Will CA force Big Tech to pay news organizations for co-opting content?

With news organizations nationwide struggling to stay afloat, Assemblywoman Buffy Wicks (D) has proposed legislation to force Big Tech companies to compensate newspapers and other news outlets for the content they aggregate and use to attract advertising dollars.

Assembly Bill 886, known as the California Journalism Preservation Act, would require large, digital platforms like Facebook and Google to enter into binding arbitration with digital journalism providers to determine an appropriate percentage of the platforms’ advertising revenue, which would be paid to the news organizations for using their content.

The idea is to make Big Tech companies pay journalism organizations for the content they repurpose to help generate advertising revenue – a dynamic that has been undercutting the bottom lines of news outlets for years, leading, at least in part, to numerous newspapers and other news organizations closing across the nation.

Platforms like Facebook aggregate news content, which draws eyeballs and, in turn, generates advertising revenue for the social media giant. News organizations producing that content, however, don’t see any pageviews (and, in turn, revenue) unless a Facebook user actually clicks on a link to the outlets’ stories.

“When I ran for office, there was very little news coverage of it,” said Wicks, a Democrat from Oakland. “For me it was a little bit of a wakeup call: What’s happening to our newsrooms?”

Unsurprisingly, AB 886 is popular with some California news organizations. The Santa Rosa Press Democrat ran an editorial in support of the bill in late March, saying, “These are dire times for the local free press. Since 2004, at least a quarter of California newspapers have closed. Nationally, newspaper revenue is down about half, and newspapers employ less than half as many journalists as they did 15 years ago.”

Congress has considered, but failed to pass, legislation similar to AB 886. “When the United States fails to act on critical challenges, California often goes it alone,” the Press Democrat editorialized. “The state is a national leader combating climate change, providing sanctuary for migrants, preserving environmental treasures and protecting abortion rights. State lawmakers should take the lead again by passing a bill to support the local free press.”

The idea is to make Big Tech companies pay journalism organizations for the content they repurpose to help generate advertising revenue – a dynamic that has been undercutting the bottom lines of news outlets for years.

The California News Publishers Association, a co-sponsor of the bill, uses even loftier rhetoric in voicing its support: “AB 886 goes to the heart of our democracy. The framers of the US Constitution understood that a government of, for and by the people requires an informed citizenry. There is no enterprise that is more important to this precept than a free and vibrant press.

“But as news consumption shifts to digital sources, news outlets, especially small local ones, are shuttering at alarming rates as revenues decline and costs rise. California has lost over 100 newspapers in the last decade. We are at a moment in history when credible information is critical and when, according to Pew Research, 81 percent of Americans rely on local media to keep them informed. When local newspapers shutter, civic engagement goes down, corruption goes up, and the ability to combat disinformation erodes further.”

Big Tech, however, isn’t a fan of the proposal. The Computer and Communications Industry Association, whose members include Amazon, Apple, Google, Meta (the owner of Facebook), Twitter, Yahoo! and Uber, recently denounced AB 886 as “a bill that would tax links based on internet search inquiries.”

“CCIA understands and supports the vital role of trustworthy news sources in a thriving democracy,” CCIA President Matt Schruers said in a prepared statement. “However, proposals to create a link tax would create more problems than they solve. Requiring a fee to send internet traffic from one site to another is not a sustainable business model for digital companies or news outlets. The internet is navigated through links. It is concerning to give whatever political party is in power the ability to decide which group should pay another as users roam online.

“This approach would entrench incumbent publishers and lead to greater media concentration, and could financially reward the spread of misinformation and incentivize ‘clickbait.’”

AB 886 opponents also include some news outlets and their representatives, including CalMatters, Local Independent Online News Publishers INC. or LION Publishers, Lookout Santa Cruz and the National Newspaper Publishers Association. There’s reportedly a growing concern among smaller and locally oriented news outlets that AB 886 would not benefit them.

Critics also have said AB 886 would benefit large, national news organizations that spread disinformation, like Fox News and Newsmax.

Wicks said she expects to make future amendments to the bill to address concerns.

AB 886 was approved by the Assembly Committee on Privacy and Consumer Protection on a 9-0 vote on April 25. It was approved by the Assembly Committee on the Judiciary on a 10-0 vote on May 2. It now awaits action on the Assembly floor.

“A free and diverse press is the backbone of a healthy democracy,” Wicks said in explaining why she’s authoring the bill.