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Proposed Canadian law would force Facebook and Google to pay mainstream media outlets $329.2M per year

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A report from Canada’s Officer of the Parliamentary Budget Officer (PBO) estimated that Facebook and Google would be forced to pay mainstream news publishers CA$329.2 million annually if the Online News Act passes.

We obtained a copy of the report for you here.

The bill is currently in the House of Commons and is expected to pass before the end of the year or in 2023. The legislation would require Facebook and Google to negotiate “fair commercial deals” with news businesses in Canada.

“The PBO estimates that the Online News Act would provide about $329.2m per annum to news businesses across Canada,” it said.

“It also estimates that news businesses would spend about $20.8m in transaction and compliance costs to conclude their first deals.

“It would be more expensive for smaller businesses to negotiate and comply with the legislation because most would need to hire external expertise, while for large companies, internal capacity likely already exists.”

Australia has a similar law, called the News Media Bargaining Code, that has resulted in Facebook and Google paying news organizations AU$200 million per year.

Facebook said that the legislation fails to recognize “value exchange runs in favor of publishers and misrepresents the relationship between our platforms and publishers who choose to post news to reach subscribers and monetize their content.”

Google said that the estimate by the PBO “appears to be grounded in a set of assumptions and talking points, with no basis in the legislation itself, the facts of the news industry, the realities of digital advertising or our current value exchange with news publishers.”

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