(TNS) A bipartisan bill to help the struggling media industry by requiring Google and Facebook to pay news companies whose articles appear on their platforms faced its first test Tuesday night when it passed the state Senate Judiciary Committee on a 9-2 vote.
If approved by the Senate and signed into law, Google and Facebook would be forced to agree to pay a negotiated lump sum annual fee to the news organization fund or enter into arbitration or mediation to negotiate a cut of their digital advertising revenues.
“News organizations are downsizing and closing at an alarming rate,” Rep. Buffy Wicks, an Oakland Democrat who introduced the California Journalism Protection Bill, said at a hearing on Tuesday. As news moved online and major internet platforms gained widespread reach, the situation forced publishers to put their content on the platforms “with little or no compensation,” Wicks said.
The bill, AB 886, was co-authored by Republican Rep. Bill Essari of Riverside and Democratic Rep. Josh Lowenthal of Long Beach and passed the state Assembly in June 2023.
Supporters include numerous news publishers and organizations, including the California Association of Broadcasters, of which Bay Area News Group is a member, and the California News Publishers Association.
“This is critical to the future of our industry and our democracy,” said Britney Barsotti, an attorney for the California Newspaper Publishers Association. “There is too much misinformation and polarization out there, and quality journalism is essential.”
Opponents include Google and Facebook, as well as the American Civil Liberties Union of California (ACLU), the California Taxpayers Association, the Electronic Frontier Foundation and several online news organizations, including CalMatters.
Jaffer Zaidi, Google's vice president of global news partnerships, told the committee that the bill is based on the “false premise” that internet platforms obtain news for profit without compensation. Zaidi said Google Search sends “billions of visits” to the websites of news publishers of all sizes every day, giving them “valuable free traffic.”
Jeff Jarvis, a former journalism professor who wrote a report on the bill for the California Chamber of Commerce, one of the bill's main critics, told the committee on Tuesday he was concerned the bill would benefit national media conglomerates, hedge funds that own newspapers and “the extremist and propaganda media.” He called the bill likely unconstitutional and a “tax on reading.”
The Chamber of Progress, a group backed by Google, Facebook and other big tech companies, cited Canada as an example of the bill's potential impact, because Meta, faced with the bill, stopped publishing news on Facebook in Canada, causing many publishers north of the border to lose traffic. Smaller media outlets are being hit the hardest, the group said.
Meta, which had revenue of $135 billion last year, repeated its earlier warning on Tuesday that if the bill passes, it “will be forced to make the business decision to end news distribution in California.” “The majority of people don't come to Facebook or Instagram for news or political content,” Meta said in a statement, saying news on its platforms “does not add significant value to our users or our business.”
Google, which generated $273 billion in revenue for parent company Alphabet last year, also threatened to block news in Canada, but then agreed to pay publishers $73 million a year. The payment has yet to be made. In April, Google removed news links for some consumers in response to AB 886.
Researchers from Columbia University and the University of Houston published a paper in November estimating that Google makes $21 billion a year from news search results. Meta rakes in nearly $4 billion a year from news in Facebook feeds in the U.S., the researchers said.
Supporters of the bill argue that the platforms are taking advantage of publishers' desire to appear in search results and news feeds and “refusing to negotiate a fair share of the advertising revenue that both sides contribute,” a legislative analysis said.
The damage to local media from “strip mining” by companies like Google parent Alphabet, which has a market capitalization of $2.3 trillion, and Facebook parent Meta, which has a market capitalization of $1.3 trillion, is hurting traditional news companies, small nonprofit media outlets and innovative digital media startups, said Matt Pierce, president of the Media Guild of the West.
San Fernando Valley Sun Publisher Martha Diaz Askenagy testified that newspapers like hers will go out of business if the Legislature doesn't act.
“These tech giants exploit local publishers by taking our content and making it available to their own users,” Azkenazi said. “They are directly responsible for the disappearance of local news across our state and country.”
Supporters of the bill argue that recent changes, including basing payments on the number of journalists employed rather than the number of online clicks, as well as dedicated funding for small publishers and greater spending flexibility, will ensure the broadest range of benefits.
The bill, which Wicks described as a “work in progress,” next heads to the state Senate Appropriations Committee. If it passes that committee and also passes a vote in the Senate, it would go back to the state Assembly for a “concurrence” vote because it has significant changes, and then go to Gov. Gavin Newsom. The governor's office did not respond to a request from this news organization on Tuesday for its position on the bill.
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