Alphabet Inc.’s (NASDAQ:GOOGL) (NASDAQ:GOOG) subsidiary Google has averted a potential news block in Canada by agreeing to an annual payment of $74 million to the Canadian news sector.

What Happened: Google and the Canadian government have come to terms regarding a disputed law necessitating payment from digital platforms for news content. 

The tech giant has agreed to contribute C$100 million ($74 million), indexed to inflation, to support assorted news businesses across Canada, reported Bloomberg. 

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Following an extended negotiation period and considerable opposition from Google and Meta Platforms Inc. (NASDAQ:META), this deal eliminates the possibility of a news block on Google’s search engine in Canada, which was set to become effective next month. 

However, news content continues to remain inaccessible on Mark Zuckerberg’s Meta Platforms Inc.-owned (NASDAQ:META) Facebook and Instagram platforms in Canada.

This agreement marks a win for Prime Minister Justin Trudeau’s Online News Act, also known as Bill C-18, which seeks to force Meta and Google to pay local publishers to feature their news content on their platforms.

Kent Walker, Google’s president of Global Affairs, has expressed satisfaction with the Canadian government’s commitment to address Google’s main concerns with Bill C-18. He confirmed that Google would continue driving traffic to Canadian publishers. 

Why It Matters: The conflict began with the introduction of the Online News Act, which compels platforms like Facebook and Google to negotiate commercial deals with Canadian news publishers for their content. 

In response, Meta blocked news access on its social media platforms to all users in Canada. 

During the devastating wildfires in Canada, Trudeau criticized Meta’s decision to restrict news access. At the time, the Canadian government demanded that Meta lift its ban on domestic news on its platforms.

With Google’s agreement to support the Canadian news sector, it appears that a resolution may be on the horizon, although Meta’s stance remains unchanged.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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