California Senate committee advances bill requiring Google and Facebook to pay news companies for their stories

A bipartisan bill to force Google and Facebook to pay news companies whose stories appear on their platforms to help the struggling media industry faced its first test in the state Senate Tuesday night when it was adopted by 9 votes to 2 before the Judiciary Committee.

If approved by the Senate and signed into law, Google and Facebook would either have to agree to pay a negotiated flat annual fee to a media fund or be forced into mediation or arbitration to negotiate payment of a share of their digital income. advertising revenue.

“News outlets have been downsizing and closing at an alarming rate,” Rep. Buffy Wicks, an Oakland Democrat who introduced California’s Journalism Preservation Act, said at Tuesday’s hearing. As information moved online and major internet platforms gained reach, publishers were forced by circumstance to license their content onto the platforms, she said, with “little or no compensation”.

The bill, AB 886, co-authored by Assemblymembers Bill Essayli, a Republican from Riverside, and Josh Lowenthal, a Democrat from Long Beach, was passed by the State Assembly in June 2023 .

Supporters include a number of publishers and news organizations, including the California Broadcasters Association and the California News Publishers Association, to which the Bay Area News Group belongs.

“This is critical to the future of our industry and our democracy,” said Brittney Barsotti, attorney for the California News Publishers Association. “There is so much misinformation and polarization that there is a need for quality journalism.”

In addition to Google and Facebook, opponents include the ACLU of California, the California Taxpayers Association, the Electronic Frontier Foundation and some online news organizations, including CalMatters.

Jaffer Zaidi, Google’s vice president of global information partnerships, argued before the committee that the bill was based on a “false premise” that internet platforms capture information for profit, without compensation. Google Search sends “billions of hits” daily to the websites of news publishers of all sizes, providing them with “free, valuable traffic,” Zaidi said.

Jeff Jarvis, a retired journalism professor who wrote a report on the bill for one of its main critics, the California Chamber of Commerce, told the committee Tuesday that he was concerned it would benefit national media conglomerates, hedge funds that own newspapers, and “extremists and propaganda media.” The bill is likely unconstitutional, he said, calling it a “tax on reading.”

Chamber of Progress, a group backed by Google, Facebook and other big tech companies, cited Canada as an example of the bill’s potential fallout, after many publishers north of the border lost traffic when Meta, faced with such a law, stopped broadcasting news on Canadian Facebook. Smaller outlets have been hit hardest, according to the group.

Meta, which generated $135 billion in revenue last year, reiterated its previous threat Tuesday that it would be “forced to make the business decision to end the availability of information in California” if the bill was passed. adopted. “The vast majority of people do not come to Facebook and Instagram for news and political content,” Meta said in a statement, calling the information on its platforms “something that does not generate significant value for our users or our company”.

Google, which brought in $273 billion in revenue for its parent company Alphabet last year, also threatened to block news in Canada but then agreed to pay publishers $73 million a year, payments not has not yet taken place. In April, Google responded to AB 886 by removing news links for some consumers.

Researchers at Columbia University and the University of Houston published a paper in November estimating that Google’s revenue from news media search results was $21 billion a year. Meta collects nearly $4 billion a year from information posted on U.S. Facebook feeds, researchers said.

Supporters of the bill argue that the platforms take advantage of publishers’ need to be present in search results and news feeds “and refuse to negotiate a fair distribution of advertising revenue to which both parties contribute,” according to a legislative analysis.

The damage done to local media by strip mining by companies like Alphabet, Google’s parent company, worth $2.3 trillion, and Meta, Facebook’s parent company, worth $1 $300 billion, hitting traditional news companies, small nonprofit media outlets and innovative digital media startups. , said Matt Pearce, president of the Media Guild of the West.

Martha Diaz Aszkenazy, publisher of the San Fernando Valley Sun, said media outlets like hers would go out of business if the state Legislature didn’t act.

“These tech giants are exploiting local publishers by using our content and providing it to their own users,” Aszkenazy said. “It’s directly responsible for the death of local news across the state and country.”

Supporters of the bill say recent amendments, including basing payments on the number of journalists employed rather than online clicks, as well as dedicated funding and greater spending flexibility for smaller publishers , will help ensure the broadest benefits.

The bill, described by Wicks as a “work in progress,” will next go to the state Senate Appropriations Committee. If it makes it out of that committee and survives a Senate vote, it must return to the Assembly for a “concurrency” vote due to substantive revisions, before heading to Gov. Gavin Newsom’s desk. The governor’s office did not respond to questions from this news organization Tuesday about its views on the bill.

California Daily Newspapers

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