• by Karlene Lukovitz  @KLmarketdaily, June 23, 2023

On Thursday, Meta announced that it will make good on its threat to stop sharing news content on Facebook and Instagram in Canada, after the Canadian Senate passed the Online News Act, clearing the way for its implementation.

The law — meant to help news outlets survive in the face of huge losses of advertising revenue to the giant platforms by correcting the competitive “imbalance” — will require platforms including Meta and Google to compensate news outlets for linking to their content.

It will allow publishers and platforms to make “fair commercial deals” without requiring government involvement. There is no preset formula for compensation. Payment terms will be determined by deal negotiations. A mandatory arbitration process will kick in if companies cannot reach a deal on their own.

"Today, we are confirming that news availability will be ended on Facebook and Instagram for all users in Canada prior to the Online News Act (Bill C-18) taking effect," Meta posted on its corporate blog. "We have repeatedly shared that in order to comply with Bill C-18, passed today in Parliament, content from news outlets, including news publishers and broadcasters, will no longer be available to people accessing our platforms in Canada."

“Earlier this month, we announced that we were conducting product tests to help us build an effective product solution to end news availability as a result of C-18. These tests are ongoing and currently impact a small percentage of users in Canada. The changes affecting news content will not otherwise impact Meta’s products and services in Canada. We want to assure the millions of Canadians on our platforms that they will always be able to connect with friends and family, grow their businesses and support their local communities.”

Following its Senate passage, the law also received required royal assent. The Department of Canadian Heritage will now draft regulations for application of the act and provide guidance on implementing it. The law will take about six months to go into effect, according to CBC.

Google has been testing ways to shut down news access in Canada since February, but has not as yet announced an intention to block that content countrywide. As of Thursday afternoon, Google was still in talks with the government.

"We're doing everything we can to avoid an outcome that no one wants,”  Google spokesperson Jenn Crider said in a statement issued following the law’s passage. “Every step of the way, we’ve proposed thoughtful and pragmatic solutions that would have improved the Bill and cleared the path for us to increase our already significant investments in the Canadian news ecosystem. So far, none of our concerns have been addressed. Bill C-18 is about to become law and remains unworkable. We are continuing to urgently seek to work with the government on a path forward."

A spokesperson for Pablo Rodriguez, the Minister of Canadian Heritage Pablo Rodriguez told CBC that his office had meetings with Facebook and Google this week. "If the government can't stand up for Canadians against tech giants, who will?" Rodriguez said in a statement following the law’s passage.

 "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're resorting to bullying tactics to try and get their way,” Canadian Prime Minister Justin Trudeau said earlier this month. “It's not going to work.”

Last year, after Australia pioneered implementation of a law requiring platforms to compensate news organizations, Meta did block news access via its platforms in the country for a time, but lifted the ban after the company and the government struck a deal.

Google threatened to shut down access to its search engine, but instead reached deals with various news organizations through a binding arbitration process.

Australian media companies have been paid more than $190 million since the law went into effect last year, according to the Australian Competition and Consumer Commission, reports CBC.