California lawmakers revive debate on requiring Big Tech to pay for news

SACRAMENTO —  California lawmakers have revived legislation to charge online platforms for the news articles they publish, a proposal that stalled last year amid divisions within the journalism industry and intense opposition from Google and other tech companies.

New amendments published Monday to Assembly Bill 886 are meant to address concerns from small publishers and make the plan more similar to the way Canada charges platforms for distributing news content.

The bill, also known as the “California Journalism Preservation Act,” would require digital advertising giants to pay news outlets a fee when they sell advertising alongside news content. Publishers would have to use 70% of those funds to pay journalists in California.

The changes call for calculating payments based on the number of journalists a news outlet employs, similar to Canada’s model, rather than on how many impressions an article generates, as originally proposed. And they call for creating a fund that platforms pay into, which would distribute the money to news outlets. Google is paying $74 million annually into a fund for the news industry under the law that took effect last year in Canada.

“What we learned with the Canada version is that it’s possible, and that news is of value, it’s critical,” said Assemblymember Buffy Wicks (D-Oakland). “And that we should be doing everything we can to ensure that our publishers are compensated for the work that they’re providing.”

New amendments in Wicks’ bill also would give an additional boost to small publishers by making them eligible for funding beyond the per-journalist payout and allowing them more flexibility in how they spend the money they would receive under the program by dropping the portion they must spend paying journalists to 50%.

The bill is sponsored by the California News Publishers Assn., of which the Los Angeles Times is a member. Publishers argue that online search and social media platforms are harming the journalism business by gobbling up advertising revenue while publishing content they don’t pay for.

The changes to the bill mark a key development since the bill was put on pause last year in the face of massive opposition from Google and other companies. Google argued the legislation would upend its business model and wrote in an April blog post that the bill “undermines news in California.” The search giant flexed its muscle against the bill earlier this year by removing links to California news sites from its search results for some users.

Google did not respond to an email seeking comment on the latest changes to the bill.

But the amendments are unlikely to be the final modifications. Lawmakers often ramp up negotiations on difficult issues as they approach the end of the legislative session in August. The bill is scheduled for a hearing on June 25 in the Senate Judiciary Committee, its next big hurdle.

State Sen. Tom Umberg (D-Orange), who chairs that committee, said he expects further changes as negotiations continue. He said he would like to see the bill pass but wants to make sure it strikes the right balance between what the news industry needs and what the tech platforms can pay for.

“I believe that we could screw this up so that we make it so expensive that the platforms don’t carry [journalism] content,” Umberg said. “That would be catastrophic. So I don’t know where we hit that sweet spot.”

A separate bill seeking to aid the journalism industry would impose a new tax on Amazon, Meta and Google for the data they take from users and pump the money from this “data extraction mitigation fee” into news organizations by giving them a tax credit for employing full-time journalists.

As a tax measure, Senate Bill 1327 would require approval from two-thirds of the Legislature and presents a political challenge in an election year. Nonetheless, state Sen. Steve Glazer (D-Orinda) said his bill is compatible with Wicks’ legislation, and he remains hopeful lawmakers can find a way to help the journalism industry.

“I continue to have many conversations with her and others about how we have to solve the problem,” Glazer said. “There’s lots of ways to try to go at it.”