Canada on Friday spelled out how a new law requiring digital giants to pay publishers for news content will work in practice, including how much the bill could cost Meta and Google. A draft regulation says companies with global revenues of more than $1 billion that operate search engines or social media platforms used by at least 20 million Canadians will have to negotiate voluntary agreements with local news outlets and make payments based on a set calculation.
The law aims to support a struggling Canadian news sector that has seen a flight of advertising dollars and hundreds of publications closed in the last decade. It also wants to ensure that tech firms don’t abuse their dominant positions, undermining traditional publishers and putting people out of jobs.
Effectively, it targets only Google and Meta — which control about 80 percent of all online advertising revenues in Canada. The government estimates the bill will cost those two companies about $170 million. The government expects the companies to establish dozens of new partnerships with local news organizations and meet other requirements, such as making information about how ads are placed on their sites available to news publishers.
Meta and Google aren’t happy about the law, with the latter saying it would instead restrict news availability for users in Canada rather than comply with what it calls “fundamentally flawed” legislation. The company says the new rules won’t affect its plans to block news in the country, and it will study them closely to see if they address its concerns. According to a Wall Street Journal report, Google’s parent company, Alphabet, has been shedding staff and reorganizing departments, though executives aren’t using the term layoffs.
But Heritage Minister Pablo Rodriguez says the regulations will help nudge the company back toward compliance. He says he hopes to talk to Alphabet’s Google and Facebook-parent Meta about reaching an agreement.
One option is to use a clause in the new law that requires the companies to enter binding arbitration with a panel of experts from the Canadian Radio-television and Telecommunications Commission. But a targeted measure against an American company like Meta could run into free-speech concerns and end up in court, where it likely wouldn’t fare well.
A more realistic approach might be for the government to pull back some of the advertising funds it has offered to social media. This action could hit Meta in the wallet but not derail its nearly $714 billion business. But that approach would raise concerns about freedom of speech, and it probably won’t fly in North America’s Supreme Court, where Meta is arguing the law is unconstitutional. And even that isn’t likely to do any good, as it wouldn’t change the underlying problem the law is trying to solve. The big issue is that a handful of prominent media players get most of the benefits while smaller ones struggle.
