The Canadian government's decision to suspend advertising on Facebook and Instagram marks a new escalation in the ongoing rift between the social media channels' parent company Meta Platforms Inc (NASDAQ:FB) and Justin Trudeau’s administration.
The two have been at loggerheads since Trudeau’s government passed a law in June mandating that digital gatekeepers, including Meta and Google parent Alphabet Inc (NASDAQ:GOOG), negotiate commercial agreements with local publishers to feature news content.
In response, both tech giants announced their intention to block news on their platforms when the law becomes effective later this year.
Canadian heritage minister Pablo Rodriguez emphasized that the incumbent system unfairly favours the big platforms, as they benefit from not being obligated to contribute to the Canadian news system.
“Platforms benefit from the status quo,” said Rodriguez in a press conference on Wednesday. “They benefit from the fact that there’s currently nothing forcing them to contribute to our Canadian news system.
“That status quo isn’t working. All we want, all Canadians want, is for these platforms to contribute their fair share.”
Rodriguez called Alphabet’s decision to remove links to Canadian news outlets as a protest against the pending Online News Act “unreasonable” and “irresponsible”.
The Canadian government spent C$11.4mln (£6.75mln) on advertising on Facebook and Meta in the last financial year, and slightly more the year before.
Ad spend on Google in the last financial year was C$8.8mln, 73% more than the previous year.
Source: Annual Report on Government of Canada Advertising Activities
In a show of solidarity with local news outlets, the government of Quebec, Canada's second-most populous province, has also decided to suspend its advertising on Facebook.
Premier Francois Legault took to Twitter, stating that “no business should be above the law”.
Rodriguez has called on Meta and Alphabet to “work through the regulatory process with us, contribute their fair share and keep news on their platforms”.