Jonah Prousky is a management consultant and freelance writer who focuses on business, technology and society.
It was a good day for the federal government, but it’s not out of the woods just yet on Bill C-18.
After months of negotiations, Google GOOG-Q has agreed to pay an inflation-adjusted $100-million a year to Canadian news providers for carrying links to their content. The deal, which was announced last week by Pascal St-Onge, Minister of Canadian Heritage, is a welcome development for the government after its months-long standoff with the tech giant.
On balance, the deal is good for Canada. It will provide much-needed funding to some of the country’s news businesses. It also proves that the federal government can make C-18 palatable for Big Tech, just as many critics were beginning to think negotiations with Google were doomed.
Ottawa’s goal with C-18 was to get tech giants to, as Prime Minister Justin Trudeau put it, “pay their fair share” for displaying Canadian news links. This agreement with Google seems to accomplish that, even if the amount is a little smaller than first expected.
Initially, the government reportedly expected a deal with Google could total $172-million a year. Perhaps that figure was too ambitious. Or, perhaps the state of parts of the country’s news industry led the government to make concessions to expedite a deal. After all, Postmedia Network Canada Corp. PNC-B-T – parent company to the National Post, the Ottawa Citizen and Montreal Gazette – lost nearly $73-million in its 2023 fiscal year.
Whatever the case, the deal is a win-win. The deal has benefits for Google, too, despite adding an annual nine-figure expense to its books. With the U.S. and EU considering similar legislation to C-18, this agreement sends a decisive message: Google is willing to do more to support journalists, but it will do so on its own privately negotiated terms.
For Meta, the deal stands to undermine its bargaining power slightly. If Google could “pay their fair share,” so too can Meta, Ottawa thinks. And, if time was a factor in Canada’s negotiations with Google, perhaps it’s less of an issue now with a $100-million cushion.
But Meta remains obstinate, and it’s unclear if the government will be able to eke out a similar deal with that tech giant.
“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,” wrote a spokesperson for Meta after the announcement of the Google deal, in a statement to CTV News.
The question for Parliament is whether to take this statement at face value. Indeed, Meta’s revenues are not as connected to news as Google’s, since it doesn’t aggregate and curate news content. Rather, links are posted organically by users of Facebook and Instagram.
It might well be in the company’s best financial interest then to continue to block Canadian news instead of cutting a deal with Ottawa. In other words, Canadian news providers might find they need Meta more than Meta needs them. And this gets to the heart of why many critics have said C-18 might simply be unworkable.
Yet, history tells us the company might be more willing to negotiate than it lets on. Meta took similar steps in Australia to limit news access after that country introduced the News Media Bargaining Code. Meta later restored news access after it struck a deal with the Australian government to negotiate private agreements with Australian publications of its choosing.
If Ottawa can see to it that Meta takes a similar line in Canada, C-18 will go down as a success.