What is the Reason Behind Facebook and Instagram Cutting Off News in Canada?
Meta Platforms intends to block Canadian users from accessing news content on Facebook and Instagram following the implementation of a new law that mandates internet giants to compensate news publishers. The company’s rationale is that news holds no economic significance for them and that their users do not utilize the platform for news consumption.
Canada drafted the new rules after legacy media companies complained about Internet companies pushing news companies out of the online advertising market.
WHY ARE TECHNOLOGY COMPANIES AGAINST THE LAW?
The Canadian Parliament passed Bill C-18 into law, which obliges Internet giants to pay news publishers.
The Online News Act forces platforms like Facebook and Alphabet’s Google to negotiate commercial deals and pay news publishers for their content.
Both Meta and Google had warned that they would block access to news articles on their platforms in Canada if the bill passed without changes. Facebook says that links to news articles make up less than 3% of the content in its users’ feeds, and that journalists benefit from publishing their work on social media.
Google has argued that the Canadian law is broader than laws in Australia and Europe, putting a price on news links appearing in search results, and can be applied to outlets that don’t produce news.
Google proposed that the bill be revised so that the payment basis would be the display of news content instead of links and specify that only companies that produce news and adhere to journalistic standards can receive payments.
WHAT HAPPENED WHEN SIMILAR RULES WERE POSTED IN AUSTRALIA?
Google and Facebook had also threatened to scale back their services after Australia became the first country to enact similar laws in 2021. Both eventually struck deals with Australian media companies following the law changes.
During the battle, Facebook blacked out Australia’s news pages, only restoring them after the government made concessions.
Yet in the year since the law came into effect, Meta and Google have paid about A$200 million ($134 million) annually to Australian news agencies, according to a report by the former chairman of the Australian Competition Authority.
WHAT COULD THE GLOBAL IMPACT BE?
Lawmakers in Meta’s home state of California and the U.S. Congress are pushing for similar rules. Meta says it gets 40 percent of its revenue, which was $117 billion last year, from the United States and lists Australia and Canada among its most important markets. If Meta doesn’t get exemptions or get the rules changed in Canada, the tech giant could face a similar fate in the United States.
In 2022, US lawmakers released a revised version of a bill aimed at making it easier for news organizations to negotiate jointly with platforms like Google and Facebook.
The New Zealand government announced in 2022 that it would introduce legislation that would require major online digital companies to pay New Zealand media companies for local news content that appears in their feeds.
