Google settles with feds on Bill C-18

The Google Canada and federal government standoff over Bill C-18, the Online News Act, is over.

Links to Canadian media publications will continue to have domain on the world’s most popular search engine after the two sides came to an agreement Nov. 29, 20 days before the tech giant intended to follow Meta’s footsteps and ban news content on its search engine. 

Google has agreed to pay $100 million annually — indexed to inflation — to the country’s news publishers to comply with this new law, which is a sizable reduction from the $172 million annual windfall projected by the Parliamentary Budget Officer (PBO) in June.  

In a statement, Kent Walker, president of global affairs at Google and Alphabet, stated he was “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.”

Google secured the cost certainty it desired. In October, the company warned that “by legislating payment for links to news sites, and not defining what that price might be, the act subjects Google to potentially unlimited financial liability for merely facilitating access to news sites and providing publishers with valuable referral traffic.”

This agreement provided a satisfying solution to the “critical structural issues” Google had with Bill C-18. The original model would have compelled the company to negotiate content-sharing deals with individual Canadian journalism organizations, which Google feared would expose it to more arbitration risk. Now, the company will deal with one entity representing all of Canadian news. 

The finer details of this agreement will become known when the final regulations of Bill C-18 are unveiled in mid-December.

Prime Minister Justin Trudeau touted the deal as “very good news.”

"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, including local journalism," he said to media on Wednesday.

Pablo Rodriguez, now the Minister of Transport, was the architect of Bill C-18 during his second stint as Minister of Canadian Heritage. Pascale St-Onge took over the role following the cabinet shuffle and was credited by Walker for “acknowledging our concerns and deeply engaging in a series of productive meetings about how they might be addressed.”

St. Onge told reporters during a news conference that this deal could be reopened if other countries author similar legislation that is even more accommodating to the tech giant. 

She was asked if negotiations could be reopened with Meta, which has blocked Canadian news on Facebook and Instagram since August, now that a deal with Google is consummated. 

"This (deal with Google) shows that this legislation works," said St. Onge. "Now it's on Facebook to explain why they're leaving their platform to disinformation and misinformation instead of sustaining our news system."

Meta would have been subject to $62 million payments per year, according to PBO calculations.

A Meta spokesperson told the CBC via email that there will be no news present on its Canadian platforms while Bill C-18 is the law of the land.

“Unlike search engines, we do not proactively pull news from the Internet to place on our users' feeds and we have long been clear that the only way we can reasonably comply with the Online News Act is by ending news availability for people in Canada,” stated the spokesperson.

Michael Geist, the Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa, analyzed the deal in a blog post on his website. The academic said this agreement shows “the government misread the market, passed deeply flawed legislation and was ultimately forced to row back core elements of the law and accept payments consistent with what was on the table over a year ago.”

Geist added that it is important to note “the majority of the $100 million will likely be going toward broadcasters such as Bell, Rogers and the CBC.” Last year the PBO suggested the aforementioned largest players will receive 75 per cent of the cut, while all print and digital mediums have a combined 25 per cent stake. 

The recently announced $129 million boost to the Canadian Labour Journalism Tax Credit, solely designated for print and online outlets, could be interpreted, said Geist, as the government admitting “that it needed to find additional funding to make up for what is far more legislative fail than negotiating brilliance.”