Google to block news from search, other products in Canada

Google will also kill existing deals with publishers over the legislation that would force it to share revenues with news publishers

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OTTAWA — Google will pull Canadian news from Google Search and its other products in Canada over legislation that would force it to share revenues with news publishers, the company announced Thursday.

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“We have now informed the Government that when the law takes effect, we unfortunately will have to remove links to Canadian news from our Search, News and Discover products in Canada,” Google said in a blog post.

It will also kill existing deals with publishers. “C-18 will also make it untenable for us to continue offering our Google News Showcase product in Canada,” it said.

The Online News Act received royal assent earlier this month. It would force Meta and Google to reach commercial deals with news publishers to share revenues for news stories that appear on their platforms (Postmedia, publisher of the National Post, is in favour of the legislation).

The Parliamentary Budget Officer has estimated that under the bill, which is aimed at the two companies, Google and Meta could end up funding more than 30 per cent of newsroom costs, just under $330 million a year. But if Google and Meta remove news from their platforms, they will no longer be covered under the Online News Act.

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That means publishers won’t be getting additional funding, and will also lose an undisclosed sum in existing deals. In Canada, Google has signed deals with news publishers that cover 150 outlets through its Google News Showcase program, including with Postmedia. Google pays news outlets to licence content for the program, though the financial terms of the deals with outlets haven’t been disclosed.

While the Liberal government initially said it was in talks with both Google and Meta, a Meta spokesperson said this week the company isn’t negotiating and is sticking with its plans to block news content on its Facebook and Instagram platforms. It has also begun cancelling existing deals with news publishers, including The Canadian Press.

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Google, however, entered into last-minute talks with Heritage Minister Pablo Rodriguez last week. It said Thursday those discussion were unsuccessful.

Canada’s legislation was modelled on Australia’s, where both Meta and Google actually remain exempt from the News Bargaining Code, which has never kicked in because the companies reached revenue-sharing deals with publishers.

Bill C-18 is premised on a similar idea, but platforms will automatically be subject to the code before the exemption process begins. Companies that have commercial deals in place will apply to the CRTC asking to be exempted from mandatory negotiation. If the deals meet the criteria set out by the government (such as whether they provide fair compensation), the CRTC will deem them exempt.

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Google wanted specific assurances from the government about how much it could expect to pay under the bill, and what it would take to ensure they remain exempt — which it didn’t get, the company said.

“In that discussion, we asked for clarity on financial expectations platforms face for simply linking to news, as well as a specific, viable path towards exemption based on our programs to support news and our commercial agreements with publishers,” the blog post said.

But it said the government has “not provided us with sufficient certainty that the regulatory process will be able to resolve structural issues with the legislation (such as forced payment for links and uncapped financial liability).”

Google and Meta haven’t provided specific dates for when they will block news on their platforms, but the bill specifies the legislation must come into force within six months.

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On Thursday, Rodriguez called the two companies “deeply irresponsible and out of touch … especially when they make billions of dollars off of Canadian users.”

He said in an emailed statement following Google’s announcement that Big Tech “would rather spend money to change their platforms to block Canadians from accessing good quality and local news instead of paying their fair share to news organizations.”

“Hundreds of newsrooms have closed because billions in advertising revenue they used to rely on has shifted to Google and Facebook. This status quo is not working. The Online News Act levels the playing field by putting the power of Big Tech in check.”

Publishers’ association News Media Canada expressed hope the two sides could still reach an agreement.

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“Rather than demonstrating their extraordinary market power by withholding access to timely, accurate news for Canadians, this is a time for all stakeholders to act in good faith, as responsible corporate citizens, and engage actively in the regulatory process to ensure that regulation is balanced, predictable and fair,” president and CEO Paul Deegan said in an emailed statement.

“Google has stated that it plans to participate in the regulatory process and it hopes that the Government will be able to outline a viable path forward. We believe there is a viable path forward.”

Kevin Desjardins, president of the Canadian Association of Broadcasters, called for the Competition Bureau to take a look at the situation. The two companies “are demanding caps be placed on any negotiating regime to ensure that they have all the negotiating power against Canadian news organizations,” he said. Just under $250 million of the estimated $330 million in revenues resulting from the bill would go to broadcasters, according to the PBO.

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Desjardins said Meta and Google are unwilling to “cede any of their market dominance in search and advertising in Canada, and to send a message to the U.S. and EU to back off of similar fair negotiating regimes.”

NDP MP Peter Julian said the Liberal government shouldn’t “bow down to threats.”

Meta and Google have “sucked billions of dollars out of Canada in the last few years. That’s led to hundreds of media closures,” he said in an interview. He called for Meta and Google to “act in a responsible way.”

Finance Minister Chrystia Freeland backed Rodriguez’s approach towards Google and Meta at a press conference. “I don’t think anyone should be surprised that it is challenging. We know the power of the U.S. web giants, and we know that there were always going to be tough moments,” she said.

“The way to get a good deal for Canadian journalism and for Canadians is to be firm, clear, polite and at the end of the day, to stand up for the national interest, and that’s what minister Rodriguez is doing.”

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