New Regulations Confirm Google Will Pay Canadian News Outlets $100 Million Per Year
The Canadian government has released the finalized regulations for the Online News Act, cementing Google’s requirement to pay Canadian news publishers over $100 million annually starting next year. The act is aimed at supporting Canada’s struggling news industry by requiring tech giants like Google and Facebook to provide fair compensation to news outlets for using their content.
In a pivotal move to fortify the pillars of democracy, the Government of Canada has officially unleashed the final regulations for the groundbreaking Online News Act. Aimed at preserving the vitality of journalism and countering the digital juggernaut, these regulations underscore the significance of a free, robust, and independent press.
The Honourable Pascale St-Onge, Minister of Canadian Heritage, spearheaded the release of the definitive guidelines, emphasizing the Act’s pivotal role in ensuring fair compensation for newsrooms nationwide. With the advertising market under siege from digital giants, these regulations are set to rejuvenate the news sector, providing essential financial support for media outlets to continue serving their local communities.
Under the Act, Google Search, a digital titan, is slated to fall within the regulatory thresholds. In a landmark commitment, Google will contribute a staggering $100 million annually, indexed to inflation, to support a diverse array of news businesses. This financial lifeline will extend to independent news outlets and those serving Indigenous and official-language minority communities.
Crucially, the regulations grant Google the flexibility to collaborate with a single collective for the distribution of its financial contributions, ensuring an equitable share for all eligible news businesses. The dynamic nature of the Canadian news industry is meticulously accounted for, with a cap on the total amount that broadcasters can receive as a group.
Before reaching this milestone, proposed regulations underwent public consultation from September 2 to October 2, 2023, garnering input from a spectrum of stakeholders, platforms, and the general public. The result is a finely tuned set of regulations that strike a balance between providing clarity for platforms and offering robust support to Canadian news businesses.
Looking ahead, the Canadian Radio-television and Telecommunications Commission (CRTC) is poised to embark on consultations for its own regulations under the Online News Act. Details on participation will soon be available on the CRTC website.
In a statement, Minister Pascale St-Onge remarked, “The Online News Act recognizes the vital work of journalists and is bringing tangible results for the sustainability of news for years to come. This is an important, historic step forward that will enhance Canadians’ access to reliable, fact-based information and news.”
Specifics About the Online News Act
The Government of Canada released the final regulations for the Online News Act. The Act aims to enhance fairness in the Canadian digital marketplace and to contribute to the sustainability of the Canadian news sector. It does this by establishing a bargaining framework for commercial agreements between the largest digital platforms and news businesses. This framework includes several safeguards to preserve the independence of the press.
The key objective of the Act is to encourage platforms and news businesses to reach voluntary commercial agreements to fairly compensate Canadian news businesses when news content is distributed on those platforms. Failing that, it provides for a mandatory bargaining process, backstopped by final offer arbitration.
The Canadian Radio-television and Telecommunications Commission (CRTC) is the arm’s-length body that oversees the bargaining framework established by the Act.
Draft Regulations were published online between September 2, 2023, and October 2, 2023, for public consultation. The final Regulations take into account feedback that was provided by stakeholders, including news businesses and associations, digital platforms, academics and observers of the news media industry, and the general public.
The Regulations establish the factors that determine if the Online News Act applies to a digital platform and when it is required to notify the CRTC that the Act applies to it. The Regulations also provide greater direction to the CRTC on how to interpret the criteria set out in the Act to determine if a digital platform qualifies for an exemption from the mandatory bargaining and final offer arbitration processes.[MG1]
The CRTC is developing its own regulations and procedures as part of administering the Online News Act, including, among other things, the exemption process, the code of conduct, the eligibility of news businesses, and the structure and conduct of groups of eligible news businesses.
A digital platform must meet all the following thresholds in order to be subject to the framework:
- Earn a total global revenue of $1 billion (CAD) or more in a calendar year.
- Operate in a search engine or social media market involving the distribution and access of online news content in Canada.
- Operate in a strategic market identified above and have 20 million or more Canadian average monthly unique visitors or Canadian average monthly active users.
Together, these thresholds establish when there is a significant bargaining imbalance between a digital platform and news businesses.
The Act requires digital platforms to notify the CRTC if it applies to them. Regulations establish a timeframe of 180 days, which takes into account the time required for platforms to bargain with news businesses and seek an exemption without being subject to mandatory bargaining and final offer arbitration.
In assessing whether a platform has met the criteria for an exemption order, the CRTC must consider whether agreements submitted by a platform between a news business or a group of news businesses:
- provide fair compensation;
- ensure that an appropriate portion of the compensation be used to support the production of local, regional and national news content;
- uphold the freedom of expression and journalistic independence enjoyed by news outlets;
- contribute to the sustainability of the Canadian news marketplace;
- involve a range of news businesses and outlets; and
- ensure benefits to a significant portion of Indigenous and official-language minority communities and independent news businesses.
The Regulations provide more specific direction on how certain exemption criteria could be met.
Open call process
The Regulations require that, as a condition for the CRTC to make an exemption order, there be an open call process. The platform must publish a notice of the open call on its website for at least 60 days and request the CRTC do the same. It must also publish a list of respondents to the open call process and request the CRTC do the same.
