Meta Threatens News Ban in California Over Ad Revenue Sharing Bill

Meta Platforms, the parent company of Facebook, has threatened to bar users in California from sharing news on its website if the state passes legislation requiring internet platforms to pay fees to news publishers.

The California Assembly is set to vote on the California Journalism Preservation Act on Thursday. If lawmakers approve the bill, it will be sent to the state senate for another vote. The chambers have until September 14 to pass bills before this year’s legislative session ends.

“If the Journalism Preservation Act passes, 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 while ostensibly assisting California publishers,” Meta said in a statement tweeted by a spokesperson Andy Stone on Wednesday.

The proposed law is one of several legislative initiatives nationwide aimed at successfully redirecting some of the billions of money generated yearly by giant digital corporations from advertising on news content to struggling local newsrooms and other media publishers.

The bill would require Meta to pay eligible media companies’ use fees based on a portion of ad income generated by its platforms. Publishers who get use fees must utilize at least 70% of that money to compensate their employees.

California Assemblymember Buffy Wicks, who introduced the Journalism Preservation Act, claimed the law would support local news operations, noting that more than 100 media companies in the state had gone out of business in the previous ten years.

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

Meta Threatens News Ban in California Over Ad Revenue Sharing Bill

Meta denies that platforms like Facebook and Instagram have harmed the journalistic industry. The company said in a statement issued on Wednesday that the local news industry was losing momentum long before Facebook became a prominent place for sharing news.

“The bill fails to recognize that publishers and broadcasters self-publish their content on our platform and that significant consolidation in California’s local news industry occurred over 15 years ago, well before Facebook was widely used,” Meta added.

Meta did not reply promptly to CBS MoneyWatch’s request for comment.

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Calls To Tax Big Tech

In recent years, efforts to tax online news-sharing sites have increased. The Journalism Competition and Preservation Act, a federal bill debated in Congress, would allow US publishers to band together to demand payments from large tech platforms.

Meta is also under attack outside of the United States. According to Reuters, Britain’s Labour Party proposed a tax on substantial digital companies in 2018 to promote the variety and competitiveness of the country’s public journalism.

Meta responded to a similar campaign in 2021 to require digital companies to pay media publishers by prohibiting Australian users from sharing news-related content on its platforms for many days.

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