Canada to force Google, Facebook to pay news publishers

[ONTARIO] Canada is planning a bill that would force tech companies to pay local news publishers for content, the latest move by a government to help struggling media companies that have seen online advertising revenue drain away to Silicon Valley's digital giants.

Heritage Minister Pablo Rodriguez said he will introduce a bill called the Online News Act to ensure companies like Alphabet and Meta Platforms compensate local news organisations for their content through privately-negotiated deals. The law could benefit listed Canadian companies such as Postmedia Network Canada.

"More and more Canadians are turning to digital platforms as gateways to find their news content today, and this shift online has had an incredible impact on news businesses," Rodriguez told reporters at a news conference on Tuesday (Apr 5). "They continue to profit from the sharing and distribution of Canadian news content without really having to pay for it. So with this bill, we're seeking to address this market imbalance."

The Canadian effort follows Australian legislation last year that demanded platforms pay local news publishers, and Rodriguez said Canada studied the Australian law extensively. That law resulted in a multi-year deal between Rupert Murdoch's News and Facebook after the social media giant started restricting the sharing of news articles. US lawmakers have also introduced similar legislation, while news publishers have lobbied in Europe for something modelled on the Australian law.

Canada's new law would enable news businesses to bargain in groups on issues including the ways that platforms reproduce or facilitate access to news content, senior government officials said at a briefing on Tuesday. It would also require digital platforms that have a "significant bargaining imbalance" with news businesses to make fair commercial deals and is enforced by mandatory bargaining and final offer arbitration, officials said.

The proposed legislation - enforced by the Canadian Radio-television and Telecommunications Commission - is designed to help a Canadian media sector that saw 450 outlets close between 2008 and 2021, according to the government.

The bill comes 2 months after Rodriguez's separate proposal to amend the country's Broadcasting Act to require online streaming services like Netflix and Spotify Technology pay into local funds to support Canadian artists. The Online Streaming Act is currently under review by parliament. BLOOMBERG