Mark Zuckerberg, chief executive officer of Meta Platforms Inc., left, arrives at federal court in San Jose, California, US, on Tuesday, Dec. 20, 2022.
- California lawmakers advanced a bipartisan bill that would require Big Tech platforms to pay publishers for news they host, just a day after Meta threatened to remove news from Facebook and Instagram should the bill pass.
- The California Journalism Preservation Act, which passed out of the state Assembly 46-6, still needs to be approved by the state Senate and signed by Democratic Governor Gavin Newsom to become law.
- The current conflict between Meta and California lawmakers recalls a similar fight in Australia in 2021, when the government there sought to require online platforms to pay for news content.
California lawmakers advanced a bipartisan bill on Thursday that would require Big Tech platforms to pay publishers for news they host, just a day after Meta threatened to remove news from Facebook and Instagram should the bill pass.
The California Journalism Preservation Act, which passed out of the state Assembly 46-6, still needs to be approved by the state Senate and signed by Democratic Governor Gavin Newsom to become law. But if it makes it that far, it could create new challenges for tech platforms and possibly change the landscape of what information is available on social media sites in California versus the rest of the country.
"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 statement on Twitter Wednesday. "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."
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According to the text of the bill available on the state government website, the California legislation would require online platforms with at least 50 million monthly active U.S. users, a billion worldwide active users, or U.S. net annual sales or market cap over $550 billion, to pay a "usage fee" to eligible digital journalism providers who want it. Payments would be calculated based on the amount of each outlet's news products that the platform displayed or linked to. The parties would use an arbitration process to come up with the percentage of the platform's advertising revenue that would make up the usage fee.
Chamber of Progress, a trade group that counts Meta among its backers, criticized the bill's advancement. The coalition's CEO Adam Kovacevich said in a statement that "the CPJA is riddled with holes" and that the bill "includes a questionable arbitration process and supports hedge funds known for cutting news staff rather than hiring journalists.
"It's sad the Assembly is passing the buck to the Senate rather than fixing the bill's problems," he added.
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The News/Media Alliance, which represents over 2,000 media organizations, applauded the Assembly vote.
"We are extremely encouraged to see this progress at the state level, which shows that Americans understand the importance and value of journalism to keeping their communities safe and informed and holding those in power to account," News/Media Alliance President & CEO Danielle Coffey said in a statement. "We look forward to the CJPA moving on to the Senate and working with policymakers there to pass the CJPA and restore fairness and balance to the marketplace."
The California bill has similar aims to federal legislation that a bipartisan group of lawmakers attempted to advance last year. Tech companies also took issue with that bill, the Journalism Competition and Preservation Act, which would create a temporary safe harbor from antitrust laws for news publishers to collectively bargain revenue-sharing terms with tech giants that carry their products.
The current conflict between Meta and California lawmakers recalls a similar fight in Australia in 2021, when the government there sought to require online platforms to pay for news content. Days after restricting news pages in the country, Facebook reached an agreement with the government that led to a reversal of the company's policy. Facebook said at the time that the government "agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognize the value our platform provides to publishers relative to the value we receive from them."
WATCH: Australia slams Facebook's move to block news amid new media bill
