Bloomberg Law
May 17, 2023, 9:00 AM

Google, Facebook to Pay Journalism Fee Under California Bill

Titus Wu
Titus Wu

California lawmakers are trying to advance legislation that would require digital platforms like Google and Facebook to pay a share of advertising revenue to media outlets after similar federal efforts have stalled.

The state legislation (A.B. 886) mirrors a federal measure in its attempt to help financially rescue local journalism companies and organizations. Newspapers rely heavily on social media and search engines to drive digital traffic as traditional print advertising revenues have disappeared. Meanwhile, titans like Google and Meta Platforms Inc. have controlled up to more than half of the online advertising market in recent years.

“These dominant digital ad companies are enriching their own platforms with local news content without adequately compensating the originators,” said Assemblymember Buffy Wicks (D) when announcing her bill in March. “It’s time they start paying market value for the journalism they are aggregating at no cost from local media.”

Big Tech, however, is characterizing the payments as a “link tax” that would disrupt the free and open nature of the internet.

The legislation faces strong opposition from a coalition of tech firms and even some journalism organizations, which contend the bill would actually harm local media and raises First Amendment issues. Backers of the measure also are wrestling with the logistics of imposing a proposed fee for original content as the bill awaits an Assembly floor vote.

Help or Hurt the Cause?

Media groups in support of the bill say such payments would be an important financial lifeline for them to help them cover local issues from city council meetings to breaking news. Over 100 California newspapers have shuttered in the last decade as big tech companies have become the gatekeepers of how readers access news, said Emily Charrier, chairperson for the California News Publishers Association. She also serves as editor and publisher of the Sonoma Index-Tribune and publisher of the Petaluma Argus-Courier.

Meta, the parent company of Facebook, has threatened to pull news content in response to similar efforts in Congress, Canada, and Australia.

“Social media and search engines are already providing huge amount of value in traffic to news sites, right? And they provide that value basically for free,” said Adam Kovacevich, CEO of Chamber of Progress, a tech industry coalition that includes Meta and Google. “The fact is they don’t derive much value themselves from these links. And if they’re forced to pay for every link to a news site, then that’s the precedent that they really want to avoid.”

Some journalism advocates argue that if the tech companies comply and don’t block news content in response to the legislation, sites that peddle disinformation and clickbait stories will also be rewarded along with local newspapers. News publishers would be incentivized to republish content that generate the most clicks to get the most revenue, said Chris Krewson, executive director of Local Independent Online News Publishers, which represents local news entrepreneurs.

The Wicks proposal also would favor national media chains such as Digital First Media that have hollowed out local newspapers over locally owned outlets, Krewson and others told lawmakers in public comment. Those chains not only have larger reach but would also dominate negotiations with tech platforms.

A big point of contention is over language that would prohibit retaliation against a media outlet for trying to collect money from a platform. Critics say this provision would force tech companies to publish all types of content—even ones deemed unsuitable for their platform—and it would violate their First Amendment rights and other federal law. Supporters disagree, arguing that blocking content for objectionable material isn’t the same as retaliation.

How Would The Fee Work?

The bill initially would place a fixed percentage of a platform’s advertising revenue that would go toward news providers with a formula based on how much content was linked to or displayed. Wicks replaced that language with an arbitration process, where a panel of three arbitrators would decide on a final percentage after reviewing each sides’ arguments over a fair market value for the content.

At least 70% of the money a news organization gets would have to go toward employed journalists and news operations under the bill, though Wicks has promised additional language to ensure journalists and not corporate owners receive the funds.

Specific details about the arbitration process still remain in flux, such as whether it would be practical for a platform to hold separate negotiations for every single news provider as opposed to an arbitration process representing multiple news organizations. Lawmakers at an April 29 committee hearing questioned if there should be an appeals process added.

Assemblymembers also wanted the bill to spell out a distinction between how search engines and social media interacts with news content links, which Wicks promised to address. For instance, Google aggregates news links on its own, but news publishers and readers are the ones voluntarily posting news content on Facebook. Critics contend a local newspaper could start posting more content on its social media channels to drive up their payments.

In short, the bill’s language is far from settled and will likely encounter many revisions before an Assembly floor vote. Wicks said she’s willing to address any issue to make sure local journalism outlets can benefit from her legislation.

“I’m not interested in lining the pockets of the hedge fund managers who manage some of these publications. I’m not interested in Mark Zuckerberg versus you know, name your corporate CEO of publishers,” she said. “I want more money in the pockets of journalists so that they can have long and illustrious careers holding us accountable.”

To contact the reporter on this story: Titus Wu in Sacramento, Calif. at

To contact the editors responsible for this story: Bill Swindell at; Andrew Childers at

Learn more about Bloomberg Law or Log In to keep reading:

Learn About Bloomberg Law

AI-powered legal analytics, workflow tools and premium legal & business news.

Already a subscriber?

Log in to keep reading or access research tools.