Meta Platforms Inc. said it will end the availability of news on Facebook and Instagram for all users in Canada after the country passed a law requiring digital platforms to pay local publishers.

The Online News Act, which received parliamentary backing Thursday, is designed to ensure companies including Meta and Alphabet Inc. enter into financial agreements with news organizations, essentially forcing them to pay outlets for linking to news. The bill is based on similar legislation in Australia, which prompted Meta to temporarily restrict users from seeing news content and posting links to stories in that country in 2021.

Prime Minister Justin Trudeau’s government has been ramping up its efforts to regulate the tech industry. The passage of this bill and another act aimed at siphoning profits of streaming services into local funds to support Canadian artists — as well as planned legislation to address harmful online content — make the country a likely battleground for tech companies trying to set an example to other jurisdictions looking at imposing rules on the sector.

The passage of the law, which has yet to come into effect, puts Canada on a collision course with tech giants. Both Google and Meta already began blocking news content for a small number of users in the country, with the latter threatening to “end the availability of news content in Canada permanently following the passage.”

Meta confirmed in a statement on Thursday that it will follow through on its threat. Google spokesperson Shay Purdy said by email that the company is “doing everything we can to avoid an outcome that no one wants” and is “continuing to urgently seek to work with the government on a path forward.”

The government has said the bill would help level the playing field, diverting some advertising revenue to the Canadian media sector that saw 450 outlets close between 2008 and 2021. Tech giants argued that they would be unfairly forced to pay for content that has no economic benefits, and critics said the bill risks making journalism dependent on funding for tech companies.

An organization representing news outlets in Canada applauded the bill’s passage, calling it an important first step to address the significant market power imbalance between publishers and platforms. “Real journalism, created by real journalists, continues to be demanded by Canadians and is vital to our democracy, but it costs real money,” said Paul Deegan, president and chief executive officer of News Media Canada, in a statement.

Columbia University journalism professor Bill Grueskin, who studied the Australian legislation, estimated by extrapolation of the market size that about C$300 million ($228 million) could be raised annually from the deals between tech giants and news outlets in Canada.

(Retops with Meta following through on pledge to block news.)

Author: Randy Thanthong-Knight