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California proposes bill making internet giants pay for news

by Cristiano Lima and David DiMolfetta The Washington Post | March 26, 2023 at 2:00 a.m.

California lawmakers are launching a plan to force digital giants like Facebook and Google to pay publishers for news content, taking a contentious global fight to the state level.

Last week, California Assembly member Buffy Wicks, D-Oakland, announced legislation to require large tech companies to pay a "journalism usage fee" whenever they run digital ads next to news content, such as articles, while making publishers reinvest in journalism jobs.

The California Journalism Competition and Preservation Act resembles a separate bitterly contested federal bill that would allow publishers to jointly bargain content distribution terms with the tech giants.

News industry leaders said the California bill is the first of its kind at the state level -- and that it could ignite another major standoff between Silicon Valley and media groups.

A slew of countries have considered or advanced proposals in recent years aimed at forcing tech companies to share more of their advertising revenue with traditional publishers, who for years have lost ground to giants like Facebook parent Meta and Google on digital ads.

But the efforts have faced immense blowback from the digital ads behemoths, who at times have threatened to remove news content from entire countries if their policymakers moved ahead with what they called ill-advised and counterproductive news bills.

When U.S. lawmakers considered including a federal proposal in a sprawling spending bill last year, Meta said it would "consider removing news from our platform" if lawmakers moved ahead. Spokesman Andy Stone said at the time the bill would submit the company to "government-mandated negotiations that unfairly disregard any value we provide to news outlets."

Earlier this year, Google said it was blocking news content in its search engine in Canada for some users as it tested responses to a proposal to force companies to pay media outlets when they use their story links. The companies issued similar threats in response to new rules in Australia.

Meta and Google declined to comment on the Wicks proposal.

Danielle Coffey, executive vice president of the News Media Alliance trade group, said she expects U.S. states to face similar ultimatums if they advance their own measures.

"They did it in Australia. They did it here in Washington, D.C. I absolutely expect them to threaten to deprive U.S. users of news because of their reluctance to pay for it," said Coffey, whose group represents newspapers and media organizations.

The Washington Post is a member of the News Media Alliance. Post spokesperson Shani George previously said in an email that the company is "aware" of the New Media Alliance's efforts around the federal legislation but has "not taken a public stance."

Coffey said that while the California measure is the first time state officials have introduced legislation mirroring the federal bill, led by Sen. Amy Klobuchar, D-Minn., and Rep. David Cicilline, D-R.I., other local leaders around the country "are watching and interested."

The California measure is already facing industry pushback. NetChoice, a tech trade group that counts Meta, Google and Amazon as members, railed against the measure in a statement to The Washington Post.

"It's unfortunate but unsurprising to see California copying failed proposals from the federal government and enacting them in their own state," said Carl Szabo, NetChoice vice president. He added that the bill would "harm free speech online by creating a special class of government-preferred media."

Amazon founder Jeff Bezos owns The Washington Post.

But Wicks, who last year led a successful push to pass new safety protections for children online over industry objections, said she's unfazed by the prospect of industry backlash. "I have no plans to back away from my bill on that basis," she told The Washington Post.

Klobuchar, who said she will "soon" reintroduce the federal measure, said states acting could spur movement on Capitol Hill."Perhaps proposals and actions in multiple states will make the companies stop throwing millions of dollars against our very reasonable federal bill," she said. "That may be the one way we can get Washington politicians to act."

Print Headline: California proposes bill making internet giants pay for news


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