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Meta, the parent company of Facebook and Instagram, has refused to comply with a new law proposed by Canadian Prime Minister Justin Trudeau, which would require the social media giant to compensate news providers for their content shared on Facebook, according to Bloomberg.
This legislation is part of the Canadian government’s efforts to ensure that tech giants, not just Facebook, compensate news organizations for their content featured on their platforms. It follows an extensive campaign by the government to compel social media giants to pay news outlets for their content.
The law dictates that both Meta and Alphabet Inc., Google’s parent company, must allocate a minimum of 4% of their annual revenues generated within Canada to news outlets in exchange for featuring links to news articles.
Based on government estimates, this regulation would require Google to contribute approximately C$172 million (equivalent to $127 million USD) annually to support the news industry in Canada, while Facebook, owned by Meta, would have to disburse C$62 million per annum.
In a clear stance against government pressure, Meta initiated the blocking of news content from Facebook users in Canada back in August, effectively cutting off a significant source of web traffic for numerous news companies.
Meta has maintained its intention to persist in blocking Canadian users from accessing news stories on its platform.
This move represents a substantial shift in the landscape for social media companies in Canada and their business models. It also positions Prime Minister Trudeau as a leader dedicated to defending a free press and ensuring the sustainability of news media in the digital advertising era, where Google and Facebook have become some of the world’s most valuable companies.
This new legislation would have amended the original Online News Act, which tech companies had protested would expose them to unknown financial liabilities. Under the Online News Act, news media companies, some of them powerful entities, would have been required to negotiate individually with social media companies on compensation for their news content on the platforms.
Meta has already voiced its opposition to the new 4% annual revenue law, asserting that it makes no meaningful difference from the prior bill.
Rachel Curran, head of public policy for Meta in Canada, explained, “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.”
Prime Minister Trudeau now faces the challenge of dealing with other influential social media companies that have also threatened to sever news links in Canada.
Alphabet has indicated that it is contemplating discontinuing Google News links in Canada. Such a move would dramatically change how news is consumed in the country, particularly at a time when misinformation and disinformation are on the rise worldwide.
Canadian government authorities have stated that the regulatory framework was not communicated to the corporations prior to Friday’s announcement. They now intend to engage in discussions with these corporate entities in the coming weeks.
Heritage Minister Pascale St-Onge emphasized the need for tech companies to act responsibly and compensate for news content on their platforms, saying, “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.”
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