Google Rejects Canadian Olive Branch On News Act

Alphabet Inc.’s Google moved closer to blocking Canadians from viewing news links on its search engine, after it rejected government regulations meant to placate its concerns about an impending online content law.

Bloomberg reports it’s the latest blow to Prime Minister Justin Trudeau’s government and its efforts to compel Google and Meta Platforms Inc. to negotiate payments with local publishers under the Online News Act, due to come into effect on Dec. 19. Google’s move comes about a month after Meta similarly dismissed the regulations and said that it will continue blocking users in Canada from seeing news on Facebook and Instagram to avoid running afoul of the law.

“We continue to have serious concerns that the core issues ultimately may not be solvable through regulation and that legislative changes may be necessary,” Google spokesperson Shay Purdy said by email Friday.

The details of the bill published on Sept. 1 said that both companies can avoid arbitration by agreeing to pay news outlets a minimum of 4% of their annual revenue in Canada in return for carrying links to news articles. Under those terms, Google would be expected to pay about $126 million per year, according to the government’s estimates. The offer was an apparent olive branch to address concerns of uncapped financial liabilities. 

“The result of this exercise is a hybrid model that captures the worst of both worlds, imposing the obligations of a levy without providing any of its certainty, and requiring Google to absorb all of the responsibilities and costs associated with negotiating agreements and disbursing funds while eliminating any flexibility in actual arrangements,” the company said.

Google already threatened to remove links to news, and tested blocking such content for a small percentage of users in Canada earlier this year. On Friday, it went further, implying a block could be imminent as the current regulations would force the company to participate in the mandatory bargaining process while it applies for exemption.