Meta says new draft regulations that define how much it would have to pay into the country’s news industry under the federal Online News Act don’t go far enough to convince it to reverse its decision to block Canadians’ access to news on Facebook and Instagram.
The proposed regulations, published Friday, set a $230-million cap on the amount Google and Facebook would together have to inject into Canada’s news sector, a contribution formula designed to defuse a tense stand-off with the tech giants over the legislation, also known as Bill C-18.
But Meta made clear that Ottawa’s move would not be enough to bring it back to the bargaining table.
The company, which owns both Facebook and Instagram, began blocking Canadians’ access to news on those platforms last month – in the process exempting itself from the Online News Act, which requires tech giants to pay news organizations for using their work. Google has warned it plans to do the same, unless Ottawa addresses its objections to the law, which received royal assent in June but does not go into effect until December.
In the new regulations, the government attempted to address the tech giants’ complaints that the law would impose unlimited financial liabilities on them.
The regulations use a formula based in part on the companies’ global revenue. Google would have to pay around $172-million per year to Canadian news outlets, and Facebook $62-million, a federal official said at a technical briefing for journalists Friday.
The official said the figures could be up for discussion with the platforms, but Meta said it would not take part in consultations.
“As we have communicated to the government, the regulatory process is not equipped to address the fundamentally flawed premise of the Online News Act,” Rachel Curran, head of public policy at Meta Canada, said in a statement. “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.”
In an interview with The Globe and Mail last week, Heritage Minister Pascale St-Onge expressed optimism that Meta would come back to the bargaining table once the draft regulations were released.
Paul Deegan, president and chief executive officer of News Media Canada, which represents the news industry, said that with the regulations Ms. St-Onge “has hit the right notes in providing clarity and predictability to both platforms and publishers.”
“She’s come up with something fair that all parties acting in good faith should be able to live with,” he added.
Mr. Deegan said that by continuing to block news Meta could lose tens of millions of dollars a year in advertising revenue. The federal government, which last year spent $11.4-million advertising on Facebook and Instagram, suspended that advertising in protest after Meta imposed its block. Quebec and British Columbia’s provincial governments have also pulled ads, and so have municipalities and media organizations.
“If a few more large government and corporate advertisers pull their advertising from Meta, it will soon cost the company more than they will have to pay out under the Online News Act,” Mr. Deegan said.
The act is designed to support the Canadian news industry, which must compete with big tech platforms for advertising dollars.
Google said in a statement Friday that it was “carefully reviewing the proposed regulations to assess whether they resolve the serious structural issues with C-18 that regrettably were not dealt with during the legislative process.”
The regulations specify that the act applies only to platforms that provide access to news and make more than $1-billion a year globally, with at least 20 million monthly users in Canada. Only Google and Facebook currently meet those revenue and usage criteria.
But other platforms – such as Microsoft’s Bing search engine – could be covered by the law if their market position in Canada grows.
In Friday’s technical briefing, an official said Instagram is unlikely to be captured by the Online News Act because it does not appear to meet the threshold of 20 million or more Canadian monthly users.
To be exempt from intervention by the Canadian Radio-television and Telecommunications Commission, which will oversee the Online News Act, platforms would have to make deals with news organizations, including Indigenous and French-language news outlets, and pay them for using their work. If they fail to make these deals they could face mandatory arbitration and bargaining overseen by the CRTC.
The deals must also be “fair” and not deviate much in value from financial agreements with similar-sized news outlets, the draft regulations say. The amount of compensation would depend in part on how many full-time journalists each news organization employs. And some of the total compensation could consist of technical support, training and other types of non-monetary benefits.
Existing deals to compensate news organizations for using their content could also count. The Globe and Mail is among the Canadian media outlets that have already struck agreements with Google and Meta.
NDP MP Peter Julian, the party’s heritage critic, said it is “shameful” for Meta to block access to credible news sources because its profits are threatened.