California is leading the charge in making Big Tech pay for news articles that boost their profits. Assembly Bill 886, also known as the California Journalism Preservation Act, recently passed a second bipartisan-backed legislative committee and will proceed to a vote in the Assembly. The bill requires internet platforms to use binding arbitration to determine the percentage of advertising revenue to compensate news organizations for its content.
Sponsored by the California News Publishers Association, AB 886 has gained support from several print and broadcast news organizations. However, it faces opposition from Big Tech companies such as Alphabet’s Google and Meta’s Facebookas well as groups like the ACLU of California, the California Chamber of Commerce, and some online news organizations.
Matt Schruers, president of the Computer and Communications Industry Association (whose members include Meta, Google, Twitterand Yahoo!), argued that technology companies’ use of news content is consistent with US copyright law. He warned that taxes and fees on links would alter the basic architecture of our connected economy and open the door for other tolls, fees, and taxes on the free and open internet.
On the other hand, Hal Singer – a professor of economics at the University of Utah who specializes in antitrust and consumer protection issues – spoke in favor of AB 886. He noted that it differs from a proposed federal law by requiring that 70% of revenues support newsroom journalists. Singer emphasized that “news publishers simply request a neutral arbitrator operating under the auspices of the state to hear their assessment of the annual value that platforms appropriate.”
The Chamber of Progress – a politically progressive tech industry advocacy group whose corporate partners include Google and Meta – conducted a study showing that Fox News and “disinformation media” would benefit most from such a “link tax.” They argue against this tax which they say would be harmful.
While there are concerns about how to distinguish between different types of companies (such as Google versus Facebook), supporters believe that the bill is necessary to prevent Big Tech from unfairly enriching themselves at the expense of journalists. As Assemblyman Bill Essayli put it, “I don’t believe in corporate welfare, I don’t believe in wealth transfer… But I don’t believe in unjust enrichment either. And I think Big Tech is unfairly enriching itself at the expense of journalists.”
The fate of AB 886 remains to be seen, but its progress through California’s legislative committees suggests that there is a growing momentum for holding Big Tech accountable for their use of news content. As per the report, a vote must occur before June 2.