Canada to Compel Digital Platforms to Pay News Outlets -- Update

By Paul Vieira

OTTAWA--Canada said Tuesday it was introducing legislation to require big digital platforms, such as Meta Platforms Inc.'s Facebook and Alphabet Inc.'s Google, to compensate domestic media companies for sharing their news content.

The Liberal government said the legislation would compel digital platforms to make "fair commercial deals" with news publishers, which incorporates print, digital and broadcasting outlets. Should negotiations fail to come to an agreement, the legislation envisages the two sides entering binding arbitration to determine appropriate compensation.

The Canadian Radio-television and Telecommunications Commission, the country's telecommunications and broadcasting regulator, would be responsible for ensuring enforcement.

Canada promised such legislation last year, following Australia's implementation of rules effectively requiring Facebook and to pay traditional media companies for content. Australia's push prompted Facebook to remove news from its platform in the country for a period of five days, but later restored after the company and Australian officials reached an agreement.

Officials said the legislation is needed because Canadians are turning to digital platforms to access news. Google and Facebook, combined, account for roughly 80% of online advertising revenue, officials said in a briefing document.

"The news business in Canada is in crisis," said Pablo Rodriguez, Canada's heritage minister, who is responsible for cultural policy. The platforms "continue to profit from the sharing and distribution of Canadian news content without really paying for it. We are seeking to address this market imbalance."

Mr. Rodriguez said the Canadian plan is similar to Australia's, with some adjustments to account for Canadian-specific issues.

The legislation is expected to pass, as the minority Liberal government enjoys the support of a smaller left-wing party to get legislation approved. It is unclear how long it will take for the bill to clear all parliamentary hurdles.

Representatives for Meta and Google said their companies were examining the legislation to determine its effect.

Besides Australia, Meta has agreed to pay publishers in France for their news content and previously agreed to commercial deals with 18 Canadian news publishers. Google's Canadian unit last year announced it reached financial deals with 11 Canadian publishers.

Write to Paul Vieira at [e-mail]

(END) Dow Jones Newswires

April 05, 2022 14:56 ET (18:56 GMT)

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