Canada has taken a significant step toward ensuring that tech giants Alphabet Inc’s Google and Facebook’s Meta Platforms contribute their fair share to the news industry. Draft regulations have been proposed under the Canadian Online News Act, which was passed in June and is set to take effect in December. The move aims to address concerns raised by Google and Facebook about potential never-ending payment liabilities should the legislation be enforced.
Under the proposed regulations, Google and Facebook will be given the opportunity to engage in voluntary negotiations with news publishers to establish payment agreements. These agreements will be based on a formula that requires the tech giants to allocate a portion of their global revenue for compensating news outlets. According to a Canadian government official, Google is expected to contribute approximately C$172 million annually, while Facebook is projected to contribute around C$60 million.
In the event that Google and Facebook fail to meet the specified payment threshold, they will be subject to mandatory negotiations facilitated by the Canadian Radio-television and Telecommunications Commission (CRTC). The framework for these negotiations is anticipated to be operational by the beginning of 2025.
Crucially, any agreements between Google, Facebook, and news outlets must encompass a wide range of news providers, including independent local outlets, Indigenous media, and official language minority community news businesses. Compensation for these agreements can take various forms, both monetary and non-monetary, with existing deals possibly factored into the equation.
Before these regulations become official, they will undergo a public consultation process, affording Google and Facebook an opportunity to voice their concerns, propose alterations to the law, or seek to avoid additional payments. This open dialogue ensures that the interests of all parties involved are considered.
This development in Canada mirrors a growing global trend where countries are seeking to compel tech giants to contribute financially to the news industry. Regardless of the final outcome of these proposed regulations, it is evident that Google and Facebook will face increasing pressure to financially support news outlets in various forms.
At a conversion rate of $1 = 1.3583 Canadian dollars, the potential contributions from these tech giants could significantly bolster the Canadian news ecosystem, which has faced challenges in recent years due to changing media consumption patterns and revenue dynamics.
In summary, Canada’s proposal to draft regulations under the Canadian Online News Act marks a significant effort to hold tech giants Google and Facebook accountable for their impact on the news industry. While both companies have expressed concerns about the potential financial implications, the proposed rules aim to strike a balance by allowing for voluntary negotiations while establishing a framework for mandatory discussions if necessary. The ultimate goal is to ensure a fair and sustainable partnership between tech giants and news outlets, with the public consultation process providing a platform for all stakeholders to shape the final regulations. This development reflects a broader global trend in which countries are reevaluating the role of tech giants in supporting the news industry.
Source: Reuters
