Small and mid-size publishers across Canada are experiencing significant drops in traffic and revenue as a result of a standoff between Meta and the government over a new law requiring payment to news organizations for their content, according to a report.
Meta removed news from Canadian publishers on Facebook and Instagram in August following the approval of legislation by Canada’s Parliament two months earlier, which mandates compensation for promoting news reports. The bill, known as Bill C-18 or the Online News Act, will not take full effect until December 19. However, Meta has already chosen to block news from Canadian organizations rather than pay, as reported by The Wall Street Journal.
“We’re completely handicapped in terms of revenue, which was based on sharing news on Facebook,” said Khaled Iwamura, the founder and CEO of local news site Insauga.com that serves the Toronto area.
According to Iwamura, prior to August, 30% of Insauga.com’s traffic came from Facebook. He added, “Canadians can’t access any news on social media right now, including articles from international publications like The New York Post.”
Jeff Elgie, the chief of hyperlocal Ontario media company Village Media, stated that the company has witnessed a 20% drop in traffic across its 24 websites since Meta’s link blocks started two months ago, as reported by The Journal.
A spokesperson for Google confirmed that the company has not made any changes for Canadian users. In March, Google conducted a five-week test by blocking news links, but it will continue operating as usual until the Online News Act takes effect later this year.
“We have serious concerns that the core issues may not be resolvable through regulation and that legislative changes may be necessary,” said a Google spokesperson. “We have been and will remain engaged and transparent with the government about our concerns and will await the publication of final regulations.”
Elgie does not blame Meta for the losses. Instead, he holds the Canadian government responsible for not heeding warnings from Canadian news executives about the severe repercussions of cracking down too hard on tech companies.
Elgie told The Post, “We [Village Media] never wanted this bill, nor did many other independent digital publishers. The premise of C-18 was flawed from the beginning, suggesting that platforms steal our content without offering anything in return. This is untrue.”
Canadian Prime Minister Justin Trudeau defended the government, pointing out that South American, African, and Asian governments have considered passing similar legislation, as reported by The Journal.
“This is not an easy fight, but it’s the right fight because without quality independent journalism, democracy erodes,” Trudeau said.
“We just want Meta to be responsible. However, they have chosen to block people from sharing articles because they don’t want to pay for local journalism,” said Iwamura.
Paul Deegan, the president and chief of news publisher lobby group News Media Canada, stated that “Meta’s ban is undoubtedly undermining our ability to invest in high-quality journalism.” While he advocated for the passage of this controversial law, he has recognized that the resulting legislation went too far.
Deegan added in an email statement to The Post, “We believe there is a way to balance the needs of platforms and publishers, but mandatory bargaining and collective negotiation with binding arbitration are non-negotiable. This is the only way publishers can receive a fair deal that enables us to reinvest in our newsrooms.”
The Post has requested a comment from Pascale St-Onge, the Canadian minister responsible for the Online News Act.
Under the new law, digital platforms must negotiate commercial agreements and pay news publishers if they want to share their content. If negotiations fail, the law calls for both parties to enter binding arbitration to determine appropriate compensation.
The Canadian government estimates that digital platforms will collectively have to pay Canadian publishers $170 million for the 2023 calendar year. According to The Journal, Google would be responsible for about three-quarters of this amount.
Australia passed a similar groundbreaking law in 2021. In response, Facebook imposed a news ban in Australia, which was lifted after the government made concessions.
The compromise ensured that Facebook and Google, the other primary target of the law, would not be penalized as long as they reached agreements with local media companies to pay for news.
Representatives for Meta have not yet responded to The Post’s request for comment.
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