ARTICLE
According to the California News Publishers Association (CNPA), as consumers increasingly turn to digital sources for their news, local newspapers and news outlets have suffered. CNPA reports that California has lost more than 100 newspapers in the last decade. While there are many complex causes for this decline, the author points to large social media platforms like Google and Meta (formerly Facebook) which display news content on their platform but who do not share advertising revenue generated from that content. The opponents of the bill dispute this characterization of the relationship between online platforms and news producers, and they point to other factors to explain the decline of local newspapers. To the supporters, this bill presents a question of basic fairness: if search engines and social media platforms generate billions of dollars by displaying news content, then they should share some of that revenue with those who produce the content. Opponents argue, among other things, that news producers not only consent to the display of content but that they want and actively seek display of their content on the platforms because it brings them more traffic. While both sides agree that digital journalism providers should be supported and compensated for their products, they disagree on the best mechanism for achieving this end. State Assembly bill — AB 886 (Wicks) is working its way through the California state legislature where supporters say could dramatically alter the economics of California journalism had its beginnings more than 8,000 miles away. For years, the Australian government and media watched newsrooms hemorrhage circulation, revenue and staff. At the same time, Facebook and Google linked to or displayed their work without paying anything for it. The response was The News Media Bargaining Code, which gives the Australian government the power to order digital platforms into arbitration with news organizations to negotiate fees for using their content. If supporters of Assembly Bill 886, the California Journalism Preservation Act, prevail, Google and Meta will have to do the same in the Golden State — paying potentially hundreds of millions of dollars to news outlets. According to the bill analysis from the Assembly Committee on Judiciary ARGUMENTS IN SUPPORT: News Media Alliance [Alliance], one of the bill’s three sponsors, believes that “AB 886 remedies a digital advertising injustice whereby Big Tech aggregates local news to the enrichment of their sites without bearing any of the costs that publishers incur to employ local journalists and gather and report news vital to their communities. It’s time for big tech to pay market value for the content they siphon from local print, digital and broadcast news publishers.” ARGUMENTS IN OPPOSITION: The Chamber of Progress (COP), a tech industry coalition, opposes AB 886 because it will “have the unintended consequence of eliminating the open access to information that our internet ecosystem currently provides.” In addition to this general concern, COP sets forth more specific concerns. First, it claims that this bill may violate federal copyright law by “charging platforms to link to news.” This “basic mechanism of the bill appears to create an ancillary copyright” that will expand “the rights of content owners beyond their traditional bounds in ways that may prove detrimental to the public interest.” According to the bill’s author, Assemblymember Wicks, “A free and diverse press is the backbone of a healthy and vibrant democracy. When newsrooms are full, the public reaps rewards.” Unfortunately, the author writes, “California has lost more than 100 newspapers in the last decade,”and this is at least in part due to “the fact that huge technology platforms like Google and Meta have coerced newsrooms to share the content they produce, which the platforms sell advertising against while providing little to no compensation in return.” This bill, therefore, “directs big tech platforms to pay publishers a usage fee each time they use local news content. In turn, the bill requires news publishers to invest 70% of the fee back into journalism jobs.” Assemblymember Wicks insists, “this measure will provide “a lifeline for news outlets by directing some of the revenue from ad dollars back to the print, digital and broadcast media that bear the entire cost of gathering and reporting news while tech platforms bear none.” AB 886 passed the Assembly with a 55-6 vote on June 1. Ironically 19 members of the Assembly did not vote on the legislation including our Assemblymember, Gail Pellerin. The bill is scheduled for a Senate Judiciary Committee hearing on July 11. The bill would require major online platforms to pay news outlets a percentage of their advertising revenue, with the amount to be determined through arbitration. The money would go into a pool to be divided up and shared with news organizations big and small. Specifically, this bill has three key provisions. First, it would require the largest social media companies (primarily Google and Meta) to pay a “journalism usage fee” to a digital news provider if they display the provider’s content on their platform. The exact amount of the fee would be determined by an arbitration process spelled out in the bill. Second, because the author’s ultimate goal is to support quality journalism, the bill would require the