Online News Act comes after more than 450 news outlets closed in Canada since 2008 as digital platforms took over the space.

New law would require tech giants to make fair commercial deals with Canadian outlets for the news and information that is shared on their platforms or face binding arbitration.
New law would require tech giants to make fair commercial deals with Canadian outlets for the news and information that is shared on their platforms or face binding arbitration. (Reuters Archive)

The Canadian government has unveiled legislation that would require global digital giants to pay for local news content, in step with a landmark law passed by Australia last year.

The Online News Act, which is expected to be passed into law by Prime Minister Justin Trudeau's Liberal government with backing from a small leftist faction, comes after more than 450 news outlets closed in Canada since 2008 as digital platforms took over the space.

"The news sector in Canada is in crisis and this contributes to the heightened public mistrust and the rise of harmful disinformation in our society," Heritage Minister Pablo Rodriguez told a news conference on Tuesday.

He noted billions of dollars in advertising revenues that once fed newsrooms across Canada now go mostly to two companies: Facebook and Google.

"We want to make sure that news outlets and journalists receive fair compensation for the work. We want to make sure that local independent news thrives in our country," Rodriguez said. "It shouldn't be free."

The new law would require tech giants to make fair commercial deals with Canadian outlets for the news and information that is shared on their platforms or face binding arbitration.

READ MORE: Google to pay German media for online content under ''milestone'' deal

'Neighbouring rights'

It builds on Australia's New Media Bargaining Code, which was a world-first, aimed at making Google and Facebook pay for news content on their platforms.

Australian regulators, too, had accused the companies, that dominate online advertising, of draining cash away from traditional news organisations while using their content for free.

Big tech firms had fiercely opposed the Australian legislation initially, fearing it would threaten their business models, but with amendments, it was easily passed by lawmakers.

Google, meanwhile, signed agreements in November with French newspapers to pay for their content, after the EU introduced in 2019 a law on "neighbouring rights."

The AFP news agency signed a five-year content agreement with Google at the end of 2021, as well as two commercial contracts.

READ MORE: Australia to force Google and Facebook pay for news in unprecedented move

Source: AFP