California Bill Supporting Journalists Passes Amid Facebook ‘Bullying Threat’

A bill that would impose a fee on tech platforms like Facebook for scraping and disseminating news stories passed in the California state assembly on June 1 2023 — despite an industry threat.

Assembly Bill 886 (AB 886), a.k.a. the California Journalism Preservation Act, would charge platforms what is described a “usage fee” for making news content available, with the money raised to be spread to eligible news outlets via arbitration, on the condition that “no less than 70 percent” of the funds be used to pay their workers. The News Guild of the West, a journalism labor group, confirmed that the bill passed on a 46-6 vote and will go to the state Senate next.

The bill passed despite a threat from Meta, Facebook’s parent company, to ban news content from appearing on that platform and Instagram.

“We will be forced to remove news from Facebook and Instagram, rather than pay into a slush fund that primarily benefits big, out-of-state media companies under the guise of aiding California publishers,” spokesperson Andy Stone claimed on Twitter a day before the bill passed.

NPR reported:

When asked how exactly the act would force Meta to stop distributing news articles, Stone said: “It’s pay or remove the news. Our hand is being forced.”

Stone’s comment was condemned by journalism labor groups who have come out in support of the bill, which was introduced by Democratic state assembly member Buffy Wicks of Oakland.

“Censorship is un-American and Meta’s threat poses major ramifications for our democracy,” NewsGuild-CWA President Jon Schleuss said in a statement released alongside the Media Guild. “Our democracy depends on journalism, especially at the local level. Meta needs to decide whether it cares about the health of the United States or not.”

Media Guild of the West President Matt Pearce said that the bill did not deserve to be threatened.

“This is a corporate bullying tactic timed to intimidate California lawmakers the day before they take up this bill on the Assembly floor,” Pearce said prior to the vote.

Supporters of the bill point to it as a corrective measure against labor losses fueled in part by an advertiser exodus to the tech sector; NPR reported that thus far in 2023, “services owned by Meta or Google have collected nearly 70 percent of digital advertising revenue.”

The Pew Research Center reported as recently as 2021 that newsroom employment had decreased by 26 percent since 2008, with newspapers suffering most of those losses:

Since 2008, newsroom employment has plummeted at U.S. newspapers while increasing in the digital publishing sector. Newspaper newsroom employment fell 57 percent between 2008 and 2020, from roughly 71,000 jobs to about 31,000. At the same time, the number of digital-native newsroom employees rose 144 percent, from 7,400 workers in 2008 to about 18,000 in 2020. Despite this sharp increase, the number of newsroom employees in the digital-native sector remained about 13,000 below the number in the newspaper sector in 2020.

In February 2021, Australia implemented the News Media Bargaining Code, a precursor to Wicks’ bill — which in turn prompted Meta to restrict users there from seeing news content on Facebook.

However, that service was restored after negotiations with that country’s government. Just over a year later, the Columbia Journalism Review reported that news organizations raised $200 million Australian dollars (equivalent to $150 million U.S. dollars) from usage fees.

Danielle Coffey, president of the News Media Alliance trade group, said in a statement that the Australian message symbolizes a “turning point” in addressing tech platforms’ relationship with journalism.

“There can be no democracy without a free and robust press: someone to ask the hard questions, monitor government activity and shed light on the truth. But currently, that press is at the mercy of Big Tech’s stranglehold, which is anything but democratic,” said Coffey, whose group represents an estimated 2000 newspapers around the U.S. and Canada. “It’s time to allow the free market to ensure that news, like any other commodity, is given a fair value.”

Both Google and Meta have retaliated against a similar bill enacted in Canada in June 2023, the Online News Act. As CTV News reported on June 29 2023, both companies have announced that they will restrict access to news articles for Canadian users; Meta has also stopped funding a fellowship program that helped around 30 reporters land positions with the Canadian Press news agency.

“This really hurts, in way[s] that’s not going to be as visible to the public as removing online links to news stories,” Toronto Metropolitan University associate professor Janice Neil told the local Star. “But I think it’s a real sucker-punch for the industry.”

In response, both the Canadian government and several of the country’s media companies have moved to stop advertising on Meta’s platforms.

“We vigorously object to Meta’s unprecedented plans to block our content on its platforms in protest against the federal government’s Online News Act,” said Neil Oliver, chief executive officer of the TorStar Corporation, which owns the Star as well as other newspapers within the country.

Update 6/29/2023, 3:31 p.m. PST: Updated to reflect decisions by Meta and Google to restrict news access for Canadian users after the passage of the Online News Act in that country. — ag
Update 7/12/2023, 1:16 p.m. PST: Updated with note on Canadian media companies as well as the Canadian government discontinuing advertising on Meta platforms. — ag