California Proposes Bill Requiring Big Tech to Share Ad Revenue with Local News Companies
As news consumption has shifted online, local news companies have struggled to stay afloat. In the past decade alone, more than 100 news organizations have closed in California, according to the bill’s author, Oakland Assemblywoman Buffy Wicks. In an effort to save local journalism, California has proposed a bill that would require big tech companies like Google and Meta to pay local news companies for their news and other reported content.
The proposed measure would require Google and Meta to share their ad revenue derived from news and other reported content with California media companies. The exact amount would be determined through an arbitration process, but the bill would require that at least 70% of the revenue go to local news organizations to help pay reporters’ salaries. Big tech companies would also be barred from retaliating against a news outlet for demanding a fee by excluding their content from the platforms.
The bill passed a major Assembly Judiciary Committee hearing on Tuesday with bipartisan support, but it’s not without its opponents. Trade groups and some news groups have criticized the legislation as an unconstitutional mandate that violates the First Amendment. The bill would require online platforms to publish content from all news organizations, which some critics say would reward clickbait content and limit the ability of Google and Meta to combat misinformation on their platforms.
Chris Krewson, the CEO of LION Publishers, a national news group that represents more than 450 independent newsrooms, said the bill is “fundamentally flawed” and was not written with small newsrooms in mind. Krewson’s group represents more than 50 local newsrooms in California, most of which have operations with five or fewer journalists and would not qualify for the revenue-share.
Similar efforts to bolster local news companies have been attempted in the United States, Australia, and Canada, among others, 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 that 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, but pointed to a statement it made to the US Congress in 2022 and another it made to the Canadian government this year when it threatened to remove all news content from its platform if the company had to pay for news. Google did not respond to an email seeking comment on the California bill.
Despite clearing another hurdle on Tuesday, questions remain about how the bill would be implemented. Some lawmakers pointed out that Meta’s Facebook and Google don’t work in the same way. Google pulls news websites and provides users with summaries of reported content, while Facebook displays content such as photos, videos, and articles to users based on their activities on the platform.
California’s bill may have a long way to go before it becomes a law, but it’s a sign that lawmakers are willing to take action to save local journalism. The hope is that revenue sharing will provide a lifeline to local news organizations that are struggling to stay afloat in the digital age. As the bill moves through the legislative process, it will be interesting to see how it evolves and whether it can alleviate the financial pressures facing local news companies.