Meta, formerly known as Facebookis threatening to block California users from sharing news articles on their social networks in protest of a state legislative proposal that would require tech companies to pay publishers for their content. The proposed Journalism Preservation Act aims to boost the struggling news industry by requiring social media platforms to negotiate deals with news outlets for content shared on their platforms. Meta’s response reflects its opposition to similar proposals around the world, including Australia and Canada, where it has threatened to pull news from its platforms.
Traditional news publishers have lost key sources of revenue over the years, while tech companies like Facebook and Google have become major beneficiaries of the digital advertising market. Media advocates argue that these companies are profiting from content paid for by the media and should share more of their revenue with publishers. However, tech companies oppose such proposals, saying they do not take into account the value that their platforms provide to the media by distributing their content.
The California bill requires big tech companies to pay a “news usage fee” each time they run ads alongside news content and would require publishers to spend most of the money they receive through the law on hiring and retaining journalists. Meta spokesman Andy Stone said in a tweet that the bill would primarily benefit out-of-state media companies “under the guise of helping California publishers.” The bill is sponsored by Assemblywoman Buffy Wicks (D-Oakland), who has proposed a series of bills targeting tech giants.
If California enacts the law and Meta follows through on its threat, it would be the first time the company has blocked news content in the US. According to analysts covering social media for analytics firm Insider Intelligence, banning publisher content would be a lose-lose situation for Facebook and publishers alike as news feeds drive engagement for Facebook in particular which drives ad dollars.
The Meta threat comes at a time when both internet platforms and media outlets are facing economic vulnerability due to rising inflation, Apple’s new privacy rules, slowing demand for e-commerce products, and intensifying competition in the social media market. Meta has cut more than 20,000 jobs, and CEO Mark Zuckerberg has warned that the company may face tough economic challenges for years to come.
Bottom line, the proposed Journalism Preservation Act is an attempt to address the imbalance between traditional news publishers and tech companies like Facebook and Google. While Meta’s threat to block news content in California is a scare tactic, it highlights the ongoing struggle between these two industries. It remains to be seen whether California will enact this law and if Meta will follow through on its threat.