provider to spend at least 70% of the amount received, according to the bill, on journalists employed by the provider and anything necessary to maintain or enhance the production of news on matters of public interest. Third, the bill prohibits a platform from retaliating against a news provider that asserts its right to the usage fee. Specifically, the platform cannot refuse to index the content or change the provider’s ranking or placement on the platform just because the provider requested the usage fee. The bill authorizes any news provider that faces such retaliation to bring a civil action against a covered platform. Critics argue that it conflicts with the First Amendment, creates conflicts of interest and could contribute to the spread of disinformation. Others point to a potentially corrupting influence posed by AB 886. By making Facebook and Google a guaranteed source of income, news publishers would have a vested interest in the platforms’ profitability and could prioritize promoting more “click bait” stories — driving greater web traffic and generating more revenue. Both Google and Meta — the parent company of Facebook and Instagram — have voluntarily entered into agreements with Australian news organizations. Google has formed commercial arrangements with virtually all qualifying media outlets, while Meta has completed deals with outlets employing some 85% of Australian journalists, according to Rod Sims, professor of public policy at Australian National University, Canberra. While AB 886 continues through the legislative process, there is little question that the newspaper industry in California has been devastated over the last couple of decades, beset by shrinking newsrooms and “news deserts” where there simply is no trustworthy local reporting. It’s not that people aren’t still reading or watching the news. A Pew research study found that 68% of Americans still rely on news websites. But platforms such as Facebook and Google “have coerced newsrooms to share the content they produce, which the platforms sell advertising against while providing little to no compensation in return,” Wicks said. It’s not clear exactly how much of a revenue boost California news organizations would be looking at under AB 886. If the bill passes and California Gov. Gavin Newsom signs it into law, the news industry would enter into “baseball-style arbitration” with Facebook and Google, presenting “final offers” to an arbitrator, who will select one. “We will shout out a number, and then we will present a bunch of methodologies that will support that number,” he said. “...I do think it would be a massive infusion.” The Chamber of Progress, a tech-funded center-left advocacy group, has argued that AB 886 would primarily benefit conservative media outlets such as Fox News and Newsmax. Facebook says that AB 886 represents a debate over a dwindling pool of revenue. “A lot has changed since Australia enacted its News Bargaining Code,” said Amber Moon, spokeswoman for parent company Meta. “Fewer people access news on Facebook, our user preferences have shifted to short-form video content, and our users say they want to see less news — not more — on the platform, ”According to data provided by Meta, the proportion of adults using Facebook for news fell by roughly a third between 2016 and 2022, from 45% to 30%. In the U.S., just 13% of adults use social media for news, while 22% of Americans think there is “too much” news on Facebook. Trendacosta, of the Electronic Frontier Foundation, said that AB 886 runs afoul of the First Amendment because it bars social media companies from taking down news content in retaliation for news producers demanding payment. The First Amendment bars the government from compelling speech. An Assembly floor analysis of AB 886 raised that argument but added that the retaliation provision “only prohibits a platform from denying access for the purpose of retaliation.” “The bill does not stop the platform from exercising its First Amendment ... rights to refuse to post certain views; it simply says that, if they do display the content, then they may be required to pay a usage fee and will not be able to remove someone solely because a fee was requested,” according to the analysis. An essential provision of the law is that publishers will be required to own up to that how the money is allocated. AB 886 includes language that forces executives to publicly divulge just how much they are getting from social media companies and what they are spending that money on. Would it be healthy for newspapers to enter into a business partnership with Facebook and Google, two global corporations of immense power and influence that are often the subjects of critical coverage? The newspaper industry, which has historically derived the majority of its revenue from advertisers, has often grappled with the ethical challenges of covering those companies in its news columns. Industries from tobacco to automobiles to alcohol to airlines have spent billions advertising with media outlets that must at times cover them critically. The lines are being drawn between the traditional newspaper industry and the Tech and California’s business sector. The Chamber has not engaged in this discussion but we are always concerned that a meddling legislative action can create unknown consequences that do more harm than good. Let’s keep an eye on this legislation.
