Facebook and Google want to kill this California bill. Here’s why they’re wrong | Opinion

A free press that reports the news and informs the public is a foundation of our democratic system. But the financial underpinnings of local journalism are increasingly at risk.

Newsrooms across the country are shrinking, and newspapers are disappearing at an alarming rate — in large part because major tech platforms can link to news stories and capture the resulting advertising dollars without paying for the journalism that adds value to their sites.

Assembly Bill 886 has drawn powerful opposition from tech giants such as Meta and Google because it could provide momentum in the U.S. and around the world for directing some advertising proceeds back to the actual creators of the news content that appears on the tech companies’ sites. Put simply, the legislation authored by Assemblymember Buffy Wicks, D-Oakland, would require Google and Facebook to pay a fee for the news on their platforms, allowing journalism providers to recoup their fair share of revenue for the news stories they produce.

With broad bipartisan support, AB 886 could have passed this year and, if signed into law by Gov. Gavin Newsom, there was a chance to start leveling the playing field in 2024 by compelling tech platforms to compensate news outlets for their content. Instead, the bill was put on hold until next year.

This was deeply disappointing because independent news outlets can’t wait. The financial losses that many media organizations have suffered in the digital era have been staggering, imperiling American news outlets large and small.

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Roughly 2,500 newspapers have shuttered across the country since 2005, according to a New York Times report. A U.S. Census Bureau survey showed that revenues for newspaper publishers have plummeted 50% since 2002. The Medill School of Journalism at Northwestern University reports that more than 360 newspapers have gone out of business since just before the start of the pandemic.

The fundamental issue is not a lack of public interest in the news. Rather, the internet has changed how readers find the news. Now, the majority of advertising revenues go to repositories of news and not the news outlets themselves. Companies such as Google can keep the reading public on their platform and capture the resulting revenue.

A threat to American journalism

This, more than anything, is the greatest existential threat to local journalism today.

AB 886 would create a path to sharing the revenues generated by original content. Under the measure, called the California Journalism Preservation Act, tech companies such as Google, Twitter, Facebook and Instagram would pay a “journalism usage fee” to news outlets for news content that appeared on their sites.

The process for tech platforms sharing advertising revenue with news outlets would be hammered out through arbitration.

AB 886 calls for a three-member panel of arbiters selected from the American Arbitration Association. The journalism providers and tech giants would share this expense, and the panel would identify what percentage of the platforms’ advertising revenues should be distributed among the journalism providers based on their respective levels of online traffic.

The Sacramento Bee’s parent company, McClatchy, which also publishes The Fresno Bee, The Modesto Bee, San Luis Obispo Tribune and Merced Sun-Star, is a member of the California News Publishers Association (CNPA), which supports AB 886. The bill is co-sponsored by CNPA, California Broadcasters Association and News/Media Alliance.

Australia and Canada have passed federal legislation with similar revenue-sharing processes.

The tech giants have responded with scare tactics and retaliatory threats. Google has said it would prevent Canadians from finding news about their own country on its search platform. Google searches result in about a third of journalism-related traffic tracked by some major news outlets. Facebook’s parent company also threatened to remove news content from its sites.

Google and Facebook used the same playbook in Australia but quickly backed down.

Here in California, Facebook’s parent company, Meta, made a similar threat as AB 886 advanced in the Legislature. Like lawmakers in Australia and Canada, legislative leaders in Sacramento pushed back against the intimidation tactics of Meta and Google.

“I will never cave to shameful bullying like this,” Wicks said. “Neither will my colleagues in the Legislature.”

AB 886 delayed

But then earlier this month, Wicks and Senate Judiciary Committee Chairman Tom Umberg, D-Santa Ana, agreed to a two-year path to continue working on AB 886, including an informational hearing this fall.

“This interim hearing underscores my commitment to protecting journalism, California journalists, and the access to a free and vibrant press that is essential to our democracy,” Umberg said. We hope he follows through.

The wordsmithing behind AB 886 is important and also pioneering because it would create an added layer of accountability. News outlets would have to publicly demonstrate that 70% of the proceeds received from tech platforms were invested in newsroom budgets, journalists and support staff — a consequential requirement that will ensure that the California Journalism Preservation Act lives up to its name.

It is not an exaggeration to say that the world is watching. Similar reforms are advancing in Switzerland, Indonesia, Brazil, South Africa and New Zealand, according to a recent report from the nonprofit Poynter Institute. In the U.S., the Journalism Competition and Preservation Act has gotten some traction in Congress but so far has fallen short of passage.

Limited corporate philanthropy from Google and Facebook to news outlets is not a substitute for steady compensation for original content based on quantitative metrics. Producing quality local journalism isn’t free. The question is how to fairly recover those costs so that news outlets can provide essential news and information, and the public can stay informed.

AB 886 is a sensible reshaping of the media market with a dose of sunshine on news outlets’ budgets so that local journalism can result in more local journalists.

California has long reveled in its legislative clout and its ability to reshape various industries with forward-looking standards — the state’s efforts to improve fuel efficiency in cars and transition to all-electric fleets are just one example. Now, with AB 886, California could become the first state in the nation to compel tech companies to pay news organizations for using their digital content.

Wicks said she agreed to press pause on the legislation “because getting this policy right is more important than getting it quick.” Now, she must make good on that promise and ensure that this delay doesn’t ultimately derail a much-needed measure with bipartisan support.

In the coming months, California lawmakers should seize the opportunity to lead the way on this issue by bolstering the free press and supporting an informed electorate. We urge the Legislature to pass AB 886 and Gov. Gavin Newsom to sign it into law.