Canadian Government Halts Advertising On Facebook, Instagram

The Canadian federal government has escalated its showdown with big name tech firms, by halting advertising on Facebook and Instagram.

At a press conference on Wednesday, Minister of Heritage Pablo Rodriguez confirmed that the federal government will pull all its advertising from Facebook and Instagram.

The retaliation by the Canadian government comes after both Meta and Google confirmed they would end access to news on their respective platforms for all users in Canada.

Online News Act

Meta and Google had taken the decision after the Canadian parliament passed the Online News Act, or Bill C-18 to “establish a new legislative and regulatory framework to ensure fairness in the Canadian digital news marketplace…by ensuring that news media and journalists receive fair compensation for their work.”

The Online News Act became law after receiving royal assent from the governor general but has yet to take affect. The bill essentially lays out rules requiring platforms such as Meta and Google to negotiate commercial deals and pay news publishers for their content.

Meta and Google have opposed C-18 right from the start, and Meta called the law “fundamentally flawed legislation that ignores the realities of how our platforms work.”

Google meanwhile said Canada’s Online News Act “remains unworkable” and was much broader than similar legislation passed in Australia back in 2021.

As a result Google said it would remove links to Canadian news from its Search, News and Discover products in Canada, when the law takes effect in about six months time.

Even more damaging for local news publishers is that Google said the Online News Act made it “untenable for us to continue offering our Google News Showcase product in Canada.” This delivers much needed revenues to local publishers.

The tech showdown with Canada is due to the high stake nature of these types of laws.

Meta for example has already warned officials in its home state of California, over its proposed legislation known as Assembly Bill 886, or the California Journalism Preservation Act, which would require social media platforms to pay a monthly “journalism usage fee” for work appears on their services.

That bill would determine a fee via an arbitration process – based on the social media platform’s monthly ad revenue.

Advertising pulled

The Canadian government is not backing down on its law, despite the example from Australia, where a compromise was reached.

The Australian government had agreed to change parts of its ‘media bargaining law’ after Facebook pulled all local and international news on its platforms (including Instagram) in Australia.

Now according to the BBC, Canadian officials said on Wednesday that they stand by the law and will not be “intimidated” by Meta.

But Canadian officials said they are hopeful they can successfully negotiate a deal with Google’s parent company Alphabet that will prevent the block from going ahead.

“Google’s concerns can be met by what we plan to do in the (law’s) regulations,” Minister of Heritage Pablo Rodriguez reportedly said at the news conference on Wednesday.

On the other hand, Rodriguez said Meta has not been engaging with the government in the same way on a path forward.

“Meta are not talking to us,” he was quoted by the BBC as saying, adding Meta’s decision to block news for Canadians is “unreasonable and irresponsible.”

Rodriguez estimates that Canada’s decision to pull all advertising on Meta’s platform will cost the tech giant C$10m ($7.54m; £5.93m) in business – hardly a huge amount of money considering Meta’s annual revenue in 2022 was over $116bn.

But Rodriguez reportedly said Canada is determined to send a message that it will not be intimidated.

According to the BBC, he added he hopes it will inspire others, including Canadian companies, to do the same. Canadian media firms Quebecor and Cogeco have already stated they will be pulling advertisements from Meta.