Google And Meta could pay up to $170 million to comply with the Canadian Online News Act

Compliance with the regulations could cost the two companies CAD $230 million (US$170 million).

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The Canadian government has introduced regulations to introduce the Online News Act, which would mandate that social media platforms pay news organisations for the content shared on their platforms. A Network 18 report estimates that compliance with these regulations would cost Google and Meta, the social media giants, CAD 230 million.

The proposed rules outline the scope of the act, the criteria for exemption, and the method for calculating compensation for news platforms. These regulations will be open for consultation until October 3, 2023.

The act would apply to digital platforms that earn a total global revenue of CAD 1 billion or more in a calendar year, operate in the search engine or social media market involving the distribution and access of online news content in Canada, and have 20 million or more average monthly unique visitors or average monthly active users in Canada. Platforms meeting these thresholds are expected to inform the Canadian Radio-television and Telecommunications Commission (CRTC) within 30 days. Once the act takes effect, the commission will publish a list of all platforms it covers.

The proposed regulations suggest that compliance costs for digital platforms, including negotiations with news businesses and engagement with the CRTC, would be less than CAD 1 million per year.

Why does it matter?

In response to the Online News Act, Meta has stated that the regulations will not alter its decision to end news availability in Canada, claiming that the regulatory process cannot address the act’s ‘fundamentally flawed premise’. Google, which also plans to exit the Canadian news market, has criticised the approach of charging platforms as a means to support journalism and has pledged to carefully examine the proposed regulations to assess their effectiveness in addressing the challenges posed by the Online News Act.