-existing deals.

Agreements that Google and Facebook reach must also cover independent local, Indigenous and official language minority community news businesses, according to the draft regulations.

© Thomson Reuters 2023