The Canadian government announced on Wednesday its decision to stop buying ads on Big Tech platforms Meta and Alphabet’s Facebook and Instagram, in light of the Online News Act, or Bill C-18, that was passed into law last month. The act requires tech companies to pay online news publishers, however, in response, Meta and Alphabet have both said they would end news access on their platforms in Canada.

Prime Minister Justin Trudeau said in Monteregie, Quebec that the country wants to “ensure that, if social media platforms and internet giants want to use media, that they actually ensure that they’re paying their fair share for it”. The government is still finalising the rules that would require the platforms to share some advertising revenue when the law is implemented by the end of this year, and Heritage Minister Pablo Rodriguez said they are open to discussions with the platforms.

The legislation was drafted after the Canadian media industry called for tighter regulation of internet giants, as 80 percent of all advertisement revenue in Canada — or almost 10 billion Canadian dollars ($7.5bn) in 2022 — went to Google and Facebook. Rodriguez said the decision to suspend government ads will cost Facebook and Instagram about 10 million Canadian dollars ($7.5m) per year.

Meta has previously said that news does not hold economic value for the company, however, Rodriguez sounded more optimistic about reaching a compromise with Google, saying the government was convinced that “what Google is asking at this moment can be done”. Google, which had proposed amendments to the act that were rejected, said last week that the government’s regulatory process was unlikely to resolve “structural issues with the legislation”.

The outcome of Canada’s tussle with internet giants can set the tone for other governments trying to regulate internet companies. If the companies fail to secure exemptions or get the rules changed in Canada, they may face a similar fate in the United States. Democratic US Senator Elizabeth Warren has expressed support for Canada’s stance, saying that “leaders are right to stand firm against these tactics and push back against Big Tech’s freeloading off local news”.

The Canadian government’s decision to stand firm against Big Tech’s freeloading off local news is a step in the right direction. The Online News Act ensures that tech companies are paying their fair share for using media, and the government is open to discussions with the platforms to reach a compromise. This development has the potential to set the tone for other governments trying to regulate internet companies, and the support of the US Senator Elizabeth Warren is a sign of hope.