Google agrees to pay $74M to Canadian news industry under law

Google reached a deal with the Canadian government on Wednesday after months of turmoil over a new law that requires major online platforms to pay news outlets to share their articles.

Pascale St-Onge, the minister of Canadian Heritage, said Wednesday that Google agreed to contribute $100 million in Canadian dollars — about $74 million in U.S. dollars — to the Canadian news industry after previously taking issues with the Online News Act.

In a statement, St. Onge said Google will “play an important role in giving Canadians access to reliable news content.”

“A sustainable news ecosystem is good for everyone,” St-Onge said. “News and journalism serve to inform communities, drive civic engagement and counter the rise of disinformation. Access to news helps Canadians fully benefit and participate in democratic society. With newsrooms cutting positions or closing entirely, the health of the Canadian news industry has never been more at risk.”

The law requires agreements with online platforms and news publishers to compensate the news organizations for content shared online. The framework agreed to by Google and the Canadian government will include financial compensation to a range of news businesses, including independent noutlets and those from Indigenous and minority communities.

The law will go into effect on Dec. 19, the press release added. The Canadian government said it would release more details about the final regulations of the law before it is fully enacted.

St-Onge said Google also indicated that it will also make resources available for Canadian news organizations, including training and tools for business development.

Proponents of the legislation argued that online platforms, like Google and Meta, generated their own ad revenue from these news articles and that the news organizations were not being properly compensated.

Instead of paying the outlets, Meta announced in August that it would stop placing news articles in users’ news feeds in Canada. Google also signaled at the time that it would follow suit, with Google executive Kent Walker saying the law created “uncertainty” for the company.

Canadian Prime Minister Justin Trudeau welcomed the agreement in comments to reporters on Wednesday.

“Google has agreed to properly support journalists, including local journalism,” Canadian Prime Minister Justin Trudeau told reporters on Wednesday, CBC News reported.

He later added that Meta “continues to completely abdicate any responsibility towards democratic institutions.”

Walker, of Google, said in a statement Wednesday that St-Onge acknowledged the companies’ concerns in a series of “productive meetings.”

“While we work with the government through the exemption process based on the regulations that will be published shortly, we will continue sending valuable traffic to Canadian publishers,” Walker said.

According to Google, the $74 million is significantly lower than what the government expected.

One part of the agreement included allowing them to allocate the funds through a single collective, which would bypass the law’s requirement to settle with publishers directly or individually, according to the company.

Updated Nov. 30 at 12 p.m.