The law, known as the Online News Act, is one part of a broad and contentious effort by the Canadian government to regulate the digital sphere and circumscribe the power of tech giants. Another law passed this year compelling streaming platforms such as Netflix to promote Canadian content to users in Canada also drew criticism.
It is also one of several similar proposals under consideration around the world that aim to sustain floundering news industries by requiring social media firms to negotiate compensation with media organizations for the content that is shared on their platforms.
Media organizations have long argued that Silicon Valley giants should share more of their revenue with them because the advertising dollars that had long sustained their businesses were decimated by the rise of the internet and firms such as Facebook and Google.
Canada modeled its law after an Australian one that passed in 2021. California is considering a similar proposal. Meta’s response is also familiar. It had previously threatened to block news if California’s bill passes and briefly blocked news in Australia after its law was passed, drawing a backlash. Facebook relented less than a week later, after the government tweaked the law to grant the platform more time to negotiate with publishers.
Both Facebook and Google now strike deals with Australian news outlets to use their content on their platforms.
Trudeau has defended Canada’s legislation and accused the tech giants of employing “bullying tactics.”
“The fact that these internet giants would rather cut off Canadians’ access to local news than pay their fair share is a real problem,” Trudeau said this month. “It’s not going to work.”
Canada’s law will force tech companies to negotiate compensation deals with news organizations for posting or linking to their work. If those negotiations fail, the two sides must enter binding arbitration to decide the appropriate compensation.
“Over 460 media — big and small, in regions and cities or whatever — have disappeared in the last 10 to 15 years,” Pablo Rodriguez, Canada’s heritage minister, told a parliamentary committee in May. “All of the money is migrating to those big players, and we’re trying to come back to a fairer system.”
News Media Canada, a lobbying group, cheered the passage of the bill.
“This is an important first step to level the playing field and address the significant market power imbalance between publishers and platforms, and to restore fairness and ensure the sustainability of the Canadian news media ecosystem,” Jamie Irving, the group’s chair, said in a statement.
Jason Kint, chief executive of Digital Content Next, a trade group for online news organizations, said Canada’s law expands the territory where big tech platforms are forced to pay for news and could lead to similar laws passing in larger markets, including Brazil, Britain and the United States.
“Canada brings this smart legislation much closer to home,” Kint said. “Dominoes are falling as global parliaments recognize the significant imbalance in market power held by Google and Facebook — and learn from solutions to address it.”
Richard Gingras, vice president of Google’s news division, told a Canadian Senate committee in May that it would be “reasonable” for the company to ban news links if the bill passed. Another Google executive wrote in a March blog post that the firm was “exploring potential impacts” of the bill becoming law and was testing showing different amounts of news in search results.
Google has had several meetings with Canadian officials and insists that it provides a huge value to publishers by sending traffic to their sites. In his testimony, Gingras called the law an “unlimited subsidy for Canadian media.”
Jenn Crider, a spokeswoman for Google, said Thursday that the firm is “doing everything we can to avoid an outcome that no one wants.” She called the law “unworkable.”
“Every step of the way, we’re proposed thoughtful and pragmatic solutions that would have improved the bill and cleared the path for us to increase our already significant investments in the Canadian news ecosystem,” Crider said. “So far, none of our concerns have been addressed.”
Meta, which owns Facebook, Instagram and WhatsApp, has faced several months of turbulence. It has slashed more than 20,000 jobs since November and is facing greater competition in the social media sector for advertising dollars and users.
When the company briefly blocked news from its platforms in Australia, it also took down pages belonging to Australian hospitals and emergency services. The firm blamed a technical error, but the Wall Street Journal reported that whistleblowers claimed it was a negotiating tactic.
Rachel Curran, Meta’s head of public policy in Canada, told a parliamentary committee last month that the “way Australia unfolded was not ideal.”
“There were some technical errors made in the way that we removed news from our platform,” she said. “We fully intend that those errors will not be made in the Canadian context, and we’re preparing very carefully to ensure that this is the case.”
