Why did Meta block Canada’s access to news reports?

Is Canada’s Online News Act a necessary measure to balance the power between tech giants and news publishers? Are Meta and Google truly benefiting publishers amidst the content blockade?

Updated - August 07, 2023 06:06 pm IST

Published - August 07, 2023 08:30 am IST

Meta announced that it will block users in Canada from posting and accessing news reports on its Facebook and Instagram platforms after Canada’s Online News Act came into effect on July 22.

Meta announced that it will block users in Canada from posting and accessing news reports on its Facebook and Instagram platforms after Canada’s Online News Act came into effect on July 22. | Photo Credit: Reuters

The story so far: On August 1, Meta announced that it will block users in Canada from posting and accessing news reports on its Facebook and Instagram platforms. This is after Canada’s Online News Act came into effect on July 22, stipulating that large digital players such as Meta and Google should pay news publishers for content that is made available on their platforms. Meta’s spokesperson said the law was “based on a fundamentally flawed premise,” and, that “the only way we can reasonably comply is to end news availability in Canada.” Google has added that it “will have to remove links to Canadian news from our Search” in Canada.

What is the Online News Act?

In the words of the Canadian government itself, the legislation “requires that digital platforms that make news available and have a strategic market dominance bargain fairly, and in good faith, with Canadian news businesses for the use of their news content on their services.”

Essentially, Google and Meta will have to, under government oversight, enter into compensation agreements with authorised news publishers in Canada. The law states that there will be a minimum contribution that the platforms need to make, based on their revenue in Canada. The bargaining process will be overseen by the Canadian Radio-television and Telecommunications Commission, a government body. The law also has language which seems to say the government can restrict how digital platforms treat news items or topics, such as algorithmically promoting or downplaying them.

Explained | Why is Facebook threatening to block news in Canada?

Why such an Act?

In 2021, Australia passed the News Media and Digital Platforms Mandatory Bargaining Code, which became the blueprint for the Canadian law and similar laws being considered in Europe and many other countries. This legislative activity is a reaction to the “asymmetric interdependence” that has developed between a few large digital platforms and news publishers, who rely heavily on the former to send readers, and consequently revenue, their way. However, for digital behemoths such as Meta and Google, news in its regulated form does not form a big or monetarily valuable chunk of content -- giving them the upper hand at any negotiation table.

This unhappy relationship developed in advanced economies over the last decade as readers and advertisers moved online and revenue from printed publications fell off a cliff. Thousands of newspapers, particularly small ones that play crucial local roles, started shutting shop across Europe and North America. Only a few, large news publishers have been able to establish a viable presence in the online sphere, where the flow of traffic as well as money is heavily controlled by Google and Meta. Together, these two account for over half of all online advertisement revenue; and a massive chunk of the time that people spend online. News publishers argue that while Google and Meta provide large channels for content distribution, they also sequester a disproportional chunk of the advertisement revenue generated by the content; the publishers, meanwhile, are burdened with the cost of creating the content.

The Australian and Canadian laws seek to level this playing field by forcing a negotiation and setting the terms. (Critics of the Australian law have argued that it benefits only large media organisations like Rupert Murdoch’s NewsCorp.) In India, organisations such as the Digital News Publishers Association have been pursuing similar legislation and recently the Ministry of Information and Broadcasting said in a statement that, “For the growth of the news industry, it is important that the digital news platforms […] get a fair share of the revenue from the Big Tech platforms.”

These legislative attempts to support public interest journalism also form part of a global “techlash” -- attempts to curb the powers that large tech companies have developed in many spheres including markets, personal data, politics and society.

How have the platforms responded?

In February 2021, Facebook blocked users in Australia from posting links to news for a few days in response to the impending mandatory bargaining code. However, it restored access after talks with the government. Since then, both Facebook and Google have struck deals with many Australian publishers on revenue sharing. In some estimates, the law has established an annual flow of 200 million Australian dollars from digital platforms to publishers.

Despite this precedent, Facebook has taken a strong stance on the Canadian law and shows no signs of budging. Both Google and Facebook argue that they are net benefactors for publishers, sending traffic and revenue to the sites.

The pressing concern now is that if Facebook continues to ban journalistic content from authoritative news publishers, and Google also starts blocking content, the Canadian reader will be left with only questionable sources on these widely used platforms.

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