Canada is working on a new bill that will force massive social media companies like Facebook and Google to pay Canadian media outlets when they make money off their content.

Facebook and Google May Have to Pay Media Outlets

Bill C-10, also called Online News Act, was introduced on Apr. 5 and is the Liberal government's latest attempt to support the country's struggling news industry.

The officials said during a technical briefing that the new requirement wouldn't apply to platforms that do not represent a significant bargaining imbalance, like Apple News, or platforms covered by other legislation, like YouTube.

However, if the bill becomes law, social media platforms like Facebook and Google can expect to see a part of the profit they make from news go to the media outlets behind the content, though it will be up to the regulator, the Canadian Radio-television and Telecommunications Commission, to decide which outlets get the profit.

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Outlets that Get to Share the Revenue

The Canadian Radio-television and Telecommunications Commission will use criteria for determining which organizations count as news outlets include identifying whether an outlet is designated as a Qualified Canadian journalism organization or QCJO under the Income Tax Act.

Suppose the media organization does not tick that box. In that case, they can still qualify if they employ two or more journalists in Canada, if they operate in Canada, if they are engaged in the production of news content, and if they are not significantly engaged in producing content that promotes its interests or reports on the activities of an organization.

Private and public broadcasters who produce and publish original news content online can qualify to get some of the social media giant's revenue.

That means that CBC, which received more than $1 billion from the government in 2019 to 2020 fiscal year, could also benefit from the new law.

According to the Canadian government, around 450 private news outlets shut their doors in 2021 as Google and Facebook hoover up 80% of online ad revenues.

If the bill becomes law, the social media platforms will have six months to strike a deal with the news outlets or apply to the CRTC for an exemption from the legislation.

The CRTC will publish its decision on whether to grant these exemptions and whether the deals privately struck between the social media giants and news outlets meet its standards within 2022, the senior government officials said.

There is a possibility that the bill could eventually lead these social media platforms to favor non-news content, like meme pages that can spread misinformation, on their platforms.

However, the senior officials said that they start from the premise that social media platforms want to make sure the services they offer to the public are inclusive and provide reliable information.

In 2021, TechTimes reported that more than 200 newspaper publications sued Google and Facebook for hogging the ad revenue.

The publications accused the tech giants of unfairly manipulating the advertising market, which has caused damage to their businesses as a whole.

In 2019, Facebook revealed that it plans to pay news outlets through the News Tab feature.

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Written by Sophie Webster