Meta's news ban in Canada remains as Online News Act goes into effect

A bill that mandates tech giants pay news outlets for their content has come into effect in Canada amid an ongoing dispute with Facebook and Instagram owner Meta over the law.

Some have hailed it as a game-changer that sets out a permanent framework that will see a steady drip of funds from wealthy tech companies to Canada's struggling journalism industry.

But it has also been met with resistance by Google and Meta - the only two companies big enough to be encompassed by the law.

In response, over the summer, Meta blocked access to news on Facebook and Instagram for Canadians.

Google looked set to follow, but after months of talks, the federal government was able to negotiate a deal with the search giant as the company has agreed to pay Canadian news outlets C$100m ($75m; £59m) annually.

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No such agreement appears to be on the horizon with Meta, which has called the law "fundamentally flawed".

If Meta is refusing to budge, so is the government.

"We will continue to push Meta, that makes billions of dollars in profits, even though it is refusing to invest in the journalistic rigor and stability of the media," Prime Minister Justin Trudeau told reporters on Friday.

So what exactly is the law? And how does it work?

What is Bill C-18?

Bill C-18, officially called the Online News Act, was introduced by Canada as a way to "enhance fairness" for news publishers by carving out way for them to be compensated by tech giants.

It applies to companies that operate social media platforms or search engine websites in Canada - where news is often shared and disseminated - and that have a total global revenue of more than C$1bn in a calendar year.

These platforms also need to have a monthly average of 20 million Canadian visitors or active users.

Media outlets that can receive funds include any news publisher with an online presence in Canada.

The tech companies must reach financial agreements with each individual outlet, or one single agreement in which multiple news outlets receive a percentage of promised funds.

Under the single deal struck between the government and Google, for example, up to 30% of the funds will go towards broadcasters, with 7% of that going to Canada's public broadcaster, the CBC.

A majority of the money will go to print and online media, with the amount determined by how many full-time employees they have.

Australia passed a similar legislation in 2021. Meta briefly blocked news there but stopped after amendments to the law were made. Google and Meta have since negotiated a number of deals with Australian media companies.

Other countries, like the UK and the US, have also signalled that they may move to enact similar laws.

Access to news on Meta platforms has been banned in Canada since July

In Canada, a company can be fined by the body that regulates media and communication if it doesn't comply with the law. A fine for a first offence can be up to C$10m, and each offence after that carries a penalty of up to C$50 million.

Who stands to benefit from the Online News Act?

Many news outlets in Canada have financially struggled from a steady decline in advertising revenues, forcing several rounds of journalism layoffs over the years.

Because of this, some have hailed the legislation as a win.

"This is a framework that is, first of all, durable," said Paul Deegan, the president of News Media Canada, an association that represents newspaper publishers in the country.

"It's fair and balanced and predictable for publishers and for platforms," Mr Deegan told the BBC.

In the past, Google and Meta struck their own deals with news publishers, which meant tech giants were picking "winners and losers", he said.

Not everyone sees C-18 as a good thing.

Meta has argued the bill misunderstands how the internet works and has said it gets little commercial gain from news content.

Michael Geist, the Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa, said that the amount of new money publishers are getting is relatively small - especially considering other deals that were in place that were scrapped or folded into the new legislation.

The ongoing dispute with Meta has also caused harm to Canadian news outlets, Mr Geist said.

A recent study by the Media Ecosystem Observatory out of McGill University and the University of Toronto found that views of Canadian news on Facebook dropped 90% after the ban was introduced.

The study added that local news outlets in Canada have been hit the hardest.

"The loss of journalism on Meta platforms represents a significant decline in the resiliency of the Canadian media ecosystem," said Taylor Owen, a researcher at McGill and the co-author of the study.

Mr Deegan said there is "no question" that the Meta news ban has been painful. But he added he believes it also hurts Meta's brand in the long run.

He pointed to the fact that Canada's federal government, as well as that of British Columbia, other municipalities and a handful of large Canadian companies, have all pulled their advertising off Facebook and Instagram in retaliation.