(Bloomberg) -- Alphabet Inc.’s Google struck a deal with Canadian Prime Minister Justin Trudeau’s government over a contentious law requiring digital platforms to pay for news.
Google agreed to contribute C$100 million ($74 million) in financial support annually, indexed to inflation, for a wide range of news businesses in Canada, Heritage Minister Pascale St-Onge said in a statement Wednesday.
“It’s C$100 million that doesn’t exist right now in the system. It’s new money, new revenue. It’s good for the news sector,” St-Onge told reporters Wednesday in Ottawa, adding Canada can renegotiate if there’s a better deal struck in other countries.
The deal — which came after months of negotiations and strong opposition from both Google and Meta Platforms Inc. — can avert the news block expected next month in Canada on the world’s most popular search engine. News is still not available on Meta’s Facebook and Instagram platforms in Canada.
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The announcement is a win for Trudeau’s Online News Act, also known as Bill C-18. The law is aimed at trying to force both Meta and Google to pay local publishers for featuring news content on their platforms. The measure is an attempt to boost an industry that has suffered from massive losses of advertising revenue. Governments in the US, UK and elsewhere are also pursuing similar legislation to aid journalism.
“We are pleased that the government of Canada has committed to addressing our core issues with Bill C-18, which included the need for a streamlined path to an exemption at a clear commitment threshold,” Kent Walker, president of global affairs at Google and Alphabet, said in a statement. “We will continue sending valuable traffic to Canadian publishers.”
Meta didn’t immediately respond to a request for comment.
Meta and Google had argued they don’t see much financial benefit themselves from news — that they’re actually providing a service to media outlets, large and small, helping them reach readers, potential subscribers and advertisers.
In response to Canada’s law, Meta blocked all links to news content in Canada on Facebook and Instagram since August to avoid making payments. Google had earlier threatened to remove news from search results before the law comes into effect on Dec. 19.
“This shows that this legislation works, that it’s equitable,” St-Onge said. “Now it’s on Facebook to explain why they’re leaving their platform to disinformation and misinformation instead of sustaining our news system and participating in the viability of our news sector.”
(Updates with more details, context and comments throughout.)
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