The Canadian government will stop buying ads on Facebook and Instagram, Heritage Minister Pablo Rodriguez stated on Wednesday, as a fight with tech titans over a new media compensation law heated up.
The Online News Act, passed by parliament last month, forces digital behemoths such as Google and Meta to enter into commercial agreements to reimburse Canadian news sources when readers view stories via their products, or face binding arbitration.
Soon after the bill was approved, Meta, the parent company of Facebook and Instagram, said that it will take steps to ban Canadian news for users on its services in the country.
Rodriguez described those actions on Wednesday as “unreasonable” and “irresponsible.”
“This is why today we are announcing that the government of Canada will be suspending its advertising on Facebook and Instagram,” he said, estimating the cost to Facebook and Instagram at around Can$10 million (US$7.5 million) a year.
Google has also announced it will take similar actions to resist the law.
The two companies, who dominate online advertising, have been accused of draining cash away from traditional news organizations while using their content for free.
“Canadians are not going to be intimidated by American billionaires who want to undermine our democracy,” said Prime Minister Justin Trudeau, adding that his government would not back down from its decision.
Since 2008, more than 450 Canadian media outlets have closed their doors, according to the Department of Canadian Heritage.
According to an October 2022 study by Canada’s parliamentary budget inspector, the Online News Act will result in Canadian newspapers receiving approximately Can$330 million per year from digital platforms.
Canada’s measure is modeled after Australia’s New Media Bargaining Code, a world first that required Google and Meta to pay for news material on their platforms.
California lawmakers are attempting to pass a similar measure.
At the end of 2021, AFP inked a five-year “neighboring rights” arrangement with Google under which the internet giant will pay for content from the news agency.
It also entered into two business agreements with the platform.
