Bipartisan bill to make Big Tech pay publishers for news advances despite Meta threat

The California State Capitol building. (Kent Steffens, Getty Images/iStockphoto)

A bipartisan California bill that would require big technology companies to pay news organizations for using their content passed the state Assembly on Thursday despite a threat this week from Facebook parent Meta to remove news articles from its platforms if the proposal becomes law.

“Free press is in our constitution, and it is at risk right now, that is what this bill is about,” Assemblywoman Buffy Wicks, an Oakland Democrat, told lawmakers before the state Assembly voted 46-6 to pass AB 886, the California Journalism Preservation Act. “Publishers deserve to be paid a journalism usage fee relative to how much their content is used on these platforms.”

The legislation — co-authored by assembly members Bill Essayli, a Riverside Republican, and Josh Lowenthal, a Long Beach Democrat — now heads to the state Senate. Although supporters and opponents predict a long fight ahead, Thursday’s vote marked a milestone for the proposal to subsidize struggling media organizations whose financial model has been rocked by technological changes in the way news is distributed and consumed.

Wicks introduced the bill following the collapse in December of the Journalism Competition and Preservation Act, proposed federal legislation with similar goals.

The California bill would set a binding arbitration process to determine a percentage of advertising revenue that internet platforms would pay news organizations for their articles. Australia and Canada have passed similar laws.

Sponsored by the California News Publishers Association, the bill is backed by a number of print and broadcast news organizations, including the Bay Area News Group. Opponents include not only the bill’s chief targets — Alphabet’s Google and Meta’s Facebook — but also the ACLU of California, the California Chamber of Commerce, California Taxpayers Association, the Electronic Frontier Foundation and some online news organizations, including CalMatters.

With millions of dollars at stake, the war of words intensified on Wednesday, a day before the Assembly vote, when Meta blasted the proposal in a statement and issued an ultimatum: “If the Journalism Preservation Act passes, we will be forced to remove news from Facebook and Instagram rather than pay into a slush fund that primarily benefits big out-of-state media companies under the guise of aiding California publishers.”

“The bill fails to recognize that publishers and broadcasters put their content on our platform themselves and that substantial consolidation in California’s local news industry came over 15 years ago, well before Facebook was widely used,” Meta’s statement continued. “It is disappointing that California lawmakers appear to be prioritizing the best interests of national and international media companies over their own constituents.”

Wicks said in response that “this threat from Meta is a scare tactic that they’ve tried to deploy, unsuccessfully, in every country that’s attempted this.”

“It’s egregious that one of the wealthiest companies in the world would rather silence journalists than face regulation,” Wicks said.

Six Republican lawmakers voted against the bill: Phillip Chen from Brea, Heath Flora from Ripon, Josh Hoover from Folsom, Tri Ta from Westminster, Marie Waldron from Escondido and Greg Wallis from Rancho Mirage.

“I’m afraid that this bill is going to have some serious unintended consequences,” said Hoover, who said he fears such a law would push online platforms to suppress or stop carrying news content to avoid the payments and that it would create incentives that would benefit big national media over small publishers.

But it wasn’t just the legislature’s minority Republicans voicing opposition. Several Democrats aired similar concerns, giving the bill a courtesy pass vote but stressing that it needs more work.

“This bill runs the risk of favoring large newspapers over small newspapers, not to mention the growing movement toward nonprofit media outlets,” said Assemblyman Al Muratsuchi, a Torrance Democrat. He said he’d vote for the bill “for the sake of moving this forward” but asked the authors to “make sure all media is supported.”

But backers said something has to be done to save the news industry. They noted that since 2005, the U.S. has lost 2,500 newspapers, and by 2025 it is estimated that a third of those that were in operation 20 years ago will be gone. California has lost more than 100 newspapers in the last decade.

Meanwhile, Meta reported profits of $23.2 billion on revenues of $116.9 billion, and Google parent Alphabet reported profits of $59.9 billion on revenues of $282.8 billion for 2022.

Essayli said that “just because something is complicated and hard doesn’t mean we shouldn’t do it.”

“I want to be clear,” Essayli said, “I do not support corporate welfare, but I also do not support unjust enrichment.”