Canadian government to stop buying Meta platform ads amid dispute

Heritage Minister Pablo Rodriguez has announced on Wednesday that the Canadian government will stop buying ads on Meta platforms Facebook and Instagram, amid an ongoing dispute over a new law.

The Online News Act, or Bill C-18, was passed into law last month, which would compel tech companies like Meta and Google owner Alphabet to pay online news publishers.

In response, Meta and Alphabet have both said they would end news access on their platforms in Canada.

“Canada is going to continue to stand firm and ensure that, if social media platforms and internet giants want to use media, that they actually ensure that they’re paying their fair share for it,” Prime Minister Justin Trudeau said in Monteregie, Quebec.

The government is still finalising the rules that would require the platforms to share some advertising revenue when the law is implemented by the end of this year.

Nevertheless, the government sees a path forward to resolving the quarrel and is open to discussions with the platforms, Rodriguez told reporters in Ottawa.

He introduced the bill in 2022. The legislation was drafted after calls from Canada’s media industry for tighter regulation of internet giants to allow news businesses to recoup financial losses suffered in the years that Facebook and Google gained a greater share of the online advertising market.

Rodriguez said that 80 percent of all advertisement revenue in Canada — or almost 10 billion Canadian dollars ($7.5bn) in 2022 — went to Google and Facebook, and the Liberal government wants the two platforms to contribute to domestic journalism.

The decision to suspend government ads will cost Facebook and Instagram about 10 million Canadian dollars ($7.5m) per year, he said.

Facebook “refused to discuss and they did not want to compensate the media accordingly, and so we’ve decided to suspend advertising”, Rodriguez added, speaking on Wednesday alongside two of the three Canadian opposition parties that also support the legislation.

Meta has previously said that news does not hold economic value for the company and that news organisations benefit from sharing their reports on Facebook.

“Unfortunately, the regulatory process is not equipped to make changes to the fundamental features of the legislation that have always been problematic,” a Meta spokesman said, adding that the company plans to end news availability in Canada “in the coming weeks”.

Rodriguez sounded more optimistic about reaching a compromise with Google, saying the government was convinced that “what Google is asking at this moment can be done”.

Google, which had proposed amendments to the act that were rejected, said last week that the government’s regulatory process was unlikely to resolve “structural issues with the legislation”. The company did not comment on Wednesday.

The outcome of Canada’s tussle with internet giants can set the tone for other governments trying to regulate internet companies. If the companies fail to secure exemptions or get the rules changed in Canada, they may face a similar fate in the United States.

Democratic US Senator Elizabeth Warren, a leading progressive voice, on Wednesday expressed support for Canada, saying that “leaders are right to stand firm against these tactics and push back against Big Tech’s freeloading off local news”.

Earlier on Wednesday, Canadian telecoms operator Quebecor and Cogeco, which runs radio stations in Quebec, also said they would stop advertising on Facebook and Instagram because of Meta’s opposition to the new law.