Canada’s Online News Act Takes Effect Amidst Tech Giant Resistance

Canada’s groundbreaking Online News Act, officially known as Bill C-18, has come into force, compelling tech giants to pay news outlets for their content. This legislation, hailed by some as a crucial step toward financial support for the struggling journalism industry, has triggered a significant dispute with Meta, the parent company of Facebook and Instagram.

The law, which sets a permanent framework for compelling financial contributions from tech companies to the journalism sector, has faced resistance from Meta and Google, the only two entities large enough to be impacted by its provisions. As a response to the law, Meta blocked access to news on Facebook and Instagram for Canadians over the summer.

While Google engaged in negotiations with the Canadian government, resulting in a deal worth C$100 million annually to Canadian news outlets, Meta remains at an impasse. Prime Minister Justin Trudeau, addressing the ongoing resistance from Meta, stated, “We will continue to push Meta, that makes billions of dollars in profits, even though it is refusing to invest in the journalistic rigour and stability of the media.”

The Online News Act applies to companies operating social media platforms or search engine websites in Canada, with a total global revenue exceeding C$1 billion and a monthly average of 20 million Canadian visitors or active users.

• Revenue Sharing: Tech companies must reach financial agreements with individual news outlets or a single agreement distributing funds among multiple news organisations.
• Distribution of Funds: The agreement with Google designates up to 30% of the funds for broadcasters, with 7% allocated to the CBC, Canada’s public broadcaster. The majority of the money is directed toward print and online media, based on the number of full-time employees.

News outlets in Canada, facing financial struggles due to declining advertising revenues, view the legislation as a positive step. Paul Deegan, President of News Media Canada, emphasised the durability, fairness, and predictability of the framework.

However, critics argue that the financial gains for publishers are relatively small, and Meta contends that the legislation misunderstands the functioning of the internet, with little commercial gain from news content.

The dispute with Meta has led to a ban on news access for Canadians on Facebook and Instagram, causing significant harm to Canadian news outlets. A recent study found a 90% drop in views of Canadian news on Facebook after the ban’s introduction, impacting local news outlets the most.

Despite the challenges, Paul Deegan believes that the Meta news ban has not only been painful for Canadian news outlets but also damages Meta’s brand in the long run. The federal government, along with other entities, has withdrawn advertising from Facebook and Instagram in response to the ongoing dispute.

Kiki Garba

Follow us on: