Google to cover administrative costs of Online News Act regulation, CRTC decides

Google will have to foot the bill for the costs the CRTC incurs through conducting its new responsibilities under the Online News Act, the regulator has decided. The CRTC finalized its cost recovery regulations Wednesday, Feb. 26, laying out how it will be funding the cost of overseeing negotiations between Alphabet Inc. subsidiary Google and Canadian news businesses. With Google exempt from the mandatory bargaining requirements of the act after striking a $100 million deal with the Canadian Journalism Collective (CJC), the CRTC said that its regulatory costs will be low. Under the Online News Act, the operators of large online search engines or social media services making over $1 billion in global revenues that have at least 20 million monthly active Canadian users must negotiate deals with Canadian news organizations to pay them for distributing their news content. Currently, only Google falls under the jurisdiction of the act, after Meta Platforms Inc. decided to block news content on its platforms in the country. The CRTC’s cost recovery regulations are set to come into force on April 1 and will be based on the gross Canadian revenues generated by Google from making news available. If revenue information is unavailable, the CRTC will estimate it based on market trends and the company’s previous financial performance. The regulator emphasized that it can only charge platforms for its “actual costs” administering the Online News Act. “In other words, if pursue arrangements that result in the commission having to perform less regulatory work, the commission would require fewer resources to administer the act and would incur fewer costs. This would result in lower payments for under the proposed regulations,” the CRTC wrote in its decision. The commission also highlighted that the funds will only be used to support its work under the act and that it will not be using other methods, such as broadcasting fees, to do so. According to the regulations, Google has to report its 2024 news revenue by June 1. In subsequent years, Google (and other platform operators if more become eligible) must report its news revenues by April 30. Google will have to make its payment to the CRTC within 30 days after it receives an invoice from the commission. The CRTC did not immediately respond to a request to provide an estimate of its expected costs. Google declined to comment on the finalized regulations, but pointed to its intervention made during the CRTC’s consultation on the matter, highlighting Google’s opposition to being forced to pay the total cost. “In this notice, the commission inexplicably contemplates no such upper limit on fees, and does not provide a justification for why such an upper limit is not needed in this case where there is no large pool of feepayers,” the company wrote in its original submission. “It is not a rational approach to ask any one company to bear 100 per cent of the costs of a regulation imposed on them,” Google continued. It proposed limiting the amount an individual operator must pay at 50 per cent of the total regulatory costs. “We submit that this is an unfair additional regulatory burden on a company that has continued to support the news ecosystem in this country,” Google said. Canadian laws being targeted in U.S. relations While the digital services tax has been a recent focus of Canada-U.S. talks, the Computer and Communications Industry Association (CCIA), of which Google is a member, recently raised the Online News Act and Online Streaming Act as other challenges that the U.S. should address. In a submission to the Office of the U.S. Trade Representative (USTR), which was tasked by President Donald Trump’s administration to look into foreign regulations it may deem discriminatory to U.S. companies, the CCIA pointed to the act as an example of such discrimination. “Even if not fully tested, the remains an incipient threat to U.S. companies and is the government’s leverage to extract fees,” the CCIA wrote. “Absent repeal, this law still conflicts with several of Canada’s international trade obligations,” the group alleges, “so USTR should remain vigilant of action against these two U.S. companies and any others they may seek to scope into the law.” The association also takes issue with TikTok not being subject to the law. phalentm@thewirereport.ca

Google to cover administrative costs of Online News Act regulation, CRTC decides

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By Phalen Tynes-MacDonald
| February 26, 2025

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Google to cover administrative costs of Online News Act regulation, CRTC decides

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