Meta Platforms Inc. META has declined Canadian Prime Minister Justin Trudeau‘s proposal in an ongoing online news feud.
What Happened: On Friday, Trudeau’s government released details of a law aimed at compelling tech companies to pay news providers. However, Meta has stated it will continue to block Canadian users from viewing news stories on Facebook.
“As the legislation is based on the incorrect assertion that Meta benefits unfairly from the news content shared on our platforms, today’s proposed regulations will not impact our business decision to end news availability in Canada,” Rachel Curran, head of public policy for Meta in Canada, told Bloomberg via email.
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The draft regulations stipulate that Meta and Alphabet Inc. GOOG GOOGL would be required to pay news outlets a minimum of 4% of their annual revenue in Canada to carry links to news articles.
This law would require Google to pay approximately C$172 million annually to the Canadian news industry, while Facebook would need to pay C$62 million per year, according to government estimates, the report noted.
Why It Matters: This dispute can be traced back to the Canadian parliament’s passing of the Online News Act. The Act was designed to compel tech giants like Meta and Alphabet to negotiate commercial deals with Canadian news publishers.
In response, Meta started blocking access to news on its social media platforms in Canada.
To checkmate Meta’s move, Canada’s Transport Minister Pablo Rodriguez announced a plan to halt government advertising spending on Facebook and Instagram.
This decision was expected to significantly impact Meta, which derives a substantial portion of its revenue from advertising.
Despite this, Meta remained steadfast in its decision to block news, which led to complications during a wildfire crisis in the country’s west. The Canadian government urged Meta to lift the ban to aid in disseminating crucial information.
Prime Minister Trudeau has since criticized Meta’s decision, especially at a time when Canada was grappling with devastating wildfires. Still, Meta has rejected Trudeau’s proposal.
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