Latest tech crackdown sees Facebook and Instagram pull news in Canada
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2023 has been full of lawsuits and regulatory actions against some of the biggest names in tech, with the battles picking up pace as the year progresses. First is was the FTC vs. Microsoft (NASDAQ:MSFT) over its deal to acquire Activision (ATVI), followed by several attempts to break up Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) advertising business, as well as a coming antitrust suit against Amazon (AMZN) (it was just sued over deceptive practices this week). Other names are now in the firing line, which control the lion's share of activity that take place on social media.
The latest: Canada has gone through with plans that would require digital firms to pay domestic media organizations for their content. The legislation, known as the Online News Act, had triggered many warnings from Meta Platforms (NASDAQ:META), which said it will now end access to news on Facebook and Instagram for its users in Canada. It had fought a previous attempt when Australia passed a similar law in 2021 - before brokering a deal with the government - while it recently finding itself in the crosshairs of California and even lawmakers on Capitol Hill.
Regulatory headwinds are also blowing in Europe where popular online platforms, most notably Twitter, face a ticking clock to comply with the Digital Services Act by the end of the summer. The legislation, which is expected to become a global benchmark like GDPR, will make it easier to report illegal content, as well as provide more information on recommended content and revamp algorithms to prevent disinformation. Content generated by AI will also have to be clearly labeled, while targeted advertising will be restricted and platforms will face annual audits for "systemic risks."
Interestingly enough, some of the biggest gainers this year have been Big Tech, which have together supported the broader market. "The most recent stock market rally is carried by AI speculation. And AI speculation is carried by the Big Tech giants," writes SA analyst Cavenagh Research, who expects the rally to continue. Check out a chart of some of the YTD returns:

Go deeper: Forces that encourage competition are not only rising from outside forces, but are growing among the tech titans themselves. Rumors continue to circulate about "Threads" and "Project 92," which would be Meta's (META) response to Twitter, and allow Instagram users to directly transfer their followers and user information to the new app. In typical PR fashion, Elon Musk overlaid a popular Twitter thread that discussed the news by saying "Earth canât wait to be exclusively under Zuck's thumb" and even dared the Meta CEO to a cage match fight, with the latter responding to the challenge on Instagram.
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