The government released its draft Bill C-18 regulations on Friday ahead of the Labour Day weekend, but ironically those regulations do very little to ensure that new funding will be allocated toward employing journalists. While the regulations establish what amounts to a minimum 4% link tax on Google and Meta if they link to news content, they set no minimum requirements to spend the resulting revenues on journalists or news content. In fact, the government specifically dictates to the CRTC that the legislative requirement that an “appropriate portion of the compensation will be used for the production of local, regional and national news content” will involve no minimum amount and the agreements need only reference that “some” of the compensation will be used for that purpose. As a result, in the best case scenario for the government in which the Internet platforms pay for links by reaching commercial agreements with news outlets, the big beneficiaries such as Bell, Rogers, the CBC, and Postmedia would be free to spend the vast majority of the money generated by those deals on executive salaries, debt repayment, or any other purpose.
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A 4% Link Tax: Why the Government’s Draft Bill C-18 Regulations Just Increased the Chances of No News on Meta and Google in Canada
The government is releasing its draft regulations for Bill C-18 today and the chances that both Google and Meta will stop linking to news in Canada just increased significantly. In fact, with the government setting an astonishing floor of 4% of revenues for linking to news, the global implications could run into the billions for Google alone. No country in the world has come close to setting this standard and the question the Internet companies will face is whether they are comfortable with the global liability that would see many other countries making similar demands. The implications are therefore pretty clear: there is little likelihood that Meta will restore news links in Canada and Google is more likely to follow the same path as the Canadian government establishes what amounts to 4% link tax from Bill C-18 on top of a 3% digital services tax and millions in Bill C-11 payments.