Google, a subsidiary of Alphabet Inc, has taken a significant step towards restricting access to news links on its search engine for Canadian users. As per a Bloomberg report, this development follows the company’s rejection of government regulations to address its concerns regarding an impending online content law.
This move represents a setback for Prime Minister Justin Trudeau’s administration, striving to compel both Google and Meta Platforms Inc. to negotiate for compensating local publishers as mandated by the Online News Act set to take effect on December 19.
About a month ago, Meta similarly rebuffed these regulations and announced its intention to continue blocking Canadian users from accessing news on Facebook and Instagram to remain compliant with the law.
Google’s spokesperson, Shay Purdy, expressed reservations, stating, “We continue to have serious concerns that the core issues ultimately may not be solvable through regulation and that legislative changes may be necessary,” in an email communication on Friday.
The legislation, published on September 1, outlined a provision where both Google and Meta could avoid arbitration by agreeing to allocate a minimum of 4 percent of their annual revenue in Canada to compensate news outlets in exchange for featuring news article links.
Under these terms, according to government estimates, Google would be expected to pay approximately Canadian Dollars 172 million (equivalent to USD 126 million) per year. This offer addressed concerns related to unbounded financial obligations.
However, Google Canada responded on Friday, asserting that while the regulations aimed to “provide clarity about the application of the act,” they inadvertently introduced more significant uncertainty. This was due to their effort to transform the mandatory negotiation framework specified in the Act into more of a levy-based model.
According to Google Canada, this resulted in a hybrid model that combined the drawbacks of both approaches. It imposed the obligations of a levy without offering the corresponding certainty. It required Google to shoulder all the responsibilities and costs associated with negotiation and fund disbursement while eliminating any flexibility in the arrangements.
Google had previously issued warnings about potentially removing news links and had conducted tests to block such content for a small percentage of Canadian users earlier this year.
On Friday, the company took a more decisive stance, hinting at an imminent blockage, as the existing regulations would compel it to engage in the mandatory negotiation process while simultaneously applying for an exemption. The statement pointed out, “The timing problem remains, potentially putting Google in a position of having to suspend links to news content.”
