Canada Imposes Multimillion-Dollar Liabilities on Google, Facebook for News Content Use

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The Canadian government has calculated the financial liabilities of tech behemoths Google and Facebook under legislation requiring them to recompense media organizations for their Canadian news content. Government representatives predict Google and Facebook would respectively have to offer $172 million and $62 million annually to meet legislated parameters, established for potential exemptions under the Online News Act.

Passed this summer, the act makes bound tech companies to negotiate agreements with media businesses whose content they share or exploit. The recently proposed regulations provide a scheme to level the playing field between media and Big Tech and stipulate its application to specific firms. The legislation is aimed at those who reap significant benefits from the Canadian market, according to Heritage Minister Pascale St-Onge.

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Entities subjected to the legislation will need to have global revenue reaching or exceeding $1 billion within a calendar year, functioning in the Canadian news distribution market via search engines or social media, with an average of 20 million or more monthly users or visitors from Canada. For now, only Google and Facebook’s parent company meet these requirements while Microsoft’s Bing is nearing this threshold.

The draft regulations propose that businesses achieving set criteria might receive an exemption if they already contribute a pre-determined amount to Canadian journalism. This amount is calculated against the global revenues of the tech business and Canada’s share of the global GDP, with the government hoping its formula will amount to within 20% earnings of full-time journalists at Canadian news organizations.

Companies could meet this criteria through both financial and non-financial means. The draft, however, remains unclear on non-financial contributions, suggesting only that aspects like training and advertising might suffice.

While the draft regulations are open to a further 30-day consultation, Facebook and Instagram’s parent company – Meta – which recently blocked news on its platforms has expressed disappointment with the proposal.

Meta Canada’s head of public policy, Rachel Curran, deemed the draft’s premise “fundamentally flawed,” adding that Meta was not benefiting unfairly from news content and today’s proposed regulations will not affect their decision to discontinue news availability in Canada. Likewise, Google is also pondering the removal of Canadian news from its platforms.

Despite lobbying attempts by both companies against the legislation, Pascale St-Onge insists the legislation provides a predictable and reasonable path forward for both newsrooms and media platforms. She is confident that they have delivered a solution that should satisfy all parties involved.

The government remains steadfast in implementing this legislation driven by Google and Meta’s combined 80% share of Canada’s $14 billion online ad revenues in 2022. It also addresses issues facing news outlets who have suffered revenue loss leading to layoffs, waning media coverage in smaller communities, and the shutdown of 474 Canadian news businesses between 2008 and 2023.

Simultaneously, with 69% of Canadians accessing news online but only 11% paying for it, the government has withdrawn $10 million in annual advertising spend from Meta’s platform following its news ban. Other news and telecommunications businesses have also followed suit. This has led various industry stakeholders to commend the government’s approach to the issue, emphasizing that it brings “clarity and predictability.” They hope that it is a solution all stakeholders should be able to live with in good faith.