Bill C-18 could see Google, Meta pays 4 per cent of their Canadian search revenue to the news

Photo courtesy of IT World Canada

Article courtesy of Ashee Pamma, IT World Canada

TORONTO. – For the first time, the government has outlined draft regulations intended to establish specific criteria for the implementation of Bill C-18, which til now has been marred with uncertainties.

As part of the proposed regulations, the government created a formula that would see Meta and Google cough up four per cent of their annual Canadian search revenue to Canadian news media.

Government officials clarified to media that Google’s contribution would be C$172 million and Meta’s would be $62 million, for a total of C$234 million.

The intention, the government said, is “to ensure a meaningful contribution to the sustainability of the Canadian news marketplace, while also providing platforms with sufficient degree of business certainty.”

The government believes the calculation will deliver a contribution that is within 20 per cent of the earnings of full-time journalists working in a Canadian news organization.

Final compensation amounts would depend on negotiations between platforms and news businesses, but the calculation provides criteria under which the discussions would take place.

University of Ottawa internet law professor Michael Geist argues that the four per cent  is “picked out of thin air” and “would be used by other countries as a global minimum for similar payments.”

He added, “No country in the world has come close to setting this standard and the question the internet companies will face is whether they are comfortable with the global liability that would see many other countries making similar demands.”

Meta, in fact, remains unconvinced by the Canadian Heritage latest move. Head of public policy Rachel Curran maintained, “As the legislation is based on the incorrect assertion that Meta benefits unfairly from the news content shared on our platforms, today’s proposed regulations will not impact our business decision to end news availability in Canada.”

Google spokesperson Shay Purdy, on the other hand, said that the company is “reviewing the proposed regulations to assess whether they resolve the serious structural issues with C-18 that regrettably were not dealt with during the legislative process.”

If either Google and Meta want to be exempted from the bargaining process prescribed in the legislation, the CRTC will have to determine, among other factors, whether they already have agreements in place providing fair compensation to news businesses, upholding journalistic independence, contributing to the sustainability of Canadian news marketplace, supporting Indigenous news businesses and more.

Companies would also be able to satisfy the exemption criteria with non-monetary compensation, which officials said could include training and advertising.

The draft regulation also mandates that digital platforms notify the CRTC, within 30 days, that the legislation applies to them, the intent being to “scope into the regulatory regime the largest and most prominent digital operators that have a significant bargaining power imbalance with news businesses.”

Under the proposed regulations, if a digital platform has a total global revenue of $1 billion or more in a calendar year, operates a search engine or social media market distributing news in Canada, and has 20 million or more Canadian average monthly unique visitors, it falls under the legislation.

So far, only Meta’s Facebook and Google meet these criteria, although officials told media that Microsoft’s Bing is the next closest to falling under the criteria.

Meta’s Instagram and Threads would not be subject to the legislation under these new requirements. But the company has already started blocking news for millions of users on Instagram and Facebook.

The draft regulations are open to public consultation for a 30-day period. Businesses, academics, civil society, and all Canadians can submit their comments here, following which the final regulations will be published in the Canada Gazette, binding the CRTC to its implementation of the Act.