Under a proposed California law attempting to save local journalism, big tech firms like Google and Meta may soon be required to pay media organizations for posting and using their news content.
Bipartisan backing helped the bill pass Tuesday’s critical Assembly Judiciary Committee hearing. If it becomes law, Google and Meta must divide their advertising revenue from news and other reported material with California media companies.
An arbitration procedure would be used to decide the sum.
The bill’s proponents said it would act as a “lifeline” for regional media outlets whose advertising earnings have plummeted in digital media.
Trade associations and specific press organizations were among the legislation’s detractors who claimed it would amount to an unprecedented mandate and violate the First Amendment.
According to the proposed legislation, local news organizations must receive at least 70% of their earnings to assist in covering the salaries of reporters.
Additionally, big tech firms would be prohibited from ostracizing news organizations by removing their content from their platforms in retaliation for charging a fee.
Assemblymember Buffy Wicks of Oakland, the bill’s creator, said during the hearing on Tuesday that “community news outlets have been downsized and closing at an alarming rate” as news consumption has shifted online.
The Democrat claimed over 100 news organizations had left California in the last ten years.
She noted that her bill is supported by significant journalism unions like the News Media Alliance and Media Guild of the West, representing The Los Angeles Times and other newsrooms.
“The dominant type platforms, both search engines and social networks, have such unrivaled market power that newsrooms are coerced to share the content they produce, which tech companies sell advertising against for almost no compensation in return,” she said.
However, opponents of the legislation claimed that because it requires online platforms to publish content from all news organizations, the law is unconstitutional.
According to a spokesman of the Electronic Frontier Foundation, it would also encourage clickbait content and restrict Google’s and Meta’s capacity to combat misinformation on their platforms because it might be interpreted as revenge.
The bill is “fundamentally flawed” and wasn’t crafted with tiny newsrooms in mind, said Chris Krewson, executive director of LION Publishers, a national news organization representing more than 450 independent newsrooms.
He said the plan would primarily help media conglomerates and hedge funds that have decimated local newsrooms over the past three decades.
His association represents over 50 local newsrooms in California, 80% employing five or fewer journalists. He said most of those news organizations wouldn’t qualify for the benefits.
In an interview on Tuesday, Krewson said, “I applaud the lawmaker for getting bipartisan support on this.” However, this is outdated.
LION Publishers has received at least $1 million in funding from Meta over the past two years, but Krewson insisted he isn’t advocating on the tech company’s behalf.
Attempts to support regional news organizations have been made in several countries, including the United States, Australia, and Canada, with varying degrees of success.
Australia passed a law in 2021 that led to $140 million in payments from Google and Facebook to news organizations last year.
Similar initiatives are being pushed for in the United States as well. In March, a bill previously introduced but rejected by Congress would have allowed news organizations to bargain an advertising rate with tech behemoths like Google.