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California Bill Would Make Big Tech Pay Publishers for News

Newsrooms across the country have withered while the stories they produce at great cost enrich big technology companies that pay little or nothing for sharing them on their platforms.

(TNS) — Newsrooms across the country have withered while the stories they produce at great cost enrich big technology companies that pay nothing for sharing them on their platforms. Despite bipartisan support, attempts to make those companies share ad dollars with news publishers have sputtered in Congress.

Now, a California lawmaker from the East Bay is pushing a bill — limited to this state — that would accomplish the same goal using a different approach.

"California has lost more than 100 newspapers in the last decade," said Assemblywoman Buffy Wicks, an Oakland Democrat, who plans to introduce the California Journalism Protection Act in the coming week. "Our constitutional founders understood the importance of a free press. And when you have an ecosystem where there's not a level playing field and newspapers are shutting down left and right, that concerns me from a democracy standpoint."

According the California News Publishers Association, which is sponsoring Wicks' bill, AB 886, and to which the Bay Area News Group belongs, 52% of California residents get their news through Facebook and 49% from Google. Those two Silicon Valley companies — divisions of Meta Platforms and Alphabet Inc., respectively — gobble 60% of all digital ad dollars thanks to their ability to collect consumer data.

Wicks' bill notes that newspaper advertising has fallen 66 percent and newsroom staffing has shrunk 44 percent over the last 10 years.

Her bill follows the December collapse of a similar Journalism Competition and Preservation Act in Congress, a bill carried by U.S. Senators Amy Klobuchar, a Minnesota Democrat, and John Kennedy, a Louisiana Republican.

The federal bill would have waived antitrust restrictions so news publishers could join in negotiating revenue-sharing agreements with platform content providers such as Facebook and Google. Similar laws have been introduced overseas in Spain and Australia where they are known as "link taxes."

But bipartisan support — a rarity in today's politically divisive moment — wasn't enough to overcome concerns not just from Google and Facebook, but from groups ranging from the American Civil Liberties Union to the Cato Institute.

Critics argued the federal bill would prop up legacy media companies while discouraging competition from smaller, more innovative news outlets. The ACLU argued that the tech companies could potentially be compelled to share material on their sites that violates their standards.

Wicks' California bill takes a different approach. Since states cannot carve out exemptions to federal antitrust law, Wicks' bill would require tech platforms to directly compensate publishers with a "journalism usage fee" based on the amount of advertising revenue the platform receives from displaying a publication's content.

"This will ensure that every publisher producing California news content, no matter the size, will be fairly compensated when Big Tech uses their content," said Brittney Barsotti, general counsel for the CNPA.

The proposed bill "allows print, broadcast, or digital news companies to secure fair compensation for their journalism and helps direct the flow of subscription and advertising dollars back to small and ethnic owned publishers who bear the costs of production," Barsotti said.

What the formula would be for compensating news publishers, Wicks said, is "what we'll have to figure out through the policy process."

Wicks also addresses another argument against the federal bill, that it would boost profits for owners of large news organizations without putting more money into their newsrooms. Her bill would require news publishers to spend 70% of the revenue they receive under its provisions on journalists and news production.

The bill would apply to online platforms with at least 50 million monthly U.S. active users or more than $550 billion in net annual sales or market capitalization. It prohibits those platforms from retaliating against publishers that seek compensation under the act by suppressing or refusing to provide links to their news content.

Danielle Coffey, executive vice president and general counsel for the News Media Alliance, which represents 2,000 news media outlets worldwide, said similar legislation overseas already is delivering results, with newsrooms in some cases growing 30%.

"It has absolutely worked," Coffey said. "Newsrooms are healthier in those areas."

It's unknown whether the state bill will be enough to overcome anticipated opposition. Facebook and Google did not respond to requests for comment.

But Wicks said that while California is the tech industry's home turf and it is "a big part of our economy," the state also has led the way on important successful regulation, notably on privacy, that the industry strongly opposed.

"Politically," Wicks said, "I think we have a shot."

© 2023 Silicon Valley, San Jose, Calif. Distributed by Tribune Content Agency, LLC.