In response to Canada’s recently passed C-18 bill, Google announced its decision to remove links to Canadian news from its Search, News and Discover products.

Unfortunately, we made the difficult decision to remove Canadian news links from our Search, News and Discover products with the enactment of Bill C-18. https://t.co/ilWrF1uRuS pic.twitter.com/wMdoignNlC

– Google Canada (@googlecanada) June 29, 2023

In this article, we look at the Online News Act and how Bill C-18 has prompted major tech platforms like Google and Meta to make changes to search and social platforms that will impact how Canadians access online news .

What is the Online News Act?

Bill C-18, known as the Online News Act, is a law introduced in Canada to regulate digital intermediaries such as search engines and social media platforms that distribute news content and addresses the relationship between these digital platforms and news companies.

At its core, the law aims to create a framework for news companies in Canada to negotiate compensation with digital platforms that distribute their content. This is in response to perceived imbalances in bargaining power between these companies.

News organizations that are allowed to initiate this negotiation process must meet certain criteria, including operating within Canada and employing at least two journalists.

Should the negotiations remain unsuccessful, the law provides for an arbitration procedure for the final offer. An independent panel reviews the final offers from both parties and makes a binding decision, taking into account the value proposition of both the digital platform and the news business.

The law is drafted to conform with the Canadian Charter of Rights and Freedoms. The aim is to be consistent with freedom of expression and journalistic independence.

Big Tech’s answer

In response to Bill C-18, Google and Meta have taken the significant step of removing news content from their platforms in Canada.

Because the law’s framework requires negotiations for indemnification and the possibility of binding arbitration, these tech giants may be concerned about the unpredictability and financial implications of such engagements.

Their decision to remove news content could be an indication of how they balance the cost-benefit of complying with the new regulatory environment versus the value they derive from the distribution of news content in the Canadian market.

It also highlights the challenges and complexities of finding a middle ground that serves the interests of both digital platforms and news organizations within the regulatory framework.

Official statement from Google on removing news links in search

In a recent blog post, Kent Walker, president of global affairs at Google and Alphabet, stated:

The government has given us no reason to believe that the regulatory process can solve structural problems with legislation. As such, we have notified the government that we have made the difficult decision to remove links to Canadian news from our Search, News and Discover products and to no longer operate Google News Showcase in Canada when the law goes into effect .

Google has raised concerns about the legal obligation to pay for showing news links, which it calls a “link tax.”

According to the latest update, Google introduced product insecurity in this aspect of the law and exposed the company to unlimited financial liability.

In addition, Google noted that the Canadian government has not provided any assurances that the regulatory process will address what the company sees as structural problems within the legislation.

Despite its stated commitment to Canadian journalism through programs and partnerships, including the Google News Showcase, Google believes the current form of Bill C-18 is unworkable. As a result, Google removed News links, a practice it tested in early 2023.

The company disclosed its efforts to provide feedback, recommend changes, and support an alternative model with an independent journalism fund.

However, Google claimed the proposals had not been taken into account, raising concerns about the law’s impact on news access and journalists’ outreach in Canada.

The company is committed to maintaining transparency with Canadians and publishers, but has expressed concern about the consequences of the C-18 bill should the government fail to address its concerns going forward.

Based on data from Similarweb, news and media companies get an average of 20% or more of traffic from organic searches. Google has 92% of the search market share in Canada.

Screenshot from Similarweb, June 2023

Meta will not negotiate Bill C-18 with Canada

In a CBC News interview, Rachel Curran, Meta Canada’s head of public policy, discussed Meta’s response to the Online News Act.

Meta also released an update on its decision to stop making news content available on Facebook and Instagram for users in Canada.

The company conducted product tests to prepare for this move, which affected only a small portion of Canadian users. Meta stressed that while news content will not be available, other services and products, including connecting with friends and family, business tools, and community support features, will function normally.

Additionally, Meta stated that it will continue its efforts to combat misinformation through its global fact-checking network.

According to Meta, the changes would impact Canadian and international news outlets. While these outlets will still have access to their accounts and pages and may post news links and content, some content will not be visible to users in Canada.

Nick Chegg, Meta’s President of Global Affairs, released a statement on the impact these changes would have on news outlets.

We estimate that the Facebook feed sent more than 1.9 billion clicks to registered news publishers in Canada in the 12 months ended April 2022. That equates to free marketing that we estimate is worth more than $230 million. Publishers choose to share their content because it drives traffic to their sites. It helps them sell more subscriptions, grow their audience, and show their ads to more people than they otherwise could have done.

Meta has been vocal in criticizing the Online News Act, describing it as fundamentally flawed in ignoring the dynamics of their platforms and user preferences.

The company felt the legislation failed to recognize the value of meta-platforms for news publishers.

Prime Minister of Canada Justin Trudeau called Meta’s reaction “disappointing”.

According to Statcounter, Facebook and Instagram hold nearly 60% of Canada’s social media market share.

Screenshot from Statcounter, June 2023

The future of online news in Canada

The passage of Canada’s Online News Act, Bill C-18, marks a crucial turning point in the relationship between digital platforms and news companies.

The law eliminates imbalances in bargaining power and compensates news outlets for their content. However, responses from Google and Meta suggest the tech giants are unwilling to adapt to the new regulatory framework, which has prompted them to remove Canadian news content.

This development raises important questions about the future of news distribution via digital platforms in Canada and the evolving dynamics of regulation, technology and journalism.

The effectiveness and consequences of Bill C-18 are being closely monitored in Canada and other countries grappling with similar issues.

Featured image: JHVEPhoto/Shutterstock