Exclusive-Meta's Canada news ban fails to dent Facebook usage

By Katie Paul and Steve Scherer

NEW YORK (Reuters) - Meta's decision to block news links in Canada this month has had almost no impact on Canadians' usage of Facebook, data from independent tracking firms indicated on Tuesday, as the company faces scorching criticism from the Canadian government over the move.

Daily active users of Facebook and time spent on the app in Canada have stayed roughly unchanged since parent company Meta started blocking news there at the start of August, according to data shared by Similarweb, a digital analytics company that tracks traffic on websites and apps, at Reuters' request.

Another analytics firm, Data.ai, likewise told Reuters that its data was not showing any meaningful change to usage of the platform in Canada in August.

The estimates, while early, appear to support Meta's contention that news holds little value for the company as it remains locked in a tense standoff in Canada over a new law requiring internet giants to pay publishers for the news articles shared on their platforms.

Meta declined to comment on the estimates.

The Online News Act, passed by the Canadian parliament in June, forces platforms like Meta and Google parent Alphabet to negotiate commercial deals with Canadian news publishers for use of their content.

Both Meta and Alphabet's Google have said the law is unworkable for their businesses. Meta, in particular, has said links to news articles make up less than 3% of the content on its Facebook feeds and have no economic value to the company.

The world's biggest social media company has been trying to reduce the prevalence of news and other civic content on its platforms in recent years as it faces regulatory pressure in key markets around the world.

Instead, it aims to promote lighter subjects like fashion, entertainment and sports.

The shift has resulted in a dramatic reduction in news consumption via social media, according to recent reports by the Reuters Institute and Pew Research Center.

Even before Meta pulled the plug on news links in Canada, Facebook referrals to a sampling of popular news sites in Canada were already down about 35% year-over-year in July and about 74% since 2020, according to Similarweb.

Still, the company's own transparency reports suggest news remains some of the most popular content on Facebook when it is there, at least in the United States, the only country for which Meta discloses the most frequently viewed content.

According to its most recent report, news websites made up 13 of the top 20 domains viewed on Facebook in the United States in the first quarter, while 18 of the top 20 individual links were to news articles.

Meta's other big social platform Instagram is less of a presence in the news environment as it does not enable links within individual user posts.

The company ended news sharing in Canada on its services at the beginning of August, while Google has said it plans to block news from search results in Canada once the law comes into effect.

Canadian government officials have accused Meta of brinkmanship in wiping its platforms of news in a moment of heightened need in Canada as wildfires force thousands of people from their homes, even as quiet negotiations over those rules continue behind the scenes.

Specific rules addressing how the law will be implemented are due to be released by late December, after which point the platforms would be expected to finalize deals with publishers.

Canada's new Heritage Minister Pascale St-Onge has spoken to both Facebook and Google since taking office after a cabinet shuffle at the end of July, her office told Reuters.

A Meta spokesperson confirmed the talks.

The Canadian regulator responsible for implementing the country's online news law said on Thursday that it would start setting up a framework for negotiations between news organizations and internet giants this autumn, with the aim of initiating mandatory bargaining by early 2025.

(Reporting by Katie Paul in New York and Steve Scherer in Ottawa; Additional reporting by Ismail Shakil in Ottawa; Editing by Kenneth Li and Nick Zieminski)