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Meta Rejects Canada’s $60M Online News Act Exemption

Company rejects the country’s formula seeking $60 million US to qualify for an excemption to the Online News Act.

Meta refuses to pay $60 million US for an exemption to the Online News Act, even thought the end result would be a contribution to local news and Meta lifting the block on Canadian news on Facebook and Instagram. The draft regulations for the Online News Act were released last week and are under review for 30 days. The draft regulations did not soften Meta’s stance. Since the Online News Act (Bill C-18) was first discussed, Meta has threatened to remove news from Facebook and Instagram users in Canada. Once the Online News Act received royal assent in June, Meta tested and later removed Canadian news from its platforms.

The Online News Act was developed to level the playing field between tech giants like Meta and Google and Canadian news outlets. The Online News Act will apply to businesses that:

  • Have total global revenue of $1 billion or more in a calendar year
  • Have 20 million or more Canadian average monthly unique visitors or average monthly active users
  • Operate a search engine or social media market that distributes or provides access to news in Canada

At this time, Meta’s Facebook and Google are the only companies that meet the criteria, with Microsoft’s Bing search engine next in line. Qualifying companies are required to voluntarily negotiation compensation with news publishers and pay them a portion of their global revenue. There is a loophole though.

The Online News Act offers an exemption even for the largest of companies. Companies can pay an amount calculated by the Canadian government. Officials estimate that Google would need to pay $126.6 million US and Facebook $60 million US in compensation, CBC reports.

The formula is based on global revenue earned by the tech company and Canada’s share of global GDP. If they follow this formula, the government believes these amounts represent 20% of the earnings for full-time Canadian news journalists. Non-monetary contributions can also be made, though the draft regulation does not spell those out yet.

“The goal of it is to make sure that those that benefit the most from the Canadian market fall under the bill,” Heritage Minister Pascale St-Onge told The Canadian Press following the proposal’s release, according to CBC. “We know how technology evolves or how the market changes sometimes at a rapid pace and we want to make sure that this bill is relevant in five and 10 years.”

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Meta’s position

“As we have communicated to the government, the regulatory process is not equipped to address the fundamentally flawed premise of the Online News Act. 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 Canada, told The Hill in a statement.

Meta bashed for not lifting news ban during Canadian wildfires

Meta recently came under fire for not lifting the news ban as Canadian wildfires spread across the country. On August 18, the Canadian government demanded that Meta lift the blocking of Canadian news on Facebook and Instagram, so that people could share information about the wildfires, says Reuters.

St-Onge shared her thoughts on social media platform X.

Insider Take

At this point, it is not a matter of money, but one of principle. Meta can easily afford $60 million, but they feel that news outlets in Canada benefit from their news being published on Facebook and Instagram. They don’t feel like they should be paid for a relationship Meta views as mutually beneficial. They fought similar legislation in Australia, but eventually reached a compromise. Meta has not had the same success in Canada, and it doesn’t look the ship is turning anytime soon.

Copyright © 2023 Authority Media Network, LLC. All rights reserved. Reproduction without permission is prohibited.

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