Google blinks first in its war with Canada by agreeing to pay $74 million annually for online news after threatening to block it

Alphabet’s Google struck a deal with Canadian Prime Minister Justin Trudeau’s government over a contentious law requiring it to pay for news.

Google agreed to contribute C$100 million ($74 million) in financial support annually, indexed to inflation, for a wide range of news businesses in Canada, Heritage Minister Pascale St-Onge said in a statement Wednesday.

The deal — which came after months of negotiations and strong opposition from both Google and Meta Platforms Inc. — can avert the news block expected next month in Canada on the world’s most popular search engine. 

Trudeau’s Online News Act, also known as Bill C-18, is aimed at trying to force both Meta and Google to pay local publishers for featuring news content on their platforms, an attempt to boost an industry that has suffered from massive losses of advertising revenue.

But both big technology firms are pushing back hard. Meta has already blocked all links to news content in Canada on Facebook and Instagram since August to avoid making payments. Google had earlier threatened to remove news from search results before the law comes into effect on Dec. 19.

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