No news is bad news for Meta, since the Canadian leadership announced on Wednesday it’s suspending all government advertising on Facebook and Instagram.
The dispute arises over Meta’s refusal to share ad revenue with Canadian news agencies who patronize the social media platforms. “We cannot continue paying advertising dollars to Meta while they refuse to pay their fair share to Canadian news organizations,” said Canada’s Heritage Minister, Pablo Rodriguez.
Things heated up when Canada passed the Online News Act known as Bill C-18, last month, requiring tech platforms to share part of the ad profits from Canadian news organizations. The law is set to take effect at the end of 2023.
The Online News Act alleges that Meta and Google currently garner 80% of all digital advertising revenue in Canada, ad dollars that Rodriguez says “used to be spent on Canadian news outlets who report on local and regional news.”
Meta and Google answered back by blocking Canadian news on their social networks in protest of the law requiring the tech platforms to compensate publishers for linking to their content.
The pullback will result in approximately $7.5 million lost annually which the Canadian government previously spent on Facebook and Instagram. Meta hasn’t officially commented, but hinted that the Canadian news outlets don’t represent a large economic value for them, and held the Canadian news organizations receive a benefit from publicity they receive on Facebook and Instagram.
Rodriguez shared his belief that negotiation and compromise is still on the horizon. Canadian Prime Minister, Trudeau, however, made his stance clear in an interview on Wednesday. “This is not just a dispute over advertising, it’s a dispute over democracy, and…goes to the core of a free and informed society,” he said, adding that Canada is not backing down.
The question remains whether Facebook and Instagram will reach an amicable solution with the Canadian government before the law takes effect by year end. Will negotiations clear a way to end the standoff? Should Meta be held accountable for sharing ad revenue? Read more here.