According to the California News Publishers Association (CNPA), as consumers increasingly turn to digital sources for their news, local newspapers and news outlets have suffered. CNPA reports that California has lost more than 100 newspapers in the last decade. While there are many complex causes for this decline, the author points to large social media platforms like Google and Meta (formerly Facebook) which display news content on their platform but who do not share advertising revenue generated from that content.
The opponents of the bill dispute this characterization of the relationship between online platforms and news producers, and they point to other factors to explain the decline of local newspapers. To the supporters, this bill presents a question of basic fairness: if search engines and social media platforms generate billions of dollars by displaying news content, then they should share some of that revenue with those who produce the content. Opponents argue, among other things, that news producers not only consent to the display of content but that they want and actively seek display of their content on the platforms because it brings them more traffic. While both sides agree that digital journalism providers should be supported and compensated for their products, they disagree on the best mechanism for achieving this end.
State Assembly bill — AB 886 (Wicks) is working its way through the California state legislature where supporters say could dramatically alter the economics of California journalism had its beginnings more than 8,000 miles away.
For years, the Australian government and media watched newsrooms hemorrhage circulation, revenue and staff. At the same time, Facebook and Google linked to or displayed their work without paying anything for it. The response was The News Media Bargaining Code, which gives the Australian government the power to order digital platforms into arbitration with news organizations to negotiate fees for using their content.
If supporters of Assembly Bill 886, the California Journalism Preservation Act, prevail, Google and Meta will have to do the same in the Golden State — paying potentially hundreds of millions of dollars to news outlets. According to the bill analysis from the Assembly Committee on Judiciary ARGUMENTS IN SUPPORT: News Media Alliance [Alliance], one of the bill’s three sponsors, believes that “AB 886 remedies a digital advertising injustice whereby Big Tech aggregates local news to the enrichment of their sites without bearing any of the costs that publishers incur to employ local journalists and gather and report news vital to their communities. It’s time for big tech to pay market value for the content they siphon from local print, digital and broadcast news publishers.”
ARGUMENTS IN OPPOSITION: The Chamber of Progress (COP), a tech industry coalition, opposes AB 886 because it will “have the unintended consequence of eliminating the open access to information that our internet ecosystem currently provides.” In addition to this general concern, COP sets forth more specific concerns. First, it claims that this bill may violate federal copyright law by “charging platforms to link to news.” This “basic mechanism of the bill appears to create an ancillary copyright” that will expand “the rights of content owners beyond their traditional bounds in ways that may prove detrimental to the public interest.”
According to the bill’s author, Assemblymember Wicks, “A free and diverse press is the backbone of a healthy and vibrant democracy. When newsrooms are full, the public reaps rewards.” Unfortunately, the author writes, “California has lost more than 100 newspapers in the last decade,”and this is at least in part due to “the fact that huge technology platforms like Google and Meta have coerced newsrooms to share the content they produce, which the platforms sell advertising against while providing little to no compensation in return.” This bill, therefore, “directs big tech platforms to pay publishers a usage fee each time they use local news content. In turn, the bill requires news publishers to invest 70% of the fee back into journalism jobs.” Assemblymember Wicks insists, “this measure will provide “a lifeline for news outlets by directing some of the revenue from ad dollars back to the print, digital and broadcast media that bear the entire cost of gathering and reporting news while tech platforms bear none.”
AB 886 passed the Assembly with a 55-6 vote on June 1. Ironically 19 members of the Assembly did not vote on the legislation including our Assemblymember, Gail Pellerin. The bill is scheduled for a Senate Judiciary Committee hearing on July 11. The bill would require major online platforms to pay news outlets a percentage of their advertising revenue, with the amount to be determined through arbitration. The money would go into a pool to be divided up and shared with news organizations big and small.
Specifically, this bill has three key provisions. First, it would require the largest social media companies (primarily Google and Meta) to pay a “journalism usage fee” to a digital news provider if they display the provider’s content on their platform. The exact amount of the fee would be determined by an arbitration process spelled out in the bill.
