After Canada enacted legislation mandating internet platforms to compensate local publications, Meta Platforms Inc. declared it will stop news on Facebook and Instagram for all users.
The Online News Act, which won legislative approval Thursday, requires firms like Meta and Alphabet Inc. to pay news organizations for linking to news.
The Trudeau government has increased IT industry regulation.
This bill, another that siphons streaming service profits into local funds to support Canadian artists, and planned legislation to address harmful online content make Canada a likely battleground for tech companies trying to set an example for other jurisdictions considering sector regulations.
Meta briefly blocked Australian news articles and links in 2021 due to similar restrictions.
Canada will clash with digital titans after the law’s approval. Google and Meta blocked news content for a tiny number of users, with Meta threatening to “end the availability of news content in Canada permanently following the passage.”
Meta stated Thursday that it will carry out its threat. Google spokesman Shay Purdy said via email that the firm is “doing everything we can to avoid an outcome that no one wants” and “continuing to urgently seek to work with the government on a path forward.”
The law will give Canadian media, which lost 450 outlets between 2008 and 2021, some advertising money, according to the government. Tech firms warned they would be obliged to pay for information with no economic value, and critics suggested the plan might make media dependent on tech company funding.
The bill’s passing was praised by a Canadian news media association as a first step toward addressing the market power imbalance between publishers and platforms. “Real journalism, created by real journalists, continues to be demanded by Canadians and is vital to our democracy, but it costs real money,” said News Media Canada president and CEO Paul Deegan.
Columbia University journalism professor Bill Grueskin, who researched the Australian law, predicted that Canadian tech giant-news outlet arrangements might raise C$300 million ($228 million) yearly.