Canada’s parliament passed a law requiring tech companies to pay domestic news outlets for linking to their articles, prompting the owner of Facebook and Instagram to say it would pull news articles from both platforms in the country.
The law, passed Thursday, is the latest salvo in an effort by governments around the world to force big companies like Google and Facebook to pay for news they share on their platforms — a campaign the companies have rallied against at virtually every turned corner.
With a caveat, the new Canadian law would force search engines and social media companies into a negotiation process — and if necessary binding arbitration — for licensing news content for their use.
The law, the Online News Act, is modeled on a similar law that was passed in Australia two years ago. It is designed to “increase fairness in the Canadian digital news market and contribute to its sustainability,” according to an official summary. It was not immediately clear when the law would come into effect on Friday morning.
Proponents of the legislation see it as a victory for the news media as it fights to make up for declining ad revenues it attributes to Silicon Valley companies cornering the online advertising market.
“A strong, independent and free press is fundamental to our democracy,” said Pablo Rodriguez, Canadian minister in Prime Minister Justin Trudeau’s government. wrote on Twitter late Thursday. “The Online News Act will ensure that tech giants make fair and equitable deals with news organizations.”
Tech companies think differently.
Meta, which owns Facebook and Instagram, had previously warned lawmakers it would stop making news available on both platforms to Canadian users if the legislation passes. The company said it now plans to do just that.
“We have repeatedly shared that in order to comply with Bill C-18 passed in Parliament today, content from news outlets, including news publishers and broadcasters, will no longer be available to people who access our platforms in Canada,” said Meta in a position.
It added that the changes affecting news content would not affect other products and services used for fact-checking, social connections and business growth.
In a separate statement, a Google spokeswoman criticized the legislation as “unworkable” and said the company had proposed “thoughtful and pragmatic solutions” to improve it.
Google told Canadian lawmakers in May that debate over the legislation had raised unrealistic expectations among politicians and news publishers of “an unrestricted subsidy for Canadian media”. Among other changes, Google proposed requiring technology companies to pay for “displaying” news content, not linking to it.
“So far, none of our concerns have been addressed,” Google spokeswoman Jenn Crider said in the statement Thursday. She did not say what the company planned to do about the law and declined to comment further on the file.
Similar battles have been going on for years in other countries.
In the European Union, countries have been trying to enforce a copyright directive the bloc passed in 2019 to force Google, Facebook and other platforms to compensate news organizations for their content.
In Australia, parliament passed a law in 2021 forcing Google and Facebook to pay for news content appearing on their platforms. At the time, Google seemed to effectively capitulate by announcing a three-year global agreement with News Corp to pay for the publisher’s news content. Facebook took the opposite direction, saying it would immediately ban people and publishers from sharing or viewing news links in Australia.
And in the United States, the Justice Department and a group of eight states sued Google in January, accusing it of illegally abusing its monopoly on the technology that powers online advertising. The lawsuit was the department’s first antitrust suit against a technology giant under President Biden.
California also threatens to put legal pressure on tech companies. This month, the State Assembly voted to send a bill to the Senate that would tax tech companies for distributing news articles. meta said in response that it would be “forced” to remove news from Facebook and Instagram if the bill became law.
This month, Canadian Prime Minister Trudeau suggested he was not open to compromise with tech companies over the Online News Act.
“The fact that these internet giants would rather deny Canadians access to local news than pay their fair share is a real problem, and now they are resorting to intimidation tactics to get their way,” he told reporters. “It’s not going to work.”
Michael Geist, a law professor at the University of Ottawa who specializes in regulations governing the Internet and e-commerce, has said the efforts could backfire.
“It will disproportionately harm smaller and independent media outlets and leave the field to lower quality sources,” Professor Geist said. “Worst of all, it was completely predictable and avoidable.”
