The parent company of the Toronto Star is suing Meta Platforms Inc. META-Q, alleging it unlawfully breached a contract to pay the newspaper millions of dollars for distributing content on social-media sites.

Torstar Corp. claims in an application filed this month in Ontario’s Superior Court of Justice that Meta agreed in September, 2021, to pay US$6.75-million over three years to distribute the publisher’s digital-news content on its platforms, which include Facebook and Instagram.

In June, 2023, Meta allegedly told the company that it would be terminating the agreement, just days after the Online News Act received royal assent in Canada.

The act, also known as Bill C-18, compels large tech companies to pay Canadian media outlets for posting their journalism, thereby supporting a financially troubled but vital industry.

Meta told Torstar it was terminating the existing agreement because the act would have “an adverse impact” on its ability to operate, specifically when it comes to distributing news content, according to the court application.

The company has not made any payments to Torstar since December, 2023, when the act came into force, the court filing states. Torstar is seeking to recover the remainder of the contract – US$1.6-million – plus interest.

None of the allegations have been proven in court.

Torstar did not reply to a request for comment, while Meta declined.

Torstar argues that the impact of the Online News Act was not sufficient to trigger the termination clause (which Meta drafted) in the existing compensation agreement. “The act merely obliged Meta to pay a fair rate for Canadian digital news,” according to the court filing. “Meta had already accepted that Torstar’s digital news, alone, was worth millions of dollars.”

Rather than be subject to the act, Meta has blocked access to domestic news outlets in Canada on its platforms.

(The Globe and Mail was also among the media outlets that previously signed compensation agreements with Meta and Google.)

Torstar owner Jordan Bitove was an enthusiastic supporter of the Online News Act and a vocal critic of the practices of big tech companies such as Meta and Google GOOGL-Q, whose consolidation of the digital advertising market has severely disrupted the publishing business model.

“We need to take on these tech giants,” he said in a podcast interview with Peter Mansbridge in 2023. “It goes way beyond the revenue, the 80 per cent of the revenue that they’re stealing from journalism organizations.”

His companies have been hit hard by the drastic shifts in the advertising market. Community newspaper publisher Metroland Media Group, which he also owns, laid off 605 employees in September, 2023, and went through a debt restructuring process.

Meta contends that the premise that it unfairly benefits from news content shared on its platforms is wrong. “The reverse is true,” the company said in a blog post in 2023. “News outlets voluntarily share content on Facebook and Instagram to expand their audiences and help their bottom line.”

The court filing against Meta is the third legal action Torstar has taken against tech companies lately. On Thursday, the Toronto Star joined more than a dozen publishers to sue Canadian artificial intelligence company Cohere in a U.S. court over alleged copyright infringement.

Last November, it was among the major Canadian news outlets that filed a similar lawsuit against OpenAI in Ontario. The Globe and Mail is also a plaintiff in that case.