Canada Stops Buying Ads on Facebook, Instagram Amidst New Law on Paying Online News Publishers

Following the dispute over a new law last month on paying online news publishers that Meta has been vocally opposed to, the Canadian government decided to stop buying advertisements on its platforms.

Stopping Ads on Meta

Canada decided to not continue paying for advertising dollars Meta, following the company's refusal to pay their fair share to online news organizations in the country. According to a report from Bloomberg, this becomes the latest escalation between the government and tech giants required to negotiate commercial deals with local publishers.

This was announced and introduced by Heritage Minister Pablo Rodriguez in Ottawa who said, "They benefit from the fact that there's currently nothing forcing them to contribute to our Canadian news system. That status quo isn't working. All we want, all Canadians want, is for these platforms to contribute their fair share."

As of the moment, the Canadian government is finalizing its rules for platforms to share advertising revenue when the law is implemented by the end of this year. Despite this, the government is not closing its doors and is open to discussion with the platform to resolve the quarrel and make some settlements that will be good for both parties.

Rodriguez added that he knows this will affect platforms as 80% of all ad revenue in Canada went to Facebook and Google, with almost $7.5 billion. With this whole money, the government just wanted the platforms to contribute to journalism by paying online news publishers what they deserve. The latest decision will cost Meta about $7 million annually.

Discussing Settlements

Facebook already refused to discuss this with the government as they did not want to compensate the media accordingly. For Meta, the company believes that news does not hold economic value for the company. Reuters reported that Meta argued that if there is someone benefiting from this, it's the news organization as their reports are shared on the platform.

A Meta spokesperson stated, "Unfortunately, the regulatory process is not equipped to make changes to the fundamental features of the legislation that have always been problematic." In the coming weeks, Meta is expected to end news availability on its platforms, including Facebook and Instagram.

Meanwhile, Rodriguez sees optimism in reaching a compromise with Alphabet's Google. Forbes reported that the government does not plan to pull its advertising because the company has been open to finding a solution. He said that what Google is asking at this moment can be done.

Canadian Parliament Member Peter Julian defended the Canadian law by saying that the reality is tech giants need to recognize and respect the government of Canada. He also added that both need to respect the democracy of the country.

The Online News Act, or Bill C-18 was passed last month by Prime Minister Justin Trudeau in Quebec and said, "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."