Categories: Technology
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2023-11-30 11:46 AM

Google’s $100M Payout: Breaking Down the Deal with Canada on Online News Act (Bill C-18)

  • Agreement Reached: Google and the Canadian government successfully negotiated an agreement on the contentious Online News Act (Bill C-18).
  • Key Terms: The exact terms are undisclosed, but the government addressed Google's concerns about "uncapped financial liability" for linking.
  • Impact and Resolution: Google will not exclude links to Canadian news outlets, continuing to support publishers while navigating the new regulations.
By Lethabo Ntsoane

In a recent development, Google and the Canadian government have successfully negotiated an agreement regarding the contentious Online News Act, also known as Bill C-18. This legislation aimed to make major web platforms, including Google and Meta, pay news outlets for the use of their content.

Background of the Online News Act

Bill C-18, passed earlier this year and set to go into effect in December, targeted large tech companies with the intention of transferring funds from these platforms to news organizations. Google and Meta, being primary targets, opposed the rule, which Google dubbed a “link tax.” Meta took a stricter stance by removing news from Facebook and Instagram in Canada, while Google attempted last-ditch negotiations.

Google’s Initial Concerns

Google’s primary concerns revolved around potential “uncapped financial liability” for linking to articles, prompting the company to consider excluding links to Canadian news outlets from Google Search, News, and Discover. The company sought to negotiate terms that would protect its interests while complying with the new legislation.

Agreement Details

Google and Alphabet president of global affairs, Kent Walker, announced the agreement in a recent statement. According to Walker, the Government of Canada has committed to addressing Google’s core issues with Bill C-18. While the exact terms are yet to be disclosed, Walker stated that the government has successfully addressed concerns related to financial liability.

As part of the agreement, Google will not pull links to Canadian news outlets. Instead, the company will continue sending valuable traffic to these publishers while working with the government through an exemption process based on forthcoming regulations.

Streamlined Exemption Process

A notable aspect of the agreement is the establishment of a streamlined exemption process for companies that meet a certain financial commitment threshold. Rumored to involve an annual payout of approximately $100 million to local news companies, this threshold is notably less than the initial $172 million sought by federal officials.

The final regulatory language of Bill C-18 is expected to permit Google to negotiate with a single group representing media organizations. This approach aims to reduce the administrative burden on Google, allowing negotiations with a unified entity rather than numerous individual outlets.

Positive Response from Prime Minister Justin Trudeau

Prime Minister Justin Trudeau expressed satisfaction with the resolution, emphasizing Google’s commitment to supporting journalists, including those in local journalism. “After months of holding strong, of demonstrating our commitment to local journalism, to strong independent journalists getting paid for their work… Google has agreed to properly support journalists,” Trudeau stated.

Comparison with Australian News Outlet Agreements

This isn’t the first time Google has navigated such negotiations. In 2021, both Google and Meta cut deals with Australian news outlets in response to a similar law in Australia. The agreements were reached to address the concerns raised by the Australian government regarding compensation for news content.

Meta’s Stricter Stance

While Google reached an agreement with the Canadian government, Meta, the parent company of Facebook and Instagram, maintained a stricter stance. Lisa Laventure, a Meta spokesperson, reiterated the company’s position, stating, “Unlike search engines, we do not proactively pull news from the internet to place in our users’ feeds.”

Conclusion

The resolution of the negotiations between Google and the Canadian government marks a significant development in the ongoing global debate over compensating news outlets for content shared on major tech platforms. As regulations like Bill C-18 come into effect, these agreements provide insights into the complex dynamics between governments and tech giants, balancing the interests of news organizations, tech platforms, and the broader public.

In the coming weeks, as the final regulatory language of Bill C-18 is published, more details about the agreement between Google and the Canadian government will likely emerge. This resolution underscores the importance of dialogue and negotiation in addressing the challenges posed by rapidly evolving digital landscapes and the role of major tech companies in shaping the future of online content distribution.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted: Email: lethabo@rateweb.co.za Twitter: @NtsoaneLethabo