I am here to share the latest developments in the tech world. Today’s news revolves around Meta, the parent company of Facebook and Instagram, as it takes a stand against Canadian legislation.
In response to the Online News Act passed by the Canadian Parliament, which aims to establish “fair revenue sharing” between tech platforms and news publishers, Meta has begun blocking Canadian access to links and stories from news outlets reported by TechCrunch. The act would require Meta to pay publishers for the right to distribute and profit from their content.
Today we've begun the process of ending news availability in Canada. Changes will roll out over a few weeks.
— Andy Stone (@andymstone) August 1, 2023
As we've always said, the law is based on a fundamentally flawed premise. And, regrettably, the only way we can reasonably comply is to end news availability in Canada. https://t.co/OtpxOW1eUp
As the law forces tech platforms into negotiations with publishers, mandatory arbitration becomes a “last resort” if agreements cannot be reached. Meta’s decision to block news availability in Canada is seen as a direct response to what it perceives as a flawed premise of the law.
Google also plans to follow suit by implementing its own news blackout in search results in response to the same legislation.
The Online News Act seeks to support the declining news industry, which has faced challenges due to shifts in advertising trends favoring online platforms. For years, tech companies have benefited from publishers’ content without compensating them adequately, leading to a decline in the news industry’s sustainability.
Meta, once open to funding news initiatives, has now taken a more adversarial stance, claiming that news content has little economic value for the company. This stance follows a similar standoff in Australia last year when Meta and Google cut off news content in response to the News Media Bargaining Code, which aimed to enforce compensation talks between tech platforms and publishers. Australia’s experience with the legislation has resulted in additional funding circulating within the local journalism industry.
Critics argue that the news industry already relies heavily on social networks for distribution, and these laws could further deepen that dependence. They also point out that the negotiation frameworks may favor large media groups over small and independent publishers.
While controversial, these laws may serve as a bellwether for future legislation obligating social platforms to pay for content. In California, a similar proposal is currently on hold until 2024.
As we observe how the situation unfolds in Canada, it will be interesting to see the implications for the future of news distribution and the relationship between tech giants and publishers.