Google Agrees to Pay Canadian Media for Using Their Content

Canada’s standoff with the technology giants Google and Meta over their use of domestic news content eased on one front, as the federal government announced Wednesday that it had reached a deal with Google to compensate publishers in Canada.

The agreement comes just weeks before a national law is set to take effect that will require tech companies to pay news outlets for using their content online.

Under the deal, Google will provide $73.5 million, or 100 million Canadian dollars, each year to news organizations, including independent outlets, Indigenous media and multilingual media.

The funds will be distributed based on the number of workers each qualifying news outlet employs, government officials said. (Last quarter, Alphabet reported $76.7 billion in revenue.)

“This is a historic development,” said Pascale St-Onge, Canada’s heritage minister, whose department helps oversee technology regulation. “It will establish a fairer commercial relationship between digital platforms and journalism in Canada,” she said, adding that the new revenue is “good for the news sector.”

“Following extensive discussions, we are pleased that the Government of Canada has committed to addressing our core issues,” said Kent Walker, the president of global affairs for Google and Alphabet, in a statement.

The government’s talks with Meta remain at a standstill.

“Unlike search engines, we do not proactively pull news from the internet to place in 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,” Scott Reid, a spokesman writing on behalf of Meta, said in an emailed statement.

The funds announced Wednesday were significantly lower than previous forecasts shared by the government. In September, it estimated that Google would provide about $126 million, or 172 million Canadian dollars, to news organizations, and last fall, it said in a parliamentary budget report that media companies could expect to see a total 329 million Canadian dollars in new funds from both Google and Meta.

“It’s hard to see it as a big win,” said Michael Geist, an internet and e-commerce law researcher and professor at the University of Ottawa, adding that the contours of the deal are similar to what Google had proposed a year ago and that the government inserted itself at the table “in an effort to salvage its legislation.”

“It’s generating a fraction of what the government had said it would, and it is actually creating some significant costs along the way,” Professor Geist said.

Canada’s national public broadcaster, the CBC, said it was “very pleased” with the agreement and believed it was an encouraging financial development for other news companies, Leon Mar, a spokesman, said in an email.

The online news law, which was modeled after a similar law in Australia, had faced a backlash from tech companies, including Meta, which owns Facebook and Instagram, and in August started blocking news content from the feeds of Canadian users.

Meta has argued that the law was based on a flawed premise that the company benefited unfairly from hosting news platforms and said that it generated enormous readership for media companies.

The law takes effect at a time when the news industry in Canada, as in much of the world, is shrinking under the pressure of lower advertising revenues, and depends on social networks for much of its readership.

In reaching an agreement with Google, Canadian officials said they were following similar negotiations between other governments and the tech firm. Germany recently announced a 3.2 million euro deal with Google involving German news outlets.

“If there is a better deal struck elsewhere in the world, Canada reserves the right to reopen the regulation,” Ms. St-Onge said.

Google had also threatened to block news access in Canada, but it agreed to continue discussions with the government. Prime Minister Justin Trudeau said talks with Meta were at an impasse.

“Unfortunately, Meta continues to completely abdicate any responsibility toward democratic institutions and even stability,” he told reporters in Ottawa on Wednesday.

The dispute underscores the “enormous power” of tech giants on Canada’s media ecosystem, which is yet unresolved given the outstanding issue with Meta, said Blayne Haggart, a political science professor at Brock University in St. Catharine’s, Ontario.

“They were able to credibly threaten the entire Canadian news industry because they were upset with a law that, if we’re honest about it, isn’t that big a deal in terms of the ask,” he said.

Finer points of the deal will be laid out in forthcoming regulations. These details will deal with funding distribution and the government’s request that Google not “unduly discriminate against Canadian news organizations,” Professor Haggart said, referring to how the company populates search results.