Canadian Government & Corporations Pull Meta Ad Dollars In Row Over News Payments

Deauville, France - MAY 26, 2011 : Facebook CEO Mark Zuckerberg participates to a conference about web technologies during the french G8 in the north of France with the Google CEO Eric Schmidt, Hiroshi Mikitani, founder of Rakuten, the Businessman in advertising Maurice Levy and the Orange CEO Eric Richard.
Tom Fogden
By Tom Fogden
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The Canadian government and some of the country’s major corporations have suspended all advertising on Facebook and Instagram following Meta’s decision to block access to news links in the region.

(Lead image: Meta CEO Mark Zuckerberg)

Meta’s drastic decision to block access to news follows a row between the company and the country over payments to news providers — akin to the brouhaha over the News Media Bargaining Code that has proved controversial with the big tech firms.

Canada’s heritage minister Pablo Rodriguez made the announcement on Twitter (remember that platform?) and said that Meta’s decision to block news was “unreasonable, irresponsible.

“We’re calling on both platforms to stay at the table, work through the regulatory process with us, contribute their fair share and keep news on their platforms,” he said.

“The world is watching.”

Rodriguez also said that the Canadian government would be discussing the issue with other countries that are facing similar issues with the big tech platforms and compensation for news.

The Canadian government spent CA$11.4 million (AU$12.88 million) on Facebook advertising between 2021 and last year, according to an annual report. However, Canada’s government estimates that Google and Facebook together would pay CA$329.2 million (AU$372 million) to news publishers as a result of the legislation.

Telecom and media firm Quebecor said that it would also pull its ads from Facebook and Instagram in an act of solidarity with the government. CBC/Radio-Canada would also pull its advertising from Meta.

A Meta spokesperson said that Canada’s Online News Act was “flawed legislation” and did not take into account how the company’s platforms work.

“Meta does not proactively collect links to news content to display on our platforms; instead, publishers actively choose to post on Facebook and Instagram because it benefits them to do so. Unfortunately, the regulatory process is not equipped to make changes to the fundamental features of the legislation that have always been problematic, and so we plan to comply by ending news availability in Canada in the coming weeks,” they added.

Canada’s bill was directly modelled after our own News Media Bargaining Code and legislators in Brazil and California, as well as the US federal government, are said to be mulling similar legislative efforts.

In its most recent review of the Code, the Australian Treasury said that it had been a “success to date” and is recommended adding TikTok, YouTube, Instagram, Snapchat, and Twitter to the code along with Meta and Google.

It also added that the 30-odd commercial agreements signed between Google, Meta and large publishers would have been unlikely to happen without the code.

Meta’s reluctance to sign deals with Canadian publishers is understandable — no business wants to hand over money necessarily. The government’s decision to lay down a gauntlet and pull its advertising is unprecedented.

However, given that the deals could end up costing Meta far more than they make from the Canadian government’s ad dollars, an agreement might be some way off.

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