Bill to force Google and Meta to pay for news enters notorious political battleground

A bill that would require Google and Facebook to pay publishers for the news presented on their platforms faces a crucial test on Thursday in a state government meeting room that is notorious as a killing ground for future laws.

U.S. Assembly Bill 886 would force the tech giants to pay agreed-upon annual flat fees into a fund for news organizations, or force them into mediation or arbitration to negotiate how to pay media companies a share of their digital ad revenue.

On Thursday, the bill, called the California Journalism Preservation Act and introduced by East Bay state Rep. Buffy Wicks, will be considered in the Senate Budget Committee's biannual “suspense file” hearing, a secretive process that could see AB 886 caught up in the bloodbath that is thinning out hundreds of pending bills ahead of the annual Aug. 31 deadline for passage.

“Typically, bills that go into limbo are put into limbo to die,” said David McCuan, a political scientist at Sonoma State University who has been tracking the bill. Although most bills that go into limbo die there, the fate of AB 886 remains uncertain, McCuan believes, and the bill's status could be “more a matter of pause and consideration than rejection.”

Lawmakers and parties involved in the process – including technology industry lobbyists, news publishers and digital media start-ups – are currently negotiating a possible solution that could include an amended version of the bill or a compensation agreement without a new law.

Big tech companies could offer a non-legislative solution that would provide money to news organizations, said Robert Singleton, regional director of policy and public affairs for the Chamber of Progress, a lobbying group that represents Google, Meta and other tech companies. “I think there will be some sort of agreement for financial support for journalism in the state of California,” Singleton said.

However, the California News Publishers Association said legislation was needed to ensure that technology platforms comply with any agreements to compensate news organizations.

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

Wicks, whose office cited the negotiations on Wednesday in declining to comment on the bill, pointed out at a hearing in June that news organizations have been “downsized and shuttered at an alarming rate.” As news moved online and major internet platforms gained wide reach, publishers were forced to allow their content on the platforms without receiving “little to no compensation,” Wicks said.

Since 2005, more than 2,500 newspapers have closed in the United States, according to Northwestern University's Medill School of Journalism. In California, more than 100 newspaper companies have been lost in the last decade, Wicks said.

At the June hearing, Jaffer Zaidi, Google's vice president of global news partnerships, argued that the bill was based on the “flawed premise” that internet platforms harvest news for profit without compensation. Google Search sends “billions of visits” to the websites of news publishers of all sizes every day, providing them with “valuable free traffic,” Zaidi said.

The changes to the bill show that the parties have come closer so that legislation or an agreement is possible, but time is running out, McCuan said. Political horse-trading between lawmakers and the governor's office could lead to the bill being sacrificed, he said.

Or AB 886 could be defeated on orders from above, McCuan said. Newsom would have to sign the bill for it to become law, and although the tech companies are “right up there,” along with the tobacco companies and the oil companies, as far as “big, bad bogeymen” go, a blow to Silicon Valley, especially in an election year, might not sit well with him, McCuan said.

“He doesn’t want to have to make that call,” McCuan said.

A spokesman for Newsom said Wednesday that he would “evaluate this bill on its merits should it land on his desk.”

If AB 886 does not survive the preliminary hearing, the political will shown to get Google and Meta to pay for news in California could prompt new attempts to create legislation, McCuan said.

“It may take a little more time to figure out which model is right for the legislation to move forward,” McCuan said.

Researchers at Columbia University and the University of Houston published a study in November estimating that Google's revenue from search results in news media is $21 billion a year. Meta generates almost $4 billion a year from news from U.S. Facebook feeds, the researchers said.

The Computer and Communications Industry Association, which represents Google, Meta and other tech giants, has taken out eye-catching ads claiming that AB 886 would subsidize “national and global media companies.” Singleton said traditional media outlets have fallen victim to the changing media landscape, but new, digital news startups are succeeding, including a Pulitzer Prize for Lookout Santa Cruz.

“Those who are more nimble and flexible,” Singleton said, “have been able to adapt.”

The general counsel for the California News Publishers Association – of which the news organization is a member – pointed out that a federal judge ruled last week that Google has an illegal monopoly on Internet search.

“A large portion of search results are news stories: typically 40 to 60 percent,” said Brittney Barsotti. “They provide users with accurate information by crawling and scraping news content, and we are not compensated for that.”

“The decline in advertising revenue – which has been passed directly onto the platforms – is playing a major role in the news industry's struggle. If lawmakers don't act now, there will be no more news publications.”

Originally published: August 14, 2024 at 16:19