Google agreed to pay C$100mn per year to a fund that supports news organizations in Canada, as part of an agreement with the Canadian government. This ended a dispute which led Google to threaten to remove links to news on its services.
The C$100mn ($73.6mn), six-month standoff ended with the agreement. This was after the passage of a law on online news that aimed to channel some of the money Google, Meta, and Facebook’s parent company, Instagram, made from online advertising into boosting the finances of media organisations. The dispute escalated into the largest conflict between internet giants, national governments and news subsidy since Australia passed a law in 2021.
Meta had suspended links to Canada news stories earlier this year to protest the law. Google has threatened to do the same when the law comes into effect mid-December, unless the Government tries to soften the impact.
The search giant refused to pay for links to news sites in its services. It feared that this would set a precedent which could be used to charge other online links. The internet giants, rather than harming news companies, have always claimed their links bring valuable traffic to news websites. Google claims its news links are valued at C$250mn per year by Canadian publishers.
The Online News Act of Canada was enacted to bring what it called “fairness” in payment for online content following the massive shift to Google and Meta on the online advertising industry.
Google also claimed that the Canadian law left it open to unlimited financial liability as it would have been forced to negotiate individually with each publisher and face a process of arbitration which it believed would be biased against it.
Pascale St-Onge said in a compromise announcement made on Wednesday that it would “benefit both the news industry and Google’s ability to provide Canadians with reliable news content”. She added that Google’s payments will be made into a collective fund. This eliminates the need to negotiate separately with each publisher.
Canadian officials estimated in early 2014 that the act would force Google to pay C$172mn (C$172 million) to publishers. On Wednesday, it was not clear whether the final regulations of the act would still require Google to pay for links. The company had strongly opposed this.
Meta said that its decision to block links to news in Canada would not be affected by the agreement with Google. Meta said that unlike search engines it does not actively pull news from the web to place in its users’ feeds. It has been clear for a long time that the only reasonable way to comply with the Online News Act was by blocking news in Canada.