Tech Giants Face Potential Costs as Canada Implements New Online News Law
– The Canadian government has outlined how a new law requiring digital giants to pay publishers for news content will be enforced, potentially costing Meta and Google a combined Can$230 million.
– The law aims to support the struggling Canadian news sector, which has experienced a decline in advertising revenue and the closure of numerous publications. It specifically targets Google and Meta, which control about 80% of online advertising revenues in Canada.
The Canadian government has published draft regulations that detail how a new law requiring digital giants to pay publishers for news content will be implemented. The law is aimed at supporting the struggling Canadian news sector, which has suffered from a loss of advertising revenue and the closure of hundreds of publications over the past decade. The law primarily targets Google and Meta, which together control approximately 80% of all online advertising revenues in Canada.
Under the proposed regulations, companies with global annual revenues exceeding Can$1 billion, operating search engines or social media platforms actively used by at least 20 million Canadians, and distributing news will be subject to the law. The government estimates that enforcing fair commercial deals between these companies and Canadian outlets for shared news and information could cost Google and Meta a combined Can$230 million.
Meta (formerly Facebook) has criticized the bill as “fundamentally flawed” and has vowed to continue blocking access to news articles on its Facebook and Instagram platforms in Canada. This action was initiated on August 1. Google has also voiced opposition to the Online News Act but stated that it will carefully study the proposed regulations to assess whether they address its major structural challenges.
Heritage Minister Pascale St-Onge emphasized the reliance of Canadians on digital platforms for news and information. She stated that these tech platforms have a responsibility to support news sharing, benefiting both themselves and Canadians. The minister asserted that tech giants should contribute their fair share, but nothing more.
Overall, the new law aims to ensure that digital giants like Google and Meta contribute financially to the Canadian news sector, which has been struggling due to declining advertising revenues. The implementation of this law could have significant financial implications for these tech companies.