Meta Threatens News Ban in California Over Bill Requiring It to Share Advertising Revenue

Facebook parent Meta Platforms is threatening to ban California users from sharing news on its website if the state passes a bill that would require online platforms to pay fees to news publishers.

The California assembly is scheduled to vote on the bill, called the California Journalism Preservation Act, on Thursday. If lawmakers approve the measure, it will go to the state Senate for another vote. The chambers have until September 14 to pass bills this year before the legislative session ends.

“If the Journalism Preservation Act passes, we will be forced to remove news from Facebook and Instagram, instead of paying into a slush fund that primarily benefits large out-of-state media companies under the guise of helping to California Publishers”, Meta saying Wednesday in a statement tweeted by spokesman Andy Stone.

The proposed bill is one of several legislative pushes in the US to effectively redirect some of the billions of dollars that big tech companies generate each year from advertising in news content to newsrooms. local newsrooms and other struggling media outlets. The law would require Meta to pay usage fees to eligible media companies based on a percentage of the ad revenue their platforms generate. For their part, publishers who receive usage fees would be required to use at least 70% of that money to pay their staff.

California Assemblywoman Buffy Wicks, who sponsored the Journalism Preservation Act, said the legislation would help maintain local news operations, noting that more than 100 media players in the state have retired in the past 10 years.

“As news consumption has moved online, community media outlets have shrunk and [are] closing at an alarming rate,” Wicks said at a hearing in early May, according to the California Globe, an independent local news outlet.

Meta rejects claims that platforms like Facebook and Instagram have hurt the news business. In its statement on Wednesday, the company argued that the local news industry was losing steam long before Facebook became a popular news-sharing forum.

“The bill fails to recognize that publishers and broadcasters put their content on our platform themselves and that substantial consolidation in the California local news industry occurred 15 years ago, long before Facebook was widely used.” Meta said.

Meta did not immediately respond to CBS MoneyWatch’s request for comment.

Calls to tax big tech

Efforts to charge online news exchange platforms have intensified in recent years. The Journalism Preservation and Competition Act, a federal bill currently being considered by Congress, would allow US publishers to join forces to demand payment from big tech platforms.

Meta is also facing pressure outside the US. In 2018, Britain’s Labor Party proposed imposing a tax on big tech companies to support the diversity and competitiveness of the country’s public journalism, Reuters reported.

Meta rejected a similar push to force tech companies to pay media publishers in 2021, ban australian users to post news-related content on their platforms for several days.