The Canadian parliament has passed a law that will require tech companies to pay national news outlets to link 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 on Thursday, is the latest salvo in an attempt by governments around the world to force big companies like Google and Facebook to pay for the news they share on their platforms, a campaign the companies are joining. They have resisted practically at all times.
With some caveats, the new Canadian law would force search engines and social media companies to engage in a process of negotiation, and binding arbitration, if necessary, to license news content for their use.
The law, the Online News Act, was inspired by a similar one passed in Australia two years ago. It was designed to “improve fairness in the Canadian digital news market and contribute to its sustainability,” according to a official summary. Exactly when the law would take effect was not immediately clear until Friday morning.
Supporters of the legislation see it as a victory for the media as it struggles to offset the plummeting ad revenue it attributes to Silicon Valley companies cornering the online advertising market.
“A strong, independent and free press is fundamental to our democracy,” Pablo Rodríguez, Canadian heritage minister in the government of Prime Minister Justin Trudeau, wrote on Twitter Thursday night. “The Online News Act will help ensure that tech giants negotiate fair and equitable deals with news organizations.”
Tech companies feel differently.
Meta, which owns Facebook and Instagram, had previously warned to lawmakers that it would stop making news available on both platforms to Canadian users if the legislation passes. The company said on Thursday that it now planned to do just that, The Associated Press reported. Representatives for Meta, Facebook and Instagram did not immediately respond to requests for comment.
In a separate statement, a Google spokeswoman criticized the legislation as “impracticable” and said the company had proposed “thoughtful and pragmatic solutions” to improve it.
Google told Canadian lawmakers By May, that debate over legislation had created unrealistic expectations among politicians and news publishers for “an unlimited subsidy for Canadian media.” Among other changes, Google suggested requiring technology companies to pay to “display” news content, not link to it.
“So far, none of our concerns have been addressed,” Google spokeswoman Jenn Crider said in Thursday’s statement. She did not say what the company planned to do about the law and declined to comment further on the record.
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 adopted in 2019 to force Google, Facebook and other platforms to compensate news organizations for their content.
In Australia, parliament passed a law in 2021 requiring Google and Facebook to pay for news content that appears on their platforms. At the time, Google appeared to effectively capitulate by announcing a three-year global deal with Rupert Murdoch’s News Corp to pay for the publisher’s news content. Facebook went the opposite way, saying it would immediately restrict 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 the company of illegally abusing its monopoly over the technology that powers online advertising. The lawsuit was the department’s first antitrust lawsuit against a tech giant under a Biden presidency.
California is also threatening legal pressure on tech companies. This month, the State Assembly voted to advance a bill to the State Senate that tax technology companies to distribute news articles. Goal saying in response that he would be “forced” to remove news from Facebook and Instagram if the bill were to become law.
This month, Mr Trudeau, the Canadian prime minister, suggested that he was unwilling to compromise with tech companies on the Online News Act.
“The fact that these internet giants would rather cut off Canadians’ access to local news than pay their fair share is a real problem, and now they are resorting to scare tactics to try to get their way.” told reporters. “It will not work”.
Michael Geist, a University of Ottawa law professor who specializes in regulations governing the Internet and electronic commerce, has said the efforts could backfire.
“It will disproportionately hurt smaller, independent media outlets and leave the field to lesser quality sources,” Professor Geist said. “Worst of all: it was totally predictable and avoidable.”