Facebook Says It Is Prepared to Block News Content in Canada

“Faced with adverse legislation that is based on false assumptions that defy the logic of how Facebook works, we feel it is important to be transparent about the possibility that we may be forced to consider whether we continue to allow the sharing of news content in Canada,” said Marc Dinsdale, head of media partnerships at Meta’s Canadian unit.

Canada’s minister for cultural policy, Pablo Rodriguez, said in a statement officials held talks with Facebook as recently as last week, “yet they continue to pull from their playbook used in Australia.” He added, “All we’re asking the tech giants like Facebook to do is negotiate fair deals with news outlets when they profit from their work.” In testimony before lawmakers Friday, Mr. Rodriguez said the survival of the Canadian news business was at stake without the bill.

Facebook’s notice to Canada could trigger the type of high-stakes battle that unfolded last year in Australia over the same issue of compensation for media outlets. Facebook’s move in Australia to block news on its platform ended after a five-day period, with the company and government striking a deal in which officials agreed to ease regulations that effectively required payment in exchange for the social-media company restoring content. Facebook’s tactics drew criticism from lawmakers around the world.

According to Australian authorities, as well as Facebook documents and testimony filed to the U.S., the social-media company also took down pages belonging to Australian hospitals, emergency services and charities while blocking news content. Facebook representatives said this was inadvertent and due to a technical error.

Rachel Curran, Meta’s public-policy director in Canada, said Saturday Meta told government officials about the warning before its publication on a company blog. She said blocking news content “is really not our preferred outcome, and we’re not issuing this as a threat. We don’t want to be in a position where we’re having to think about or talk about removing news from the platform.”

Earlier this year, citing the Australia model, Canada introduced legislation that would require digital platforms to make “fair commercial deals” with news publishers, which incorporates print, digital and broadcasting outlets. Should negotiations fail to come to an agreement, the legislation envisages the two sides entering binding arbitration to determine appropriate compensation.

Canada’s parliamentary budget watchdog estimates the legislation could generate revenue of about $240 million a year for media outlets, with broadcasters in line for three-quarters of the amount.

Meta said the Canadian law presumes the company unfairly benefits from its relationship with publishers, “when in fact the reverse is true.” Meta said Canadian news publishers choose to share links and other content from their websites on Facebook to reach a wider audience, and it estimates that results in free marketing worth nearly $170 million a year.

The company said the legislation would require Meta “to acquiesce to a system that lets publishers charge us for as much content as they want to supply at a price with no clear limits. No business can operate this way.”

News Corp, owner of The Wall Street Journal, has a commercial agreement to supply news through Facebook. Meta has told publishers in the U.S. that it won’t renew contracts to feature their content in its Facebook News tab.

Michael Geist, an internet law professor at the University of Ottawa and a critic of the government’s online news legislation, said lawmakers need to address some of the flaws Meta is citing. “What matters is that the bill threatens the free flow of information online by legislating the principle that facilitating links to information is something that requires payment,” he said.

Write to Paul Vieira at paul.vieira@wsj.com