News Publishers May Soon Be Paid By Big Tech Companies Under Proposed California Bill
A new bill proposed in California could soon require big tech companies like Google and Meta to pay news organizations for the publication and use of their content. The bill, which passed a major Assembly Judiciary Committee hearing on Tuesday with bipartisan support, aims to support local journalism by sharing the ad revenue derived from news and other reported content with California media companies. The amount of revenue to be shared would be determined through an arbitration process.
Advocates of the bill claim that it would provide a “lifeline” for local news organizations, which have experienced a significant decline in advertising revenue in the digital age. However, opponents, including trade groups and some news organizations, argue that the legislation would be an unprecedented mandate that violates the First Amendment.
Under the bill, at least 70% of the revenue generated would go to local news organizations to help pay reporters’ salaries. Big tech companies would also be prohibited from retaliating against a news outlet that demands payment by excluding their content from their platforms.
Oakland Assemblywoman Buffy Wicks, the bill’s author, emphasized the need for the proposed legislation, noting that California has lost over 100 news organizations in the past decade. He also highlighted the imbalance in the dominance-type platforms, where newsrooms are forced to share content with tech companies while receiving almost no compensation in return.
While the bill has garnered support from major news unions such as the News Media Alliance and the Media Guild of the West, a digital rights group, the Electronic Frontier Foundation, has said the legislation is unconstitutional. The group argues that the bill requires online platforms to publish content from all news organizations, rewarding clickbait content and limiting the ability of Google and Meta to combat misinformation on their platforms.
Critics of the bill also argue that it would primarily benefit newspaper chains and hedge funds that have destroyed local newsrooms in recent decades. Chris Krewson, CEO of LION Publishers, a national news group that represents over 450 independent newsrooms, said the bill is “fundamentally flawed” and was not written with small newsrooms in mind. He added that most of the news outlets in California would not qualify to benefit from the bill.
Similar efforts to bolster local news companies have been attempted in the United States, Australia, and Canada, with varying levels of success. Australia adopted a law in 2021 that resulted in $140 million in payments to news companies from Google and Facebook last year. US lawmakers are also pushing similar initiatives, reintroducing a bill in March that failed in the last session of Congress. The bill would have allowed news companies to co-negotiate an advertising fee with tech giants like Google.
As per information from the source, Meta declined to comment on the California bill, while Google did not respond to an email seeking comment.
Despite clearing another hurdle on Tuesday, questions remain about how the bill would be implemented. Democratic Assemblyman Matt Haney of San Francisco said he also has concerns about how the state would ensure the money reaches local journalists. Wicks said he plans to clarify those concerns before the June 2 deadline, which is the last day the Assembly could vote on the bill before it is considered by the Senate. Governor Gavin Newsom has not indicated whether he would support such legislation.
Overall, the proposed California bill seeks to address the decline of local news organizations by forcing big tech companies to share their revenue with those companies. Although the bill received bipartisan support during the recent hearing, its effectiveness remains in question. It is unclear how the legal and logistical issues associated with this proposed legislation will be resolved.