Second, because the author’s ultimate goal is to support quality journalism, the bill would require the provider to spend at least 70% of the amount received, according to the bill, on journalists employed by the provider and anything necessary to maintain or enhance the production of news on matters of public interest.
Third, the bill prohibits a platform from retaliating against a news provider that asserts its right to the usage fee. Specifically, the platform cannot refuse to index the content or change the provider’s ranking or placement on the platform just because the provider requested the usage fee. The bill authorizes any news provider that faces such retaliation to bring a civil action against a covered platform.
Critics argue that it conflicts with the First Amendment, creates conflicts of interest and could contribute to the spread of disinformation. Others point to a potentially corrupting influence posed by AB 886. By making Facebook and Google a guaranteed source of income, news publishers would have a vested interest in the platforms’ profitability and could prioritize promoting more “click bait” stories — driving greater web traffic and generating more revenue.
Both Google and Meta — the parent company of Facebook and Instagram — have voluntarily entered into agreements with Australian news organizations. Google has formed commercial arrangements with virtually all qualifying media outlets, while Meta has completed deals with outlets employing some 85% of Australian journalists, according to Rod Sims, professor of public policy at Australian National University, Canberra.
While AB 886 continues through the legislative process, there is little question that the newspaper industry in California has been devastated over the last couple of decades, beset by shrinking newsrooms and “news deserts” where there simply is no trustworthy local reporting.
It’s not that people aren’t still reading or watching the news. A Pew research study found that 68% of Americans still rely on news websites.
But platforms such as Facebook and Google “have coerced newsrooms to share the content they produce, which the platforms sell advertising against while providing little to no compensation in return,” Wicks said.
It’s not clear exactly how much of a revenue boost California news organizations would be looking at under AB 886. If the bill passes and California Gov. Gavin Newsom signs it into law, the news industry would enter into “baseball-style arbitration” with Facebook and Google, presenting “final offers” to an arbitrator, who will select one.
“We will shout out a number, and then we will present a bunch of methodologies that will support that number,” he said. “...I do think it would be a massive infusion.”
The Chamber of Progress, a tech-funded center-left advocacy group, has argued that AB 886 would primarily benefit conservative media outlets such as Fox News and Newsmax.
Facebook says that AB 886 represents a debate over a dwindling pool of revenue.
“A lot has changed since Australia enacted its News Bargaining Code,” said Amber Moon, spokeswoman for parent company Meta. “Fewer people access news on Facebook, our user preferences have shifted to short-form video content, and our users say they want to see less news — not more — on the platform, ”According to data provided by Meta, the proportion of adults using Facebook for news fell by roughly a third between 2016 and 2022, from 45% to 30%. In the U.S., just 13% of adults use social media for news, while 22% of Americans think there is “too much” news on Facebook.
Trendacosta, of the Electronic Frontier Foundation, said that AB 886 runs afoul of the First Amendment because it bars social media companies from taking down news content in retaliation for news producers demanding payment. The First Amendment bars the government from compelling speech.
An Assembly floor analysis of AB 886 raised that argument but added that the retaliation provision “only prohibits a platform from denying access for the purpose of retaliation.” “The bill does not stop the platform from exercising its First Amendment ... rights to refuse to post certain views; it simply says that, if they do display the content, then they may be required to pay a usage fee and will not be able to remove someone solely because a fee was requested,” according to the analysis.
An essential provision of the law is that publishers will be required to own up to that how the money is allocated. AB 886 includes language that forces executives to publicly divulge just how much they are getting from social media companies and what they are spending that money on.
Would it be healthy for newspapers to enter into a business partnership with Facebook and Google, two global corporations of immense power and influence that are often the subjects of critical coverage?
The newspaper industry, which has historically derived the majority of its revenue from advertisers, has often grappled with the ethical challenges of covering those companies in its news columns. Industries from tobacco to automobiles to alcohol to airlines have spent billions advertising with media outlets that must at times cover them critically.
The lines are being drawn between the traditional newspaper industry and the Tech and California’s business sector. The Chamber has not engaged in this discussion but we are always concerned that a meddling legislative action can create unknown consequences that do more harm than good. Let’s keep an eye on this legislation.