Search giant responds to Liberal government's Online News Act, which became law last week
Google said Thursday it will remove Canadian news content from its search, news and discover products after a new law meant to compensate media outlets comes into force.
The move to pull news from the world's most popular search engine could have a devastating impact on Canadian media outlets, which often depend on third parties like Google to get content into the hands of readers.
The decision comes after the government's contentious C-18 legislation passed Parliament last week. The bill has been criticized by tech giants like Meta and Google who say it's unfair to impose what amounts to a tax on links.
Some smaller media outlets and experts have blasted the regime because they claim the bulk of the financial benefits will accrue to a handful of a large media players.
"We're disappointed it has come to this. We don't take this decision or its impacts lightly and believe it's important to be transparent with Canadian publishers and our users as early as possible," said Kent Walker, the president of global affairs at Google and Alphabet.
"The unprecedented decision to put a price on links (a so-called 'link tax') creates uncertainty for our products and exposes us to uncapped financial liability simply for facilitating Canadians' access to news from Canadian publishers."
The government and larger media outlets, including the newspaper lobby group and broadcasters like the CBC and CTV, have said social media companies should compensate news outlets for the use of their content.
Heritage Minister Pablo Rodriguez suggested Thursday he has no intention of backing down from this fight with the American web giants that control so much of what Canadians read and watch.
"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," Rodriguez said in a statement.
"This shows how deeply irresponsible and out of touch they are, especially when they make billions of dollars off of Canadian users. Canada needs to have a strong, free and independent press. It's fundamental to our democracy."
Rodriguez added in an interview with CBC News that he was surprised by Google's statement because the government's talks with the company are ongoing.
"We're still having conversations with Google as recent at this morning," he said. "Google knows very well that the clarity they need is coming soon through regulation."
Just yesterday, Prime Minister Justin Trudeau said the government was confident Google would come around on the legislation.
"I will say the conversations with Google are ongoing. It is important that we find a way to ensure that Canadians can continue to access content in all sorts of ways but also that we protect rigorous independent journalism that has a foundational role in our democracies," he said.
"We know that democracies only work with a strong independent diverse media and we will continue to work for that."
WATCH: Trudeau says he's 'disappointed' by Meta's reaction to online news law
Trudeau says he's 'disappointed' with Meta's threat to end access to news on Facebook, Instagram
Prime Minister Justin Trudeau says his government will continue to work with social media giants to 'ensure that Canadians can continue to function online in free and open ways.'
Meta already has said it will block Canadian news content on popular platforms like Facebook and Instagram.
Trudeau called Meta's decision "extremely disappointing."
"Facebook continues to refuse to accept its responsibility towards our democracy by refusing to pay its fair share," Trudeau said.
The bill has been pitched as a way to keep news outlets solvent after advertising moved en masse to digital platforms, virtually wiping out a major revenue stream for journalism.
The dominance over advertising once enjoyed by legacy media is over. Google and Facebook have a combined 80 per cent share of all online ad revenue in Canada and rake in an eye-popping $9.7 billion a year, according to government data.
According to government figures, more than 450 news outlets in Canada have closed since 2008 and at least one third of Canadian journalism jobs have disappeared over that same time period.
Print and digital news businesses have struggled to make money from their content after losing major revenue streams, such as classified ads and subscriptions.
In an era of cord-cutting, some private and public broadcasters also have failed to adequately monetize their airwaves to pay for local, regional and national radio and TV news.
After years of losing money, Bell Media-owned CTV recently announced deep cuts, essentially closing the company's foreign bureaus and downsizing their footprint in Ottawa and Washington, D.C.
Pointing to layoffs and a struggling news industry, Rodriguez said Thursday "the status quo is not working." He said the new legislation is meant to "level the playing field by putting the power of big tech in check."
In an attempt to reverse the revenue decline, the government's new regulatory regime will require companies like Google and the Meta-owned Facebook — and other major online platforms that reproduce or facilitate access to news content — to either pay to post content or go through a binding arbitration process led by an arms-length regulator, the Canadian Radio-television and Telecommunications Commission (CRTC).
An outlet will be considered an eligible news business if it regularly employs two or more journalists in Canada, operates largely within Canada and produces content that is edited and designed in this country.
Google and Meta have signalled they'd rather get out of the news-posting business altogether rather than deal with this process.
In a separate statement, a spokesperson for Google Canada said the government's legislation "will make it harder for Canadians to find news online, make it harder for journalists to reach their audiences, and reduce valuable free web traffic to Canadian publishers."
But Google signalled it may be willing to change course if the government addresses some of its concerns.
"We hope that the government will be able to outline a viable path forward," said Google spokesperson Shay Pardy.
CBC/Radio-Canada could be a beneficiary of this new federal program because it operates one of the largest news sites in the country and links to its content are regularly shared on other platforms.
Under the new law, CBC is required to provide an annual report on any compensation for news it receives from digital operators.
"We all depend on an open Internet. It would be unfortunate if the digital platforms used their dominance to deny Canadians access to news and information. We encourage Canadians to go directly to the websites and apps they trust for their news," said Leon Mar, a spokesperson for CBC/Radio Canada.
OpenMedia, an advocacy group that has attacked the bill in the past, said Thursday that Google's decision is "exactly what we warned Heritage Minister [Pablo] Rodriguez about."
"Unfortunately, the way this bill was written made news blocking inevitable," said Matt Hatfield, the group's campaigns director.
"Instead of building a much-needed sustainable funding model that would support quality and diverse news, C-18's failures will make it even more difficult for Canadians to access the news they need on the platforms they use."
Michael Geist is a Canada research chair in internet and e-commerce law at the University of Ottawa and a fierce critic of the bill.
He said Rodriguez, the minister who shepherded this legislation through Parliament, "did not take risks of the flawed Bill C-18 seriously."
Geist said the minister is "squarely to blame" for Google's decision, which risks imperilling an already fragile industry.
"Cannot overstate the harm from this: news sector loses hundreds of millions, Canadians face degraded search results, and prominence of low-quality sources increase," Geist tweeted.
In a media statement, the NDP was scathing in its criticism of Google.
The party's heritage critic, Peter Julian, said "multibillionaire web giants" like Google and Meta are "playing games" with the future of Canadian media, something he called a "shameful" practice akin to "bullying."
"When the time comes to draw the line and ask them to pay their fair share, Meta and Google resort to bullying tactics showing Canadians their true colours: if they don't like the rules, they won't follow them — even if those rules are in place to protect good quality journalism and Canadians," Julian said.
Julian said the same companies now threatening to block news content have been slow to root out the disinformation and "hate speech" that regularly circulates on their platforms.
They're throwing their weight around now, Julian said, and trying to stop a bill that "enhances fairness in the news market."
"It's ironic to see these ultra-rich web giants act so fast to block reliable news information from Canadians when they don't get their way, and yet are not as eager to stop the festering hate speech on their platforms," he said.
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