California Advances Legislation Requiring Tech Companies To Pay For News

Lawmakers in the California Assembly passed a bill that would require large tech companies like Google and Meta to pay a “usage fee” for displaying news articles.

The California Journalism Preservation Act (AB 886), which Assembly members passed by a 46-6 vote, would force tech platforms to pay online publishers a percentage of ad revenue attributable to their material. The specific percentage would be determined through an arbitration process. Online publishers that receive the usage fees would be required to spend at least 70% of that money on journalists and support staff.

The bill now heads to the state Senate, which is expected to amend the measure. Assembly member Buffy Wicks (D-Oakland), who introduced the bill in March, indicated before the vote that she anticipates revisions.

The Assembly's vote to advance the bill came one day after Meta threatened to pull news from its sites.

“If the Journalism Preservation Act passes, we will be forced to remove news from Facebook and Instagram rather than pay into a slush fund that primarily benefits big, out-of-state media companies under the guise of aiding California publishers,” Meta spokesperson Andy Stone said in a Twitter post. “The bill fails to recognize that publishers and broadcasters put their content on our platform themselves and that substantial consolidation in California's local news industry came over 15 years ago, well before Facebook was widely used.”

Last month the tech-industry funded policy group Chamber of Progress, which opposes the bill, said a study it conducted showed that Fox News would be one of the biggest beneficiaries of the law.

The News/Media Alliance, which supports the bill, cheered news of the Assembly's vote.

“Currently, creators of journalistic and creative content are not adequately compensated for the use of their work that takes a tremendous investment to produce,” the group stated Thursday afternoon. The organization added that the bill will “promote the hiring of more journalists.”

In April, Senators Amy Klobuchar (D-Minnesota) and John Kennedy (R-Louisiana) reintroduced a federal bill that also could result in large tech platforms paying news publishers. That measure, the Journalism Competition and Preservation Act, would grant an antitrust exemption to news organizations with fewer than 1,500 employees, in order to allow those groups to hold talks with online platforms.

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