By Ismail Shakil
OTTAWA (Reuters) -Google said on Thursday it plans to block Canadian news on its platform in Canada, joining Facebook in escalating a campaign against a new law requiring payments to local news publishers.
Alphabet-owned Google (NASDAQ:GOOGL) will remove links to Canadian news from search results and other products in Canada when the law takes effect in about six months.
Facebook-owner Meta Platforms Inc (NASDAQ:META) made a similar announcement last week after the passage of Bill C-18, or the Online News Act.
Canada's media industry has called for tighter regulation of internet giants to allow news businesses to recoup financial losses suffered in the years that Facebook and Google gained a greater share of the online advertising market.
The independent budgetary watchdog in Canada estimated last year that news businesses could receive about C$330 million ($249 million) per year from deals mandated under the legislation.
Heritage Minister Pablo Rodriguez, who introduced the bill last year, has said the platforms have no obligations under the act immediately and that the government was open to consulting with them on the regulatory and implementation process.
Facebook and Google said the proposals were unsustainable for their businesses and for months signaled possibly ending news availability in Canada unless the act was amended.
Canada's federal government has pushed back against suggestions to make changes, and Prime Minister Justin Trudeau in June accused the companies of using "bullying tactics."
"Big tech would rather spend money to change their platforms to block Canadians from accessing good quality and local news instead of paying their fair share to news organizations," Rodriguez said in a statement on Thursday.
"This shows how deeply irresponsible and out of touch they are, especially when they make billions of dollars off of Canadian users."
Google's president of global affairs, Kent Walker, said in a blog post that the law remains unworkable and that the company did not believe regulatory process would be able to resolve "structural issues with the legislation."
"We have now informed the government that when the law takes effect, we unfortunately will have to remove links to Canadian news from our Search, News and Discover products in Canada," Walker said.
The news outlets affected by Google's decision would be based on the government's definition of "eligible news businesses" when rules are finalized for implementation.
Google will also end its News Showcase program in Canada, under which the company has agreements with 150 news publications across the country. Reuters has a contract with Google to produce News Showcase panels, including in Canada.
The law forces online platforms to negotiate with news publishers and pay for their content. A similar law passed in Australia in 2021 prompted threats from Google and Facebook to curtail their services. Both struck deals with Australian media companies after the legislation was amended.
Google has argued Canada's law is broader than those in Australia and Europe, saying it puts a price on news story links displayed in search results and can apply to outlets that do not produce news.
The search engine giant had proposed that the displaying of news content, rather than links, be a basis for payment and that only businesses that produce news according to journalistic standards are eligible.
($1 = 1.3248 Canadian dollars)