Canada Suspends Ads on Facebook, Instagram in Feud Over New Law

Randy Thanthong-Knight, Bloomberg News

The Facebook Inc. Instagram logo is displayed on an Apple Inc. iPhone in an arranged photograph taken in Arlington, Virginia, U.S. on Monday, April 29, 2019. Facebook's sales gains are increasingly being driven by photo-sharing app Instagram and advertising in its Stories feature, a Snapchat copycat. Photographer: Andrew Harrer/Bloomberg , Bloomberg

(Bloomberg) -- The Canadian government is suspending its advertisements on Facebook and Instagram in response to Meta Platforms Inc.’s plan to permanently end news availability on its platforms in the country.

It’s the latest escalation in the quarrel that erupted when Prime Minister Justin Trudeau’s government passed a law in June requiring digital platforms — including Meta and Alphabet Inc. — to negotiate commercial deals with local publishers for featuring news content. Both tech giants said they intended to block news on their platforms by the time the law takes effect later this year.

“Platforms benefit from the status quo. They benefit from the fact that there’s currently nothing forcing them to contribute to our Canadian news system,” Heritage Minister Pablo Rodriguez said Wednesday in Ottawa. “That status quo isn’t working. All we want, all Canadians want, is for these platforms to contribute their fair share.”

While Alphabet also plans to remove links to news from Canadian publishers, Rodriguez said the company’s concerns will likely be resolved in the regulatory process. Meanwhile, Meta has “decided to be unreasonable, irresponsible” and started blocking news in the country, prompting the government to suspend all of its ads on the platforms, he said.

Meta’s Facebook and Instagram received the largest share of the government’s spending on social media, according to the latest annual report on advertising activities. During fiscal year 2021-22, Canada spent C$11.4 million ($8.6 million) on Facebook and Instagram, accounting for more than half of its total social media expenditure. It spent C$8.8 million on Alphabet’s Google during that period.

The government of Quebec, Canada’s second-most populous province, is also suspending its advertising on Facebook “in solidarity” with news outlets, according to Premier Francois Legault. “No business is above the law,” he said on Twitter after the federal announcement.

Earlier Wednesday, media firm Quebecor Inc. said it’s withdrawing all advertising by its subsidiaries and business units from Meta’s platforms. Cable television operator Cogeco Communications Inc. also said it would do the same.

“We’re telling both platforms to stay at the table, work through the regulatory process with us, contribute their fair share and keep news on their platforms,” Rodriguez said. “We believe we have a path forward, and we’re willing to continue talking with the platforms.”

--With assistance from Mathieu Dion.

(Updates with Quebec decision in 6th paragraph.)