On Thursday, the Canadian Parliament passed legislation that mandates tech giants such as Google and Meta to pay Canadian media organizations for article links.
The Canadian government stated that the Online News Act aims to address the dramatic decline in advertising revenue for Canadian news publishers over the past two decades. This will compel internet behemoths like Google and Meta's Facebook to pay for news content.
The Online News Act necessitates that these two companies sign agreements with Canadian news publishers. If news content appears on their websites and benefits these tech giants financially, they will be required to pay.
Pablo Rodriguez, the Minister of Canadian Heritage, pledged to retaliate if Google and Meta block Canadian news and will subsequently hold talks with these companies.
Canadian Prime Minister Justin Trudeau indicated that these internet giants would rather cut off Canadians' access to local news than pay their fair share. This is a real problem and they are now resorting to bullying tactics to achieve their goals. The government won't back down, he assured, implying that such strategies won't work.
The passage of this bill marks the second time in about three months that the Canadian Parliament has approved new measures to regulate digital activities, causing unease among large tech companies. They worry other countries might follow Canada's lead. Once the Online News Act receives royal assent, it will take effect within six months.
Canada passed legislation in April requiring streaming platforms such as Netflix and YouTube to provide more local content to Canadian users.
Canada's traditional media and broadcasting companies praised the bill, believing it will "improve the fairness of the digital news market" and help bring more funds to shrinking news companies.
News Media Canada, a lobbying group representing newspaper and digital publishers, said the law paves the way for "commercial negotiations" between media and digital platforms and "has final offer arbitration as a backup support."
Tech Company Responses:
On Thursday, Meta warned that this move by the Canadian government would force it to block Canadian users from accessing news content on its Facebook and Instagram platforms, similar to the company's actions in Australia two years ago. Google also stated it may limit the provision of news content in its Canadian search function due to the bill.
In 2021, Australia passed a law forcing tech companies to pay publishers for news content. Facebook temporarily blocked news content on its platform in Australia but later reached a settlement with Australian publishers.
Meta did not provide a timeline for action but said it would block news content for Canadian users before the Online News Act takes effect. Meta had previously conducted a test, briefly blocking news access for up to 5% of Canadian users, while Google conducted similar tests earlier this year.
In May, Nick Clegg, Meta's president of global affairs, explained that "publishers choose to share their content because it benefits them, and it doesn't bring any special value to us."
Clegg also stated that Canada's legislation goes further than Australia's, as it puts a price on free webpage links, contravenes global copyright norms, and threatens the free flow of information online.
Google proposed amending the bill to base payments on news content rather than links, and clearly stipulate that only companies that produce news and comply with news standards are eligible for payment.
A Google spokesperson said the proposed law is unworkable and might push the company to reduce the provision of news links to Canadian users. "We are doing everything we can to avoid an outcome that no one wants to see. So far, our concerns have not been addressed. We continue to urgently seek cooperation with the government to find a way forward," they said.
