Canada Introduces Draft Rules for News Payment Law, Provoking Response from Google and Meta Platforms

Canada has released a set of draft rules for its Online News Act, a law aimed at compelling tech giants like Google and Meta Platforms (formerly Facebook) to pay news outlets. The law, which was passed in June and is scheduled to take effect in December, follows a global trend of holding Internet giants accountable for compensating the news industry. However, both Google and Meta have raised concerns over the potential unlimited liability they may face under this legislation. The draft regulations require the companies to engage in voluntary negotiations with news publishers, paying a portion of their global revenues based on a calculated amount. This article critically examines the implications of the proposed law and the reactions from the tech giants.

Google and Meta, already known for their contentious relationship with news outlets and publishers, have voiced their apprehensions regarding Canada’s Online News Act. Both companies argue that the law is unworkable for their business models. Meta, in fact, has already ceased news sharing on its Canadian platforms. Google, on the other hand, plans to exclude news from search results in Canada before the law comes into effect. This drastic action indicates the perceived challenges companies like Google and Meta face when confronted with legislated obligations to financially compensate news publishers.

According to the draft regulations, Google is expected to contribute approximately CAD 172 million (nearly Rs. 1,050 crore) annually, while Facebook’s obligation would amount to roughly CAD 60 million (nearly Rs. 360 crore) per year. These figures were shared by a Canadian government official during a briefing with reporters. However, these financial commitments rely on voluntary negotiations between the tech giants and news publishers. Should the companies fail to meet the specified payment threshold through voluntary agreements, they may be subjected to mandatory bargaining overseen by the Canadian Radio-television and Telecommunications Commission (CRTC).

The CRTC, the regulatory body responsible for enforcing the Online News Act, has announced its intention to establish a negotiation framework between news organizations and Internet giants by early 2025. The proposed framework will facilitate discussions on financial compensations, aiming to ensure a fair distribution of resources between the news industry and tech behemoths. The introduction of mandatory bargaining demonstrates the Canadian government’s determination to level the playing field and rectify what it perceives as an imbalance of power.

The draft regulations allow for a mix of monetary and non-monetary contributions to news businesses, taking into account any existing agreements. Additionally, agreements reached by Google and Meta must encompass independent local, Indigenous, and official language minority community news businesses. The aim is to ensure that smaller, marginalized, and community-specific news publishers are included in the compensation scheme, rather than being left behind due to their limited bargaining power.

Canada’s draft rules for the Online News Act have generated significant controversy and critique from major tech companies. The proposed regulations place financial obligations on Google and Meta Platforms to pay news publishers based on their global revenues. While concerns have been raised about the viability and impact of the legislation on the business models of these tech giants, the Canadian government remains committed to ensuring a fair financial landscape that supports the sustainability of the news industry. The upcoming public consultation period will undoubtedly shed further light on the various perspectives and challenges associated with this critical piece of legislation that seeks to reshape the dynamics between the news sector and tech giants.

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