As part of the open call process, news businesses and news outlets must attest that they meet the eligibility criteria under the Act. When making an exemption order, the CRTC must only consider the impact of the agreements on news businesses and news outlets that have attested to their eligibility under the Act.
The CRTC must consider an agreement fair if it provides comparable compensation for similar news businesses.
The CRTC must consider agreements as providing an appropriate portion of compensation for the production of local, regional and national news content if those agreements include a commitment to use a majority of monetary compensation to support the production of local, regional and national news content.
Protecting editorial independence
The CRTC must determine that agreements sufficiently protect journalistic independence if they include a commitment from platforms that:
- no retaliatory action will be taken in response to an editorial decision taken by a news business or news outlet;
- no restrictions will be placed on any effort by the news business or news outlet to protect its journalistic independence; and
- no interventions will be made in a news business’s or news outlet’s editorial process.
Sustainability of the Canadian news marketplace
In assessing whether agreements contribute to the sustainability of the Canadian news marketplace, the CRTC must consider the monetary contribution to sustainability laid out in the agreement as well as the platform’s share of the Canadian Internet advertising market.
For the search engine with the greatest share of Canadian Internet advertising revenues, the CRTC must interpret agreements as sufficiently contributing to sustainability if monetary compensation is CAD $100 million, indexed to inflation. This does not preclude the largest search engine from offering additional non-monetary contributions to Canadian news businesses.
Agreement with a single group of news businesses
Should a platform enter into an agreement with a single group of news businesses, the CRTC must consider certain exemption criteria as being fulfilled if two conditions are met: (1) the group remains open to any news business that responded to the open call, and (2) the agreement commits to equitable distribution of compensation among members of the group (based on the number of employees engaged in the production of news content). These conditions will help ensure that a range of Canadian news businesses across the country benefit from the compensation, including independent, local media and news businesses serving Indigenous and official-language minority communities.
In this scenario, to reflect the dynamics in the Canadian news marketplace, the total amount that can be received by broadcasters and CBC/Radio-Canada is capped. Broadcasters can receive no more than 30% of the compensation, and CBC/Radio-Canada can receive no more than 7% of the compensation.
- Google’s Historic Commitment: On a pivotal day, November 29, 2023, Google, the tech behemoth, took a monumental step in supporting the news ecosystem across Canada. In a groundbreaking commitment, the company pledged an annual financial support of a whopping $100 million. This commitment, indexed to inflation, serves as a formidable injection of funds aimed at sustaining and fortifying a diverse range of news businesses, including independent outlets and those catering to Indigenous and official-language minority communities. This unprecedented financial lifeline is set to reshape the landscape of news dissemination, ensuring the continuation of reliable, community-centric journalism.
- Government’s In-Depth Consultations: The journey toward unveiling the final regulations for the Online News Act was far from unilateral. The Government engaged in a comprehensive and intensive consultation process, spanning from news sector stakeholders to digital platforms and, crucially, the general public. This inclusive approach aimed to capture diverse perspectives and insights, fostering a nuanced understanding of the challenges and opportunities within the evolving media landscape. The refinement of the draft regulations, influenced by this broad spectrum of input, signifies a collaborative effort to strike a balance between regulatory clarity for platforms and robust support for Canadian news businesses.
- CRTC’s Central Role: The administration and enforcement of the Online News Act fall under the jurisdiction of the Canadian Radio-television and Telecommunications Commission (CRTC). This regulatory body will play a central role in overseeing various facets of the Act’s implementation. From managing exemption processes and determining news business eligibility to crafting a comprehensive Code of Conduct, the CRTC’s mandate extends to curbing discrimination and undue preference within the news industry. By taking charge of these critical aspects, the CRTC aims to ensure fair play, transparency, and accountability in the evolving digital news landscape.
- Remuneration Caps for Broadcasters and CBC/Radio-Canada: Acknowledging the dynamic nature of the Canadian news industry, the Online News Act imposes remuneration caps to prevent concentration and promote fair distribution of funds. Broadcasters, as a collective group, face a cap limiting their remuneration to no more than 30 percent. Similarly, the national public broadcaster, CBC/Radio-Canada, is subject to a cap, ensuring that it does not receive more than seven percent of its remuneration. These caps are strategic measures to prevent undue concentration of financial support, fostering a more equitable distribution across various news entities. This approach safeguards against potential monopolization, fostering a diverse and resilient news ecosystem in Canada.
Here’s what it means for you
- $100 million every year, forever: That’s right, Google’s contribution isn’t a one-time handout. It’s a steady stream of funding for Canadian news, ensuring a brighter future for journalism in our communities.
- Fair play for all: This isn’t just about the big national names. Independent news outlets, Indigenous media, and official language minority voices will all get their fair share of the pie, ensuring a diverse and vibrant news landscape across Canada.
- No more shady deals: Google gets to choose how to distribute the funds, but transparency and fairness are key. A single collective will oversee the process, making sure every eligible newsroom gets its rightful cut.
This is a landmark moment for Canadian democracy. A powerful message is being sent: reliable, fact-based news matters. And thanks to the Online News Act, Canadians can finally have confidence in the information they consume.