U.S. technology company Alphabet (GOOGL) is removing news stories published by Canadian media outlets from its Google search engine in retaliation against the federal government’s Online News Act that has been passed into law.
The federal legislation requires technology companies such as Alphabet to pay Canadian publishers for news content that appears on their sites if it helps them generate money in the form on online advertising revenue.
Calling the Online News Act a “link tax,” Alphabet joins Meta Platforms (META) in announcing plans to remove Canadian news content altogether rather than pay media outlets in this country.
The U.S. tech giants contend that they are doing enough to help Canadian media outlets by driving traffic to their websites through online searches and social media platforms.
Alphabet said that it plans to end existing deals with local Canadian news publishers over the recently passed legislation. The company did not specify when the changes would take place.
However, the blocking of Canadian content will also occur on both Google News and Google Discover and will apply only to Canadian news outlets.
Canadians will still be able to find news produced by international media outlets such as the BBC and The New York Times (NYT) through Google searches.
Meta Platforms announced similar moves last week, saying it will remove news in Canada from its Facebook and Instagram social media sites, and end existing deals with local publishers too.
The Online News Act comes as Canadian media outlets are struggling financially. Since 2008, nearly 500 newsrooms have closed across the country, according to industry data.
Earlier this week, the publishers of The Toronto Star and National Post newspapers announced that they are pursing a planned merger amid declining subscriptions and advertising revenue.
And Bell Media has asked regulators in Ottawa to allow it to end local news coverage at most of its CTV television stations, claiming a lack of profitability.
In contrast, Google and Facebook have a combined 80% share of online advertising revenue in Canada. The two companies earn nearly $10 billion U.S. a year from online ads.
Alphabet’s stock has gained 34% so far this year and trades at $119.10 U.S. per share.
