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The East Bay state legislature’s bill aims to get Big Tech to pay publishers for news

Newsrooms across the country have atrophied while the stories they produce at great expense enrich big tech companies that pay nothing to share them on their platforms. Despite bipartisan support, attempts to get these companies to share advertising dollars with news publishers have stalled in Congress.

Now an East Bay California lawmaker is moving forward with a state-only bill that would achieve the same goal with a different approach.

“California has lost more than 100 newspapers in the last decade,” said Rep. Buffy Wicks, an Oakland Democrat who plans to introduce the California Journalism Protection Act next week. “Our founders understood the importance of a free press. And when you have an ecosystem where there is no level playing field and newspapers are being shut down left and right, that worries me from a democratic perspective.”

According to the California News Publishers Association, which supports Wick’s AB 886 bill and of which the Bay Area News Group is a part, 52% of California residents get their news from Facebook and 49% from Google. These two Silicon Valley companies — divisions of Meta Platforms and Alphabet Inc. respectively — gobble up 60% of all digital advertising dollars thanks to their ability to collect consumer data.

Wick’s account finds that newspaper advertising has declined 66 percent over the past 10 years and editorial staff has shrunk by 44 percent.

Her bill follows the collapse of a similar Journalism Competition and Preservation Act in Congress in December, a bill sponsored by US Senators Amy Klobuchar, a Minnesota Democrat, and John Kennedy, a Louisiana Republican.

The federal bill would have waived antitrust restrictions, allowing news publishers to jointly negotiate revenue-sharing agreements with platform content providers like Facebook and Google. Similar laws have been introduced abroad in Spain and Australia, where they are known as “connection taxes”.

But the bipartisan support — a rarity in today’s era of political divisions — wasn’t enough to assuage concerns not just from Google and Facebook, but from groups ranging from the American Civil Liberties Union to the Cato Institute.

Critics argued that the federal law would prop up legacy media companies while discouraging competition from smaller, more innovative news outlets. The ACLU argued that the tech companies could potentially be forced to share material on their websites that violates their standards.

Wicks’ California bill takes a different approach. Because states can’t make exceptions to federal antitrust laws, Wick’s bill would require tech platforms to directly compensate publishers with a “journalism royalty” based on the amount of advertising revenue the platform earns from displaying a publication’s content receives.

“This ensures that any publisher producing California news content, regardless of size, will be fairly compensated when Big Tech uses their content,” said Brittney Barsotti, CNPA general counsel.

The proposed legislation “allows print, broadcast or digital news companies to secure fair compensation for their journalism and helps divert the flow of subscription and advertising dollars back to small and ethnic publishers who pay the production costs,” he said Barsotti.

What the formula for compensating news publishers would be, Wicks said, is “what we have to find out through the political process.”

Wicks also addresses another argument against the federal law, namely that it would increase profits for owners of large news organizations without putting more money into their newsrooms. Their bill would require news publishers to spend 70% of the revenue they receive under the regulations on journalists and news production.

The bill would apply to online platforms with at least 50 million monthly active US users or more than $550 billion in annual net revenue or market cap. It prohibits these platforms from retaliating against publishers who seek compensation under the law by suppressing links to or refusing to provide their news content.

Danielle Coffey, executive vice president and general counsel of the News Media Alliance, which represents 2,000 news outlets worldwide, said similar legislation overseas is already yielding results, with newsrooms growing by 30% in some cases.

“It absolutely worked,” Coffey said. “It’s in these areas that newsrooms are healthier.”

It is unknown if the state law will be sufficient to overcome the expected resistance. Facebook and Google did not respond to requests for comment.

But Wicks said that while California is home to the tech industry and “a big part of our economy,” the state has also been at the forefront of key winning regulations, particularly on privacy, which the industry has strongly opposed.

“Politically,” Wicks said, “I think we have a chance.”