In June 2023, Canada enacted the Online News Act, a law inspired by similar legislation in Australia, designed to ensure “fairness in the Canadian digital-news marketplace.” The goal was to compel tech giants Google and Meta to pay news outlets when their articles appear in search results and social media feeds. The intention was to reclaim some of the advertising revenue that these tech firms had taken from traditional news publishers and broadcasters. However, the implementation of this law has had unintended consequences, particularly for smaller news organizations and digital-only publications.
Maureen Googoo, the owner, editor, and sole reporter of Ku’ku’kwes News, a website focused on Canada’s indigenous communities, has seen a drastic drop in her readership. Before the law’s enactment, her site garnered about 12,000 monthly visits. Now, it receives barely a quarter of that traffic. The decline began last summer when Meta, in response to the new law, decided to block news links from its platforms, Facebook and Instagram, rather than pay the mandated fees. Consequently, users in Canada can no longer view or share links to news articles on these platforms.
This blackout has significantly impacted news organizations. A study by McGill University and the University of Toronto revealed that six months after the blackout, the Facebook pages of Canadian national news outlets saw a 64% decrease in engagement, while local outlets experienced an 85% drop. Some local news outlets have ceased posting on Facebook entirely, leading to a substantial decline in their visibility. Large publications with their own apps and well-known brands have fared better, but digital-only titles like Ku’ku’kwes News have struggled.
The law has also affected news consumption habits. Readers have found ways to circumvent the blackout, such as sharing screenshots of articles instead of links. On groups like “Only in Canada,” which has half a million members, users now post photos of headlines from blocked news sites, turning screenshots into a new form of engagement. This workaround, however, is less effective for news outlets that rely on link clicks to drive traffic to their websites.
Adam Reaburn, the editor of Energetic City, a digital news site in rural British Columbia, reported a 30-40% drop in readership following Meta’s news ban. To adapt, his site has signed up 5,000 readers to an email newsletter, developed a mobile app, and put up posters around town with QR codes leading to their website. Similarly, Ku’ku’kwes News is seeking to expand its audience beyond Canada, targeting indigenous communities in the United States who can still share news on Facebook.
The situation has broader implications for the dissemination of information and the spread of misinformation. Pascale St-Onge, the minister responsible for the Online News Act, expressed concern that the absence of reliable news sources on social media could lead to a rise in disinformation. According to NewsGuard, a fact-checking organization, the engagement with unreliable sources on Facebook in Canada increased to 6.9% after the news blackout, up from 2.2% before. Although the McGill and Toronto researchers found no significant increase in misinformation, the lack of trusted news sources on social media remains problematic.
The financial repercussions for Meta appear minimal. Despite an ad boycott led by the Canadian government, Meta’s ad revenue in the United States and Canada has grown by 19% in the nine months since the blackout began. The number of users and app downloads in Canada has not decreased. This resilience suggests that Meta can weather such regulatory challenges without significant financial damage.
Canada’s communications regulator will soon decide whether Meta’s blocking of news links exempts it from making payments under the Online News Act. Minister St-Onge argues that Meta should still pay because news content is still indirectly present on its platforms. If the regulator rules otherwise, the government may seek to amend the legislation. News Media Canada, which supports the law, has also filed a complaint with the competition regulator, accusing Meta of abusing its dominant market position by blocking news links.
The challenges faced by Canada may serve as a cautionary tale for other countries considering similar laws. When Australia enacted its news-media bargaining code in 2021, securing significant payments from Google and Meta, it inspired countries like Britain, Brazil, and South Africa. However, Meta’s strong stance in Canada—refusing to pay and opting to block news instead—signals a potential shift in how tech giants might respond to such regulations in the future. Jesper Doub, former head of international news partnerships at Meta, suggested that the company is now more likely to walk away from negotiations rather than comply with payment demands.
The impact on small publishers like Ku’ku’kwes News is stark. While Ms. Googoo hopes Meta’s news blackout will eventually end, she has applied for funds from the Google fund in the meantime. The primary effect of the new law has been a reduction in her readership, contrary to the intended benefit of the act. The experience in Canada highlights the complex dynamics between legislation, tech companies, and the media, and underscores the need for careful consideration and implementation of such laws to avoid unintended negative consequences.
