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Members of the media preview new Google products at a company event in Mountain View, Calif on May 10, 2023JOSH EDELSON/AFP/Getty Images

Google warned Thursday it will remove links to Canadian news stories from search results in this country after failing to receive the assurances it wanted from Ottawa about the Online News Act.

The move marks a dramatic escalation of the tech giant’s response to the act, also known as Bill C-18, after a failed last-ditch attempt to strike a deal with the federal government this week.

“Bill C-18 has become law and remains unworkable,” said Kent Walker, Google’s president of global affairs, in a blog post Thursday explaining the company’s decision. “We’re disappointed it has come to this.”

What to know about Bill C-18, the new law that will affect how you get news in Canada

Bill C-18, which got royal assent last week, was designed to support the Canadian news industry, which has seen its advertising migrate to the Big Tech platforms. It would make Facebook and Google negotiate deals to compensate news outlets in Canada for posting or linking to their work.

Meta, which owns Facebook and Instagram, has also said it will block the posting and sharing of Canadian news stories on both platforms in this country in response to the legislation, which will come into force in about six months.

Facebook and Google have reached a number of voluntary deals with Canadian news organizations, including The Globe and Mail, to pay for using their content.

Facebook has now written to news publishers it has financial deals with, including The Globe, telling them it is cancelling those agreements at the end of July because of the Online News Act. The move includes the ending of news fellowships sponsored by Facebook with The Canadian Press, the national news service that supplies stories to papers and broadcasters across the country.

Google said Thursday it would also move to end its existing agreements with news organizations, but they would continue for the time being. The agreements would be cancelled after it blocks links to news. It also plans to restrict access in Canada to its Google News and Showcase pages, where stories are curated.

Large foreign news outlets operating in Canada, eligible for payments under the act, may also find their content blocked in searches in this country.

Heritage Minister Pablo Rodriguez said Thursday Google and Facebook’s announcements on their intention to block access to Canadian news show “how deeply irresponsible and out of touch they are, especially when they make billions of dollars off Canadian users.”

“Hundreds of newsrooms have closed because billions in advertising revenue they used to rely on has shifted to Google and Facebook. The Online News Act levels the playing field by putting the power of Big Tech in check,” he said.

“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.”

In his blog explaining the tech giant’s decision to remove links to Canadian news, Mr. Walker implied a withdrawal from news could still be avoided if the government can find a compromise that meets the tech giants’ concerns.

Google still plans to “participate in the regulatory process” that will determine how the bill is implemented, he wrote.

“We hope the Government will be able to outline a viable path forward. Otherwise, we remain concerned that Bill C-18 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,” he wrote.

Google has argued Bill C-18 is heavy-handed and would impose unlimited financial liability on the company. It says that under the legislation, it has no obvious path to exemption from regulation even if it negotiates more voluntary deals with news organizations.

By withdrawing from news by removing links to Canadian news stories from search results in this country, Google would no longer be regulated under the act and forced to negotiate deals with publishers.

Its announcement drew an angry response in Ottawa. Peter Julian, NDP Heritage critic, accused Meta and Google of “bullying tactics” rather than paying “their fair share.”

“Enough with the bullying. Enough with the free passes to multibillionaires who think they should have their way instead of following rules like the rest of us,” he said.

But Professor Michael Geist, the University of Ottawa’s Canada research chair in internet law, said the Heritage Minister “has scored the ultimate own goal, taking millions away from the sector and leaving Canadians in a far worse position than if he had done nothing at all.”

“Google’s decision to exit the news market in Canada due to Bill C-18 will have enormous negative consequences,” he said. “The risks of the Bill C-18 approach of mandated payments for links with uncapped liability has been obvious for months, yet the government chose to ignore it, seemingly betting it was all a bluff that could be countered with some tough talk.”

The Online News Act has passed but the government has the power to issue regulations, setting out how it would be implemented, as does the regulator, the Canadian Radio-television and Telecommunications Commission.

The government has indicated it hopes to hold talks with both Google and Facebook about how the regulations could be framed to address some of their concerns.

In an interview with The Globe this week, Mr. Rodriguez said he said he was willing to “talk about the regulations and see if we can agree on stuff.”

However, a letter his office sent to Google on Wednesday failed to provide the tech giant with the assurances about the implementation of the bill it had sought, prompting it to make the decision to withdraw from news.

Paul Deegan, president and CEO of News Media Canada, said without news Google will be less valuable as a search engine. But he struck a conciliatory note, hoping that the tech giant would stay at the negotiating table as a “good corporate citizen.”

“Google has stated that it plans to participate in the regulatory process and it hopes that the government will be able to outline a viable path forward,” he said. “We believe there is a viable path forward.”

In parliamentary committees, Google had suggested a series of amendments to the bill that were not accepted, including removing payments for audio and video. It said it would prefer to pay into a fund to support the Canadian news industry.

“Google and Meta have shown their complete disregard for our democratic institutions by threatening to block news here in Canada,” said Kevin Desjardins, president of the Canadian Association of Broadcasters.

“We believe this will be an issue for the Competition Bureau to scrutinize closely if Google and Meta refuse to engage in a good faith negotiation regime and the forthcoming regulatory processes.”

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