Canada News Law Could Cost Google and Meta 4% of Revenues
Under the new law, Meta and Google will have to pay $45 million and $127 million every year, respectively.
- The Canadian government released draft rules for a law that would force tech leaders to pay news outlets in the country.
- Google and Meta have resisted the changes with concerns that the law would result in costs to their platforms without a fixed limit.
The government of Canada released details about a new law, the Online News Act, that will force tech giants to pay news providers to display content on their platforms. The new law is primarily expected to impact Google and Meta.
Meta, in particular, has been strongly opposed to the change and has blocked users in the country from seeing news on its platform. The block was strongly criticized by Prime Minister Trudeau, considering the national wildfire crisis.
The draft regulations presented by the government state that both Meta and Alphabet would have to pay at least 4% of their annual revenues to Canadian news outlets in exchange for displaying links to the news articles. According to the new regulations, tech companies would have to negotiate with news publishers for this voluntarily. The law will cost Meta and Google annually $45 million and $127 million, respectively.
Ever since the law came close to becoming reality, Meta blocked Canadian users from news stories on Facebook. Meta has reaffirmed that its stance would not change after the draft regulations were made public. Similarly, Alphabet has threatened to cut off access to Google News in Canada.
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Canadian officials have stated that they will engage with the tech companies to discuss the issue in the near future. Since the laws apply only to companies with revenues higher than $1 billion, only tech leaders like Meta and Google will be subject to it. Failure to comply would result in binding arbitration proceedings, which would be supervised by the Canadian Radio-television and Telecommunications Commission (CRTC).
The legislation has come about after several complaints by the media industry in Canada, calling for tighter regulation of tech companies that were allegedly pushing news businesses out of the online advertising market.
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