Meta, Facebook’s parent company, has announced that it will remove news content from its home state of California if the state government enforces a law requiring technology companies to compensate publishers.
The California Journalism Preservation Act, if approved, would make it mandatory for online platforms to compensate news providers to support the struggling local news industry.
Meta Lashes Out At New Proposed Bill
In a shocking turn of events, Meta has ignited a fierce debate by threatening to remove news content from California if it is required to compensate publishers.
The company’s hardball tactics have raised concerns about the power it wields over the distribution and monetization of news, sparking a contentious battle between Facebook and publishers.
Meta has long been accused of profiting from news content without adequately compensating the publishers who create it.
This contentious issue has gained momentum in recent years, leading to calls for legislative action to ensure a fair and equitable relationship between tech platforms and news organizations.
In response to these mounting pressures, a proposed bill called the California Journalism Competition and Preservation Act was introduced.
This bill would require social media platforms like Facebook and Instagram and search engines like Google to negotiate with news publishers and fairly compensate them for their content.
News publishers would be obligated to allocate 70% of the funds received from tech companies toward journalists’ salaries and news production.
However, California-based Meta vehemently opposes the legislation and contends that politicians are misinformed about the link between social networks and publishers.
In a statement shared on Twitter, Meta spokesperson Andy Stone criticized the payment structure as a “slush fund.”
She claimed that the bill would primarily benefit “big, out-of-state media companies” while pretending to support California publishers.
Meta statement on the California Journalism Preservation Act. pic.twitter.com/ssgk1vSryB
— Andy Stone (@andymstone) May 31, 2023
Meta disagrees with the idea that social networking companies are solely responsible for the significant decrease in news outlets, particularly local ones, over the past two decades.
Oakland Democratic Assemblymember Buffy Wicks Calls Meta’s Bluff
The California Journalism Preservation Act (CJPA) was proposed by Buffy Wicks, a Democratic Assemblymember from Oakland, and is backed by the Californian News Publishers’ Association.
The bill seeks to compel tech companies to pay “journalism usage fees” when they display advertisements alongside local news articles on social networks or search engines.
In an interview with the Mercury News, Wicks noted that California had witnessed the loss of over 100 newspapers in the past decade alone.
She emphasized that the Constitution’s founders recognized and valued the significance of a free press.
Furthermore, she expressed concern about the closure of newspapers due to an uneven playing field within the ecosystem and viewed this as a democratic issue.
As a result, Wicks has expressed strong opposition to the threat presented by Meta, which she views as a tactic to intimidate.
She pointed out that Meta has used this tactic in other countries where similar regulations were attempted without success.
Wicks found it troubling that a company as wealthy as Meta would prefer to silence journalists rather than compensate them appropriately.
This threat from Meta is a scare tactic that they’ve tried to deploy, unsuccessfully, in every country that’s attempted this. It is egregious that one of the wealthiest companies in the world would rather silence journalists than face regulation. @mattdpearce lays it out below.👇🏻 https://t.co/oW07CQllpC
— Buffy Wicks (@BuffyWicks) May 31, 2023
The California proposal is similar to a federal bill that aims to allow local news outlets to collectively negotiate with tech platforms.
However, Senator Ted Cruz from Texas ultimately thwarted this bipartisan endeavor in September 2022, despite its significant support.
Currently, the federal bill remains uncertain and undecided.
Big Techs Fight Back Against Similar Bills Abroad
Meta and Google have demonstrated a readiness to fight tooth and nail in opposition to legislation that would try to make them pay for news.
They argue that the proposed laws misrepresent their partnership with news publishers and ultimately amount to a link tax.
Recently, Google conducted tests in Canada that briefly limited news results to only 4% of randomly selected users.
Google is conducting tests that block some Canadians’ news content in response… https://t.co/iQZyvU1Kck
— Top SEO Expertz (@Topseoexpertz) February 26, 2023
Although the company insisted that these were just a few of the many routine tests they perform, supporters of the Canadian bill perceived these actions as a threat.
Back in 2021, Meta made good on its vows to sever Australia’s access to news through its platform.
A rough estimate of 17 million users had their access to its social networks temporarily knocked down, leaving critical services like hospitals and fire departments caught in the crossfire.
However, Meta eventually brought news back to the site, but only after lawmakers approved a scaled-down version of the measure.
This version permits Facebook and Google to come to agreements with publishers before being required to enter arbitration.
Meta is currently engaged in a similar digital policy hardball game with Canadian legislators about its planned Online News Act.
Rather than resorting to threats and ultimatums, stakeholders in the news and tech industries should strive for collaboration and compromise.
All parties can reach a fair and sustainable solution by engaging in meaningful negotiations.
It’s important for platforms such as Meta to acknowledge the significance of high-quality journalism and its vital role in society.
In the same way, publishers need to adjust to the evolving media environment and consider innovative revenue models beyond conventional advertising.
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