Will Google exit Canada over new regulations?
Legislative changes aim to make tech giants pay for news content
Canada, have you heard that the biggest search engine in the world is threatening to pull its services from Australia? Google it — while you still can. Ottawa has been developing legislative changes, which are anticipated to be similar to Australia’s, in a bid to make tech giants like Facebook and Google pay for news content.
In Australia, the battle over such changes has been raging and Google signalled on Friday it would yank its search engine services from the country. Australian Prime Minister Scott Morrison’s reply? “We don’t respond to threats.”
Advocates in Canada say this country shouldn’t either.
John Hinds, CEO of News Media Canada, a lobby group that represents media companies in Canada, including Torstar, said the federal government has to start acting on the file soon.
“The idea of a corporate entity threatening a sovereign nation is pretty jarring,” he said. “Governments have to act both individually and together to rein in that power.”
Daniel Bernhard, executive director of Friends of Canadian Broadcasting, an advocacy group, called it “an opportunity, I think, for sovereign states to put these companies back in their place. “If Canada joins with these other countries, then I think we’ll have a much better likelihood of getting Google and Facebook to comply with what are ultimately very sensible regulations that would simply force them to pay their suppliers just like everybody else does,” he said.
Bernhard added that “the math doesn’t add up” for Google threatening to pull services in countries like Canada and Australia, which have multibillion dollar markets.
Australia has been leading the way on a worldwide push to make tech giants pay for the news they use on their platforms. Companies like Google have contended that doing so would be unfair, and that their platforms attract huge amounts of consumer traffic to media websites.
When asked about the developments in Australia, government spokesperson Camille Gagné-Raynauld pointed to comments Canadian Heritage Minister Steven Guilbeault made last September, when he said “the Canadian government stands with our Australian partners and denounces any form of threats.”
“They’re very powerful companies, but it’s not the first time in history that we’ve seen this kind of concentration of power,” Gagné-Raynauld added. “At some point in time, the government says it’s the end of the recess and measures are put in place.”
Canadian officials will be meeting with counterparts in Australia and France next month to work on issues around tech giants, Gagné-Raynauld said.
The federal government hopes to introduce its own legislation this year, she said, calling it a “made-in-Canada” plan that would implement an “equitable digital framework for both Canadian news publishers and digital platforms.”
The proposed Australian model puts in place a bargaining system under which digital platforms and media companies work out payment arrangements. If an agreement can’t be made, an arbitrator would get involved.
Mel Silva, managing director with Google Australia and New Zealand, says the company is willing to pay but that it disagrees with the proposed rules in Australia, calling it a “biased arbitration model” and suggesting it poses an untenable financial risk for the company.
News Media Canada published a report in September 2020 that said Google and Facebook have an “effective duopoly in the market for digital ads” in Canada, having reaped $7.5 billion in Canadian digital ad revenue in 2019, up from a combined $2.8 billion in 2014.
The advocacy group has suggested that Canada adopt a similar model to Australia, where media companies could band together and bargain collectively with tech giants.
Responding to the proposal at the time, Google warned that should Canada adopt News Media Canada’s proposal, it “would undermine Google Search for Canadians.”
The proposal would “slow the rollout of important security updates to products because we’d have to provide publishers with 28 days’ notice of algorithm changes — putting the security and integrity of Search at risk,” said the statement.
“News Media Canada’s demands would give them an unfair advantage over every other site on the internet and undermine trust in Google Search.”
A spokesperson from Google told the Star that the company didn’t have any further comments regarding changes potentially coming to Canada since a policy has yet to be formally introduced.
Multinational tech giants keep getting bigger at the expense of domestic media and competitiveness. This ongoing series looks at the challenge for governments, and how they should respond.