Canada has withdrawn all its government advertising from Meta’s platform, the BBC reports. This is in response to Meta’s threat of blocking all news content in Canada, due to a Canadian law which would tax social media to subsidize local newsrooms.
Currently, websites generate revenue from advertising and subscriptions. They do not generate revenue when the stories are posted on social media, especially if users only read headlines and not the whole article. Posting news links on social media websites gives exposure to news stories that users might not have otherwise found. On the other hand, those very stories give the value to social media websites that draw users in the first place.
The Canadian Federal Government’s ad budget is only $7.5 million, which would not impact Meta’s $116 billion revenue. However, it could signal that Canada is prepared to use further government power to make Meta and similar companies comply. Canada has already announced that Google is willing to work on a compromise solution.
Canada is not the first country working on this kind of legislation. Australia has already passed a similar law. California and Meta are also at each others throats over a similar law that would compensate publishers for links posted on Facebook or Instagram.
It is currently unknown how Threads, Meta’s brand new app, would impact news publishing since it is a text-based social media. Microblogging, such as on Twitter, Substack, and now Threads, is growing in importance, often breaking news ahead of traditional news corporations.
