California Senate committee introduces bill to make Google, Facebook and news firms pay for articles

A bipartisan bill that will require Google and Facebook to pay news firms whose articles appear on their platforms in an effort to assist the struggling media industry faced its first test within the state Senate on Tuesday night when it passed the Judiciary Committee by a vote of 9-2.

If the Senate approves the bill and it becomes law, Google and Facebook would either must conform to pay agreed-upon annual flat fees right into a fund for news organizations or they’d be forced into mediation or arbitration to barter payment of a share of their digital promoting revenue.

“News outlets have been downsizing or closing at an alarming rate,” Rep. Buffy Wicks, an Oakland Democrat who introduced the California Journalism Preservation Act, said at Tuesday's hearing. As news moved online and major web platforms gained wide reach, publishers were forced to permit their content on the platforms without receiving “little to no compensation,” she said.

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

Supporters include quite a lot of news publishers and organizations, including the California Broadcasters Association and the California News Publishers Association, of which the Bay Area News Group is a member.

“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 quality journalism is necessary.”

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

Jaffer Zaidi, Google's vice chairman of worldwide news partnerships, argued to the committee that the bill relies on a “flawed premise” that web platforms harvest news for profit without compensation. Google Search sends “billions of visits” to the web sites of reports publishers of all sizes day-after-day, providing them with “valuable free traffic,” Zaidi said.

Jeff Jarvis, a retired journalism professor who wrote a report on the bill for one among its foremost critics, the California Chamber of Commerce, told the committee on Tuesday that he feared it could profit national media conglomerates, hedge funds that own newspapers and “extremist and propaganda media outlets.” The bill is probably going unconstitutional, he said, calling it “a tax on reading.”

Chamber of Progress, a gaggle backed by Google, Facebook and other major technology firms, cited Canada for example of potential consequences of the bill. Many publishers north of the border lost traffic when Meta stopped posting news on Canada's Facebook within the face of such a law. Smaller publishers could be hit hardest, the group said.

Meta, the achieved sales of 135 billion US dollars last 12 months, reiterated an earlier threat on Tuesday that it could be “forced to make the business decision to end the availability of news in California” if the bill passed. “The vast majority of people do not come to Facebook and Instagram to seek news and political content,” Meta said in a press release, describing the news on its platforms as “something that does not generate meaningful value for our users or our business.”

Google, the The parent company Alphabet generated 273 billion dollars Google, which had $1.5 billion in revenue last 12 months, also threatened to dam news in Canada but later agreed to pay publishers $73 million a 12 months. However, payments haven’t yet been made. 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 study in November estimating that Google's revenue from news media search results is $21 billion a 12 months. Meta generates nearly $4 billion annually from news in U.S. Facebook feeds. The researchers said.

Supporters of the bill argue that the platforms exploit publishers' have to be represented in search results and news feeds “and refuse to negotiate a fair division of advertising revenue to which both parties contribute,” in response to an evaluation of the bill.

The damage to local media from the “strip mining” of firms like Alphabet, the parent company of Google (with a market value of $2.3 trillion), and Meta, the parent company of Facebook (with a market value of $1.3 trillion), is hitting traditional news organizations, smaller nonprofit media outlets and modern digital media startups, says Matt Pearce, president of the Media Guild of the West.

Martha Diaz Aszkenazy, publisher of the San Fernando Valley Sun, testified that media outlets like hers would perish if the state legislature didn’t act.

“These tech giants are exploiting local publishers by taking our content and making it available to their own users,” Aszkenazy said. “They are directly responsible for the death of local news across the state and country.”

Supporters of the bill argue that recent changes, including basing remuneration on the variety of journalists employed reasonably than the variety of online clicks, in addition to targeted funding and greater flexibility in spending for smaller publishers, would help make sure the broadest possible advantages.

The bill, which Wicks calls a “work in progress,” goes next to the Senate Budget Committee. If it passes that committee and survives a vote within the Senate, it is going to must be sent back to the Assembly for a “consent vote” for substantive changes before it makes it to Gov. Gavin Newsom's desk. The governor's office didn’t reply to questions from this news organization Tuesday about his opinion on the bill.

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