Meta, Facebook and Instagram parent company said it will not accept the terms of a new law by Canadian Prime Minister, Justin Trudeau. The law would compel the social media giant to pay news providers for their news content on Facebook, Bloomberg reports.
The law by the prime minister is aimed at compelling the tech giants to compensate news organizations for their content and not just Facebook. It comes after a long campaign by the government to make social media giants pay news organisations for their content on its platform.
The legislation stipulates that both Meta and Alphabet Inc., the parent company of Google, must remit a minimum of 4% of their annual revenues generated within Canada to news outlets in exchange for featuring links to news articles.
By government estimates, this mandates Alphabet’s Google to contribute approximately C$172 million (equivalent to $127 million USD) annually to support the news industry in Canada, while Meta’s Facebook is tasked with disbursing C$62 million per annum.
Sending a clear message that it will not collapse under the pressure from the government, in August Meta started blocking news content from Facebook users in Canada, cutting off an important source of web traffic for a number of news companies.
Meta has already unequivocally declared its intention to persist in blocking Canadian users from accessing news stories on its platform.
The move significantly changes the game for social media companies in the country and their business model. In the same breath, it positions the prime minister as a leader who will defend the free press and the sustainability of the work of the news media in the age of digital advertising, which has made Google and Facebook some of the most valuable companies in the world.
This new regulation would have cushioned the initial law known as the Online News Act, which the tech companies have protested will expose them to unknown financial liabilities. Under the Online News Act, news media companies, some of them very powerful, would have had to negotiate individually with these social media companies on how they would be compensated for their news content on the social media platforms.
Read also: Meta to stop sharing news content on Facebook and Instagram for Canadian users
A spokesperson for Meta has already pushed back against this new 4% in annual revenue law, arguing that it makes no difference from the previous bill.
“As the legislation is based on the incorrect assertion that Meta benefits unfairly from the news content shared on our platforms, today’s proposed regulations will not impact our business decision to end news availability in Canada,” Rachel Curran, head of public policy for Meta in Canada, said by email.
The Canadian prime minister will also now have to deal with other powerful social media companies that have threatened to cut off news links in Canada.
Alphabet has said that it is considering cutting off Google News links in Canada. If Google news links are cut off in Canada, it will immediately upend the way news has been consumed in the country since Google launched in 1998, especially at a time when misinformation and disinformation have been on the rise across the world.
Government authorities in Canada have said that the regulatory framework had not been communicated to the corporations prior to Friday’s announcement, and they now aim to initiate dialogues with these corporate entities in the weeks ahead.
Heritage Minister, Pascale St-Onge said that tech companies have to act responsibly and pay for news content on their platform.
“Canadians rely on digital platforms to access their news and information, but these tech platforms have to act responsibly and support the news sharing they and Canadians both benefit from,” Heritage Minister Pascale St-Onge said in a news release.
The law is expected to come into effect on Dec. 19.
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