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Google agrees to pay news publishers in Canada

While Google did not share any figures, as per reports, the tech giant is expected to shell out annual payments in the range of CAD 100 million to the news companies.

Google on November 29 reached an agreement with the Canadian government that will see the tech company paying Canadian news publishers for featuring their content on various platforms. While Google did not share the exact number, CBC reported that the company estimates to make annual payments to news companies in the range of $100 million (short of the $170 million that the government earlier estimated).

With this agreement, Google has backtracked on its earlier announcement to remove links from Canadian news publishers from its Search, News, and Discover platforms owing to the obligations placed by the government under the Online News Act, which requires Google to negotiate payment with news publishers for featuring their content.

“The Government of Canada has enacted a new law called Bill C-18 (the Online News Act), requiring two companies to pay for simply showing links to news, something that everyone else does for free. The unprecedented decision to put a price on links (a so-called “link tax”) creates uncertainty for our products and exposes us to uncapped financial liability simply for facilitating Canadians’ access to news from Canadian publishers,” Google said back in June.

It now appears that the Canadian government has agreed to some changes in the Online News Act that satisfy Google’s concerns.

“Following extensive discussions, we are pleased that the Government of Canada has committed to addressing our core issues with Bill C-18, which included the need for a streamlined path to an exemption at a clear commitment threshold. While we work with the government through the exemption process based on the regulations that will be published shortly, we will continue sending valuable traffic to Canadian publishers,” Kent Walker, President of Global Affairs at Google, said in a statement.

While we don’t know the exact nature of the changes, CBC reported that the final version of the Online News Act would let Google negotiate with a single group that represents news organisations, limiting its need to work with individual outlets and the arbitration risk associated with it.

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The final rules are expected to be unveiled by mid-December.

Why does this matter: Canada isn’t alone in wanting to make Google pay news publishers. Countries like the US and India are also contemplating the same. But one worry was that Google could avoid paying up by deciding not to show news links to users, which would be detrimental to news publishers and users, a threat that Google and Meta have wielded to their advantage multiple times. This latest agreement signals that Google can ultimately be made to pay, which is a positive sign for regulators and news publishers in other countries that are looking to do the same. But we will have to wait for the final version of C-18 to understand the extent of compromises made by the Canadian government to arrive at this agreement.

Why do publishers want Google to pay: Google takes news snippets from publishers and displays them on its News tab or on the Search screen, thus, limiting the number of users who actually visit the website of the news publishers. This, in turn, deprives the news publishers of ad revenue, which for many publishers is the primary source of revenue.

What about Meta: Meta in August decided to stop featuring news on Facebook and Instagram in Canada from both Canadian publishers and international publishers. Canadian Prime Minister Justin Trudeau had sharply criticised the company for this move because it hampered efforts during the wildfires that raged the country in August: “Right now, in an emergency situation where up-to-date local information is more important than ever, Facebook is putting corporate profits ahead of people’s safety,” Trudeau remarked. It’s not clear if Meta is now open to working with the Canadian government to reverse its decision like Google.

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Other countries that have passed similar laws or are considering: Australia, France, and Spain have mandated that tech companies pay news publishers for their content, and other countries like New Zealand, the US, and India. There are also antitrust lawsuits or investigations on this front in some countries, notably in the UK, the EU, and India.

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