Canada To Cut Advertising Spending On Facebook and Instagram Amid News Block Controversy

On Wednesday, Canada’s Transport Minister, Pablo Rodriguez, announced a plan to halt government advertising spending on Facebook and Instagram, platforms owned by Meta Platforms Inc. META. This move is expected to deprive the tech giant of significant advertising revenue.

What Happened: In response to the new Online News Act, which requires internet firms to compensate news publishers, Meta and Alphabet Inc‘s Google GOOGL signaled their intention to block Canadian news content. However, Rodriguez remained resolute, stating, “Guys, it's clear. Status quo, not working,” Politico reports.

As part of the government’s pushback, Rodriguez announced plans to cut off advertising spending on Facebook and Instagram. This decision is expected to have a significant financial impact on Meta, which derives a substantial portion of its revenue from advertising.

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Why It Matters: This move by the Canadian government is a significant development in the ongoing global debate about the power of tech giants and their responsibilities towards news publishers. It also represents a new strategy by governments to exert pressure on these companies, by hitting them where it hurts most – their advertising revenue.

The unfolding situation in Canada is a testament to the ongoing global debate about the power of tech giants and their responsibilities towards news publishers. Canadian Prime Minister Justin Trudeau has previously accused Meta and Google of using “bullying tactics” against the legislation